Advance fee fraud is when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialize. Some of the more common types of frauds are listed below. LEARN MORE and LEARN MORE
These involve materials forwarded to the recipient by way of mail or private carrier in which the information is either false, deceptive or misleading and causes the recipient to act on the information by providing an advance fee.
Rental fraud happens when would-be tenants are tricked into paying an upfront fee to rent a property. In reality, the property does not exist, has already been rented out, or has been rented to multiple victims at the same time. The victim loses the upfront fee they have paid and is not able to rent the property they thought they had secured with the payment. Rental fraudsters often target students looking for university accommodation.
These occur when a recipient receives a letter, email or phone call from a fraudster claiming to be a bank employee. The fictitious employee will either try to:
- obtain an advance fee for a banking issue in which money is owed or claim that a fraud has occurred and they can retrieve the money but require an advance fee before doing so
- ask questions in order to obtain personal information or banking information in order to gain access to the recipient’s bank account.
Legitimate banks do not operate in this manner. Do not provide any information and instead attend your bank and speak with a trusted employee you know.
Similar to Bank Inspector Fraud, the recipient is contacted by a fraudster claiming to work for the Canada Revenue Agency. The fraudster alleges that money is owed for income tax and claims that the issue can be resolved with an advance fee.
The Canada Revenue Agency does not operate in this manner. Do not provide any information and instead contact Canada Revenue Agency at the link provided.
This scam occurs when a recipient receives a message from a fraudster pretending to be a family member or someone helping a family member who is in jeopardy. Requests are made to forward monies in order to help the family member with either a legal or medical issue.
Often grandparents are the targets of these. Do not disclose any personal information and family information to the fraudster. Verification can be done by contacting other family members.
In this scam, a person claiming to be from a renovation or contracting firm will appear at the victim's door. The person will advise that they are working in the area and noticed that certain aspects of the property require repair or renovation. A special discount price is offered, which may be good only for that day.
The discount may be a special "seniors discount" or a discount offered only because the renovator happens to have "extra material" on hand. The person is overly friendly and appears knowledgeable. The "special discount price" usually turns out to be a price that is much higher than the normal market price. In many cases, the repairs or renovations are not actually needed.
- Never rush into making a deal or signing a contract. Take a few days to think about it.
- Ask for, and check references. The company can also be checked out with the Better Business Bureau and Ontario Ministry of Consumer and Business Services.
- Ask for a written estimate. Then get at least two more estimates from reputable businesses in your area.
- Have any proposed contract checked over by someone trustworthy before signing it.
- Do not provide any personal or banking information.
In this fraud, victims are contacted by a message which states that they can make a certain amount of money each week by being a secret or mystery shopper. When the victim responds, the fraudster attempts to obtain the victim’s personal and banking information. The fraudster then states that the victim will receive a cheque of which they are to cash it and keep a portion as pay. The victim is then tasked to evaluate legitimate stores. The victim is also tasked with evaluating financial institutions and instructed to deposit money into provided accounts. Victims can also be tasked with evaluating money transfer businesses, which include Canada Post, by transferring funds to a specific location. Ultimately the cheque is fraudulent and the victim loses the money spent, deposited and transferred.
These frauds are conducted using the phone. These are similar to Advance Fee Fraud Letter scam however the fraudsters contact the victim by phone. Do not disclose any personal or financial information over the phone and remember that if it sounds to good to be true, it probably isn’t.
This type of fraud involves an offer to become financially independent, or to generate extra income, by setting up your own business. A letter, advertisement or website asks if you are interested in making easy money by working from home, or setting up your own online business. The scheme allows you to choose when you work and enables you to fit your work around your other responsibilities. The work itself could involve filling envelopes, assembling products or selling goods or services through your own website. However, any products or services you are asked to sell are worthless and you won’t be able to sell them. You have to pay money up front to register with the scheme, buy customer leads, set up your web site, buy products to sell, or receive an instruction manual on how to run your business. If you’re asked to assemble goods or fill envelopes, the fraudsters will find fault with your work and use it as a reason for not paying you. Any advertisement that tells you that you can sit back and let a business run itself is a good indication of fraudsters at work. Look out if the scheme operators give contact details that include web mail email addresses such as @yahoo or @hotmail. Genuine businesses do not use them.