Online scams targeted by Fraud Prevention Month campaign

By: Lori Thompson, Local Journalism Initiative Reporter, The Manitoulin Expositor

Canadians have been turning to online services and digital marketplaces in increasing numbers, but Canada’s Competition Bureau, in partnership with the RCMP and the Canadian Anti-Fraud Centre (CAFC), want consumers and businesses to beware of online scams and deceptive marketing, pooling their collective resources and knowledge on the different types of frauds. The RCMP and CAFC are focusing on frauds of a more criminal nature, such as romance, CRA and COVID-19 scams during this year’s Fraud Prevention Month campaign. The Competition Bureau is focusing on digital economy scams, online shopping and scams targeting businesses.

“As far as the online shopping we’re focusing on non-delivery of products and fake customer reviews,” said Thomas Steen, major case director with the Competition Bureau. “On the business side, we’re focusing on the CEO, spear phishing, business email compromise or virus protection scams. Phishing scams are when scammers try to gain an individual’s or company’s bank account information by posing as a bank and intellectual property scams involve notices that look like they’re coming from the patent office, Canada’s intellectual property office, for renewal of patent fees.”

There has been more online fraud for things like non-delivery and subscription traps, he said. “Subscription traps target consumers with free trial offers or consumers pay a small amount to try a product but are then hooked into quite expensive subscription plans. Many times consumers don’t realize these charges for quite some time so it may be several months where they’re charged for the product when they thought they were just paying a few dollars to try it.” Instead they are charged 80 to 100 dollars a month or more. Sometimes the scammers throw in other products, referred to as upsells, that consumers unknowingly signed up for. These are marketed under a different name so it can be quite confusing for people to track everything down, he said. “They can lose hundreds or thousands of dollars in these scams.”

Trial offers are not illegal but some offers are not legitimate. The key, he said, is for consumers to look for the fine print and read that fine print very carefully. “When you read those in a typical subscription trap or trial scam, you’ll see that you only pay $4.95 for shipping but only have a 14-day trial period that starts not from the day you receive the product but from the day you ordered it.”

The cancellation process is not straightforward either and may be difficult to find on the website. “If they are legitimate it’s going to be upfront with no surprises,” he explained. “Under the Competition Act the terms and conditions shouldn’t contradict the general impression of the whole advertisement. If the general impression is that you can pay $4.95 to try something with no obligations and no worries, there shouldn’t be a bunch of worries stuck in the terms and conditions.”

Unless you can tell law enforcement or credit card companies exactly where and when you clicked on the ad, it’s nearly impossible to find the exact link you clicked on the make the purchase, said Mr. Steen. “There’s often a different version of terms and conditions created for the credit card company and the banks to see, where the disclosure’s a bit better of the payment terms. If you just did a simple Google search and typed in the url, the website would look exactly the same except the payment page will be a bit different. The credit card companies are trying to do the right thing and they have done quite a bit to try to stop this scam but scammers always find a way to keep going.”

False reviews can be a real problem also, he said. With so many products in the digital marketplace now, online reviews are an easy and convenient way to learn about products and other people’s experience so you can evaluate whether it’s a good choice for you. The problem is that it’s also an opportunity for dishonest retailers or merchants to write fake reviews.

“Don’t just rely on one source,” he said. “Do some independent research on the company. Look to see if there are negative reviews on Better Business Bureau or other sites. Google the name of the company with scams or complaints and see what might come up. When something comes up, read through those carefully. When you read the reviews themselves don’t just focus on five star reviews or the most recent. Go back in history and try to look at them over time. You might see some clues there. If the company had negative or average reviews and then all of a sudden they have five star reviews and especially if the reviews are written in similar language, kind of over the top language. Those are some tips, some flags that they might be fake. It’s unfortunate because online reviews can be very handy to look at but you have to be careful.”

