“I thought, ‘Why do I have to open the account?’ ” Davis says. But that was only the first red flag about the letter for Davis, who has recently passed legislation that strengthened identity theft protections in Utah.
“I put two and two together and called [the Utah Division of] Consumer Protection,” Davis says. The scam essentially relied on the would-be victim depositing the check into their account and then being on the hook for paying the bank back when it was determined that the check was actually bogus.
While the scam is fairly rudimentary, it’s still more polished then many overseas scams, in which e-mails and letters are riddled with spelling and grammatical errors. The letter included detailed instructions about how to review grocery outlets and even gave explicit instructions that if mystery shoppers called the company’s toll-free number, they should not give any information about their checking account out over the phone.
“They leave a little bit of credence for legitimacy, and then you’ve ripped yourself off,” Davis says. “That’s basically what they’re asking you to go do, ‘take this check and go rip yourself off.’”
Consumer Protection is on the alert since the check scam that landed in the mailbox of Davis was the latest evolution of over-the-border fraud to originate from Canada. Consumer Protection has seen a number of recent schemes coming from our neighbors to the north, likely because fraudsters there have more success with a shared language and different legal penalties for these types of marketing fraud.
The department says that, on average, investigators receive 10 calls a day from people complaining of similar scams. They usually involve wiring money, with the majority of fraudsters suspected to be operating from Canada.
“Typically, in Canada, these [crimes] are just misdemeanors,” says Francine Giani, director of the Utah Department of Commerce, of which Consumer Protection is a division. “In the United States, these would be felonies. And for them to send them into the U.S. from Canada, to cross jurisdictions, makes it very hard for law enforcement to handle.”
The payoff is there for these criminals, Giani says, since the crime is hard to track and fraudsters can use easily accessible Western Union accounts and pre-paid cell phones that can be programmed with numbers specific to regions they want to appear to be operating from.
Canada has been targeting international marketing fraud since 1993 with its Canadian Anti-Fraud Center, which acts as a clearinghouse for various complaints of telemarketing scams. The center has already reported that between Jan. 1 and Sept. 30, 2010, there have been 2,920 U.S. victims of “mass marketing fraud,” reporting a total dollar loss of $12,277,740.
Still, even with that amount, Cpl. Louis Robertson of the Royal Canadian Mounted Police, who works in criminal intelligence for the Anti-Fraud Center, says the paradigm that fraud is shared primarily between the United States and Canada is changing.
“It’s all over the place now,” Robertson says. The appeal to scammers who operate boiler-room operations around the globe is that these crimes force investigators to negotiate a lot more red tape than if the crime had stayed in one country.
“Unfortunately, we have borders, we have state laws and country laws—fraudsters don’t have that kind of blockage,” Robertson says.
While investigators in the United States and Canada are dedicated to rooting out these types of crime, and even Davis has expressed interest in petitioning Utah’s federal representatives to research better accountability of Western Union wire transfers, all agree that the first step is just being aware of such crimes.
“It’s really an educational process,” Giani says. “We can just hope people don’t jump out there and send the money, because once it’s gone—it’s gone.”