Albertans have lost at least $156M to fraud this decade. Many others don’t report the crime

March 22, 2024 Canuck

Albertans have reported losing more than $156 million to fraudsters since the start of this decade, with tens of millions more being taken each year. But there hasn’t been a coinciding rise in victims — in part, experts say, because people are reluctant to come forward.

In 2023, roughly 2,900 Albertans lost more than $62.5 million to various fraud schemes — up more than fivefold from the $11.3 million taken from about 2,600 people in 2020, data shows.

More than half the reported losses in the province last year were from investment scams, particularly cryptocurrency frauds. Spear-phishing — when scammers pretend to be legitimate sources to con businesses and people into sending money — was the second-most lucrative type of fraud, taking more than $8.5 million from 72 people.

Experts and stakeholders say technological advancements are the driving factor, giving fraudsters the tools to reach more people, be more convincing — and, ultimately, steal more money.

“Fraud is getting more sophisticated,” said Jeff Horncastle, acting client and communications outreach officer for the Canadian Anti-Fraud Centre, which tracks fraud and identity theft.

CBC News obtained fraud data from the agency — which is jointly managed by the RCMP, Ontario Provincial Police and Competition Bureau of Canada — that tracks the number of fraud reports, victims and money lost each year since 2020.

The dataset tracks investment schemes, phishing and romance scams, and several dozen other types of fraud.

The figures likely understate the true impact, Horncastle and others said. The Canadian Anti-Fraud Centre estimates only five to 10 per cent of incidents are reported.

Some people may be apprehensive to report because they’re embarrassed, for instance, Horncastle said. But he and others encouraged people to report fraud.

In Alberta last year, there were nearly 400 fewer reported victims of fraud than in 2022, when 3,300 victims reported losing $52.1 million.

Most provinces and territories, and Canada as a whole, are experiencing a similar trend: mounting fraud losses every year, fewer incident reports, and a fairly steady number of victims.

Investment scams make up almost 60% of 2023 losses

Investment scams, including frauds such as pyramid schemes, have proven the most lucrative in Alberta each year — and the amount the scammers rake in has grown at a dizzying rate.

Of all the money Albertans reported losing to fraud last year, more than 57 per cent — about $35.9 million — was through investment scams, a sharp spike from the $2.4 million in losses reported in 2020.

According to Horncastle, the rise is largely due to cryptocurrency investment fraud.

About 400 Albertans fell victim to investment fraud last year, data shows. Service and personal information scams duped more people.

“People are looking for high returns for their investments, but unfortunately, they often get taken advantage of,” said Alfred Lehar, a finance professor at the University of Calgary.

“If it’s a great investment opportunity, people are probably willing to send more money.”

Often, victims see a return on their initial small investment, which encourages them to give larger sums of money — and then the fraudsters take it, he said.

Cryptocurrency, which doesn’t have a central bank regulating policy or controlling supply, has made it easier to move money abroad, said Lehar, who has expertise in financial technology.

The blockchain — a system that records transactions — can be used to trace the flow of a cryptocurrency to a wallet address, but its owner remains anonymous. Fraudsters can then take that cryptocurrency and exchange it for cash.

“In cyberspace, there’s no border,” said Qing Tan, an associate professor in Athabasca University’s faculty of science and technology.

“Our [law] enforcement almost cannot do anything for this.”

For André Côté, director of policy and research at The Dais, a think-tank based out of Toronto Metropolitan University, the more pressing