Fake reviews can be positive or negative and don’t just hurt consumers, they also hurt businesses that are working hard trying to serve their customers as best as they can when all of a sudden their competitors start getting all five star reviews and theirs are only four-and-a-half. “Fake reviews really damage consumer choice and competition,” he said. “Online reviews are also posted on social media sites.” A red flag is noticing somebody posting that’s relatively new to the site but is promoting all the products with really strong reviews. “It seems kind of strange that this person in such a short period of time has tried this many products. When you read the reviews they all have the same kind of over the top flowery language, there will be a pattern. That’s something to watch too because that does happen. There’s people out there who are also getting compensated for making positive fake reviews about companies.”

The CAFC and the RCMP talk about the CRA scam more but if you owe money on your taxes then it wouldn’t be a surprise that CRA has been investigating you, Mr. Steen said. “It’s not going to escalate out of the blue. It’s not going to go from owing money to CRA but hearing nothing suddenly receiving calls where they are demanding that you pay a lot of money. They are definitely not going to say ‘you’re going to be arrested if you don’t pay’ and they’re not going to want to be paid with Bitcoin or gift cards.” People fall for the CRA and similar scams because they’re fearful. Often it is vulnerable groups that are targeted and do fall for it. “It’s an emotional response,” he noted

In December 2020, the CAFC warned the public of reported scams and frauds related to COVID-19 vaccines. Do not buy COVID-19 vaccines online or from unauthorized sources, they warned. The only way to access safe and effective COVID-19 vaccines is through clinics organized or endorsed by your local public health authority in collaboration with federal, provincial and territorial governments. People should also beware of fraudulent emails, texts or calls about repaying COVID-19 related benefits. Between March 6, 2020 and February 28, 2021 there were 13,553 reports of COVID-19 fraud in Canada and 11,789 Canadian victims with $7.2 million lost to COVID-19 fraud.

The Competition Bureau recommends everyone ‘Take Five.’ “Take five minutes, take five hours or take five days,” Mr. Steen said. “It means take a deep breath, relax and don’t rush. Do your research, consult with others and think about it. You don’t need to make a decision right now. In almost all of these scams, whether the business ones or the consumer ones, if people were to take five, they probably wouldn’t fall victim to these scams.”

Unfortunately, online shopping is very convenient, he said. “With the pandemic, it’s a lifesaver for many people but you have to be careful. You have to do your research. You have to take your time. You have to read things very carefully, look for the terms and conditions and see if there’s anything there that’s not consistent with what you thought you were going to agree to.”

Paying by credit card is probably safe. Credit card companies and PayPal may be able to take some action but if you send a wire transfer, cash or debit card it’s a little trickier to get your money back. Or use a prepaid credit card specifically for online shopping is an option.

Other tips include keeping records of your transactions and ask for a full refund if the company has not delivered in 30 days or 60 days. Request a full refund and report it to your credit card company. Review your statements regularly for unexpected charges. “The same thing with the fake reviews. You just need to read reviews with a grain of salt. Are they really that good? Why are a lot of people rating it five stars and all saying the same thing? You could have a bunch of people really happy but they won’t describe the company in the same way or using the same language,” he said.

For intellectual property scams, check the postmark and return address. Ensure you know when the patent or trademark renews and understand the process and fees for renewal. The information can be found on the Canadian Patent Office website. A third party might file on your behalf but will charge much higher fees.  “It will seem like the government is charging you but you’re paying this third party,” he said.

Never provide or verify business, personal or financial information or passwords either by email or by clicking on a web link or a link within a text message, no matter how legitimate they look. Reputable organizations will never ask for your personal information through email or text. Verify hyperlinks by hovering your mouse over them to make sure they are accurate. Don’t use the contact information provided in suspicious messages; instead, look up the correct information on verified websites.

There are additional tips and guides for various forms of fraud, scams, online theft and identity theft found online at antifraudcentre.ca or competitionbureau.gc.ca. 2021 is the 17th year for Fraud Prevention Month.