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Current Scams
Scam artists all have one thing in common. They aim to take someone else's money without earning it. Ontario's Ministry of Consumer and Business Services has prepared information on common scams so you can recognize and avoid them.
Loan brokers offer to arrange loans in return for a profit. It's against the law for a loan broker to charge an up-front fee in Ontario. Often, dishonest loan brokers charge money up front for loans that never come through.
"Ministry of Consumer and Business Services investigators and lawyers have been busy prosecuting dishonest loan brokers, and have laid more than 1,500 charges against them," says the ministry's director of Marketplace Standards and Services Branch, Rob Dowler. "But the best way to put scam artists out of business is for consumers not to fall for their tricks in the first place."
How does the scam work?
An ad runs in the local newspaper, offering to arrange loans "even if your credit rating is bad." Often people who have financial problems, and may not qualify for a loan from their local bank, credit union or trust company, are so desperate they call the telephone number listed. They're told they qualify for a loan. Then comes the hitch. They may be told they're paying a deposit, administration fee, insurance premium or service charge, but whatever it's called the loan broker wants money in advance.
Some examples of cases recently prosecuted or investigated by the Ministry of Consumer and Business Services:
- Apex Services and Suncorp Financial duped consumers into paying upfront for loans. They said the money was for "insurance premiums." Applicants never received the loans. Apex Services and Suncorp Financial's chief entered a plea of guilty for fraudulently collecting more than $300,000 from consumers. The ministry worked with two US State governments and Toronto Police Services (Fraud) to investigate the case. On March 16 an Ontario court judge ordered the owner of these companies to pay compensation of $268,193.89 US to consumers in the United States and sentenced him to eight months in jail plus 18 months of probation.
- Century Financial's two operators advertised in the "money to loan" sections of local newspapers. When consumers answered the ads they were told they qualified for loans but had to pay a fee to get the money. The money never came. One of them was sentenced with a six-month jail penalty, the other fined $2,200, on April 4, under the Loan Brokers Act.
- Comfort Financial Services Inc, whose director also carried on business as All Star Financial, took up-front fees and offered loans that never came through in Ontario. The director was sentenced, in January, to 90 days incarceration followed by two years' probation for offenses under Ontario's Loan Brokers Act.
Banking scams based on mail campaigns are reported often by police across the province.
Scam artists from other countries, frequently Nigeria, write to companies and individual consumers saying they want banking information so they can transfer funds into victims' accounts. The scam artists claim they need to move a large sum of money out of their country. They hope their victims will be so impressed by the amount of profit the scam artists promise they'll fail to see the danger in handing over financial information.
Anyone who receives a letter or telephone call from an unauthorized source asking for personal or financial information should report it to local police, and to Project Phonebusters at the telephone number listed below.
Phoney bank inspectors ask consumers, frequently seniors, to take money out of their accounts and turn it over to them "to help catch a criminal" who they often say is an employee of the bank. Banks NEVER ask a consumer to take money out of the bank to help prevent a crime or catch a criminal. If someone asks for your money to stop a crime, call local police right away.
Free trips usually aren't really free. Many consumers tell the ministry they have received calls from telemarketers saying they've won a free vacation. This may occur a few weeks after the consumer has filled out a contest coupon at a spring home or garden show, or the call may be unsolicited.
If you've really won a free trip you should not be asked for money in advance. You may be told that you must pay for insurance on your holiday, or travel documents, or just a small portion of your accommodation costs.
Most people who agree to "free offer" vacations later say they've regretted their decision. The trip won't be available when you are, won't come any where near the promised standard or in the worst case may be a ploy to convince you to send money to a dishonest promoter who sends nothing in return.
To report a scam, or for information on a variety of consumer issues, call the ministry's Consumer Services Bureau at 416-326-8800 in the Toronto area or at toll free 1-800-889-9768 from other parts of the province. Special electronic equipment for use by the hearing and speech impaired is available at 416-325-3408 or Toll free 1-800-268-7095.
If you think you've been a target of telemarketing or mail fraud call Project Phonebusters, at 1-888-495-8501.
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