'Vultures' make millions on text message scams, fraud experts say

The story this week of a19-year-old Montreal student who wasbilked out of $4,000 by scammersis just the tip of the iceberg, fraud experts say.

In the end,Louanne Cataford was lucky. Following inquiries fromCBC Montreal's investigative team, her credit union eventually agreed to reimburse her most of that amount.

• How a text message scam put a Montreal student on the hook for $4K

Not everyone is asfortunate.

The Canadian Anti-Fraud Centre has heard this year from 200 victimswho have fallen for scams likethe oneCatafordendured,for a combined loss ofmore than $2.2 million.

There are likely many more.The centre estimates fewer than one in 20victims reports such crimes, so the total amount Canadians have lost to scammersis likely much higher.

"There's a lot of folks out there looking for work," said Daniel Williams, one of the centre's senior fraud specialists.

"You have vultures like this willing to take advantage of them."

How the scam works

In scams similar to the one Cataford fell prey to, the offer typically comes in the form of an unsolicited text message or email, offering a job that will net a few hundred dollars a week.

Once peoplesignon, theyreceivea counterfeit cheque for much more than the expected amount.

No stranger is going to send you more money than they owe you.If somebody owes you $300, you'd be lucky to actually get that.- Daniel Williams, senior specialist at the Canadian Anti-Fraud Centre

They are asked to deposit it, keep a small portion, then forward the rest of the money onto a third party.

That's a mistake, Williams said.

"No stranger is going to send you more money than they owe you," he said. "If somebody owes you $300, you'd be lucky to actually get that."

Most consumers don't realize that when their financial institution clears a cheque, it doesn't mean the cheque is legitimate.

"They think the minute they gain access to funds, it means the cheque has been verified six ways to Sunday," said Williams. "Nothing could be further from the truth."

Depending on how good the counterfeit is, it can take weeks for a financial institution to detect the fraud. By then, the scammers are long gone with the money, and thevictim is on the hook for the amount on the cheque.

Multiple victims

With schemes like this, there's usually someone else being scammed simultaneously.

• YOUR STORIES:Victims of text message scam plead for more protection from their banks

The person who has accepted the fraudulent cheque is asked to deposit an amount, in cash, into another account.

Williams says the owner of that account is usually the unwitting victim of a different fraud, which gave the scammer access to the account holder's banking information.

Criminals sometimes trick people into giving them access to their computers, he said. And before the person knows it, their bank accounts are being used as a conduit for other people's money.

Keep books up to date

Businesses also need to ensure they are keeping their books up to date.

Counterfeit cheques are often made by copying a legitimate firm's cheques, with scammers altering the amount or the payee. The authorized signatures on the cheque may also be wrong.

As soon as a company notices a discrepancy, it should contact its bank.

Royal Customs Brokers, a company in Fort Erie, Ont., had about $80,000 in cheques go through itsaccount before it discovered they were counterfeit.

The customs brokerage's owner, Brian Martin, has no idea how the scammers got their hands on his firm's banking information.

Martin's firm was reimbursed because it caught the fraud quickly, but Martin says if it had happened to another company, the results could be disastrous.

"Some smaller businesses would only reconcile [their bank statements] at year-end," he said. "So they could be in trouble a long time before they found out."

Fishy text? Don't respond

If you have received a text message or email from someone you don't know with a job offer, don't respond.

Williams urges people who believe they've received a fraudulent message to report it to the Canadian Anti-Fraud Centre or to police.

• Tech-savvymillennialsgettingscammedmore than seniors

He says the scammers use an endless supply of email addresses and cellphones to reel in victims, making them difficult to track.

The scammers are also quick to adapt, able to accept any method of payment.

"If they want it by Western Union, and for whatever reason you're not comfortable, they'll give you a bank account to send the money to," said Williams. "If you won't send it to a bank account, they'll accept pre-paid gift cards."

Although Canadian area codes and cheques counterfeited from the accounts of legitimate Canadian companies are used, Williams says the scammers are usually located thousands of kilometres beyond Canada's borders another strategy to make their activities difficult to trace.

CBC contacted by dozens of near-victims

Since CBC Montreal Investigatespublished its first online story about Cataford's experience, we have been inundated withdozens of phone calls and emails from people across Canada who have received similar "job offers."

Several messages were from people on the verge of depositing a suspected scammer's cheque until they saw our story.

• YOUR STORIES:Victims of text message scam plead for more protection from their banks

Other ways to determine if you're being scammed include:

• Do a quick online search for the job offer phone number on the text or theemail address you receive. Usually, if it's a scam, there are already otherpeople warning other consumers about it online.
• Check the website of the company that supposedly issued the cheque.Sometimes the company has already issued a warning.
• Call the company directly to ask about the cheque. "They are usually in avery good position to let you know, 'No, we've done no business with you, weowe you no money, why on Earth would we have sent you a cheque for $3,000?'"said Williams.

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