When times are bad, it seems there’s no shortage of scam artists around who try to make things worse.

"During Hurricane Katrina and the 2005 tsunami, scammers quickly jumped in to take advantage of people when they were desperately looking for help, and we are seeing the same thing happen in the current economic crisis,” says Douglas Simpson, president of the Canadian Council of Better Business Bureaus (BBB). "In this financial environment, it is more critical than ever for consumers to guard against fraud artists and scammers working to cheat them out of their hard-earned money. This is especially true online, where it’s harder to know with whom you are dealing.” The BBB says that Internet fraud artists are sending emails that offer consumers new mortgages and loans, even for those with poor credit ratings. The catch is that it costs a fee to take out the new mortgage.

"Before you jump up and send in that processing fee or security deposit, be warned that this is likely a scam and advance fee loans are illegal in Canada,” says the BBB. "You should never have to pay cash in advance for a loan. Many people have filled out their application for their loan, sent in their money and then have never heard back from the company. Now, the consumer is out the anticipated 'pre-approved’ loan but also the processing fee as well.”

Real estate fraud continues to catch unaware homeowners, who discover that someone has taken out a mortgage on their home without their knowledge. Fraudsters use stolen identities or forged documents and transfer the registered owner’s title to themselves. Then they take out a mortgage on the property and disappear with the money.

You can help avoid this and other identify fraud consequences, such as having your credit card or debit card used for unauthorized purchases, by carefully protecting your personal information. Keep your birth certificate, social insurance card, bank account numbers and credit card numbers in a secure location that no one can access. Don’t carry your birth certificate or SIN card in your wallet. Never reply to emails that supposedly come from your bank, asking for personal information – if the bank needs such information, they won’t ask for it by email.

If you’re thinking of renting your home or have an investment property, check the references from prospective renters carefully and check on your property regularly.

You should always check your credit card and bank statements carefully to make sure there are no irregularities. Bells should go off if bills that you are expecting don’t arrive, or if you start getting calls from companies about purchases you didn’t make, or about a new mortgage you didn’t arrange.

In 2008, Canada’s Competition Bureau received almost 15,000 complaints about mass marketing fraud – the term for fraud by mail, telephone and the Internet.

Among the most common were notices that the recipient had won a prize, but they were asked to send some money in order to collect their winnings. Legitimate lottery and sweepstakes contests never charge a fee to deliver or collect a prize. If you get a call about winning a contest that you don’t remember entering, chances are it’s a scam. The old adage that "if it sounds too good to be true, it probably is” still applies.

Another popular rip-off is the cheque overpayment scheme, where the scam artist overpays for a product or service you are providing, and then asks you to provide a refund. Or, a consumer is asked to be a "mystery shopper” and is sent a cheque and asked to deposit it. Then they are asked to deduct a small amount for their "wages” and wire the rest back to the company, and complete a survey about the service they encounter. In both cases, by the time the victim has cashed the original cheque, the bad guy has taken the money. You should never agree to wire money to another location – legitimate buyers or employers would never ask for this.

Some other ways to protect yourself from scams:

  • Shred old personal documents.
  • When dealing with salespeople over the phone, ask for a call-back number. Take the time to think the offer through – if you are feeling pressured, you don’t have to decide right now.
  • If you are moving, get the moving company to provide a detailed estimate in writing. Ask what kind of insurance they have in the case of lost or damaged items, and make sure this is spelled out in your quote.
  • When hiring someone for home renovations, get written estimates of the work to be done and check out the contractor’s references. Home renovation contractors are one of the biggest sources of complains to consumer protection agencies.

If you think you have been a victim of fraud or have been contacted by a scam artist, call the Canadian Anti-Fraud Call Centre at 1-888-495-8501.

To learn more about various types of fraud, the Competition Bureau has set up a website with an interactive fraud quiz, letters from victims and prevention tips.

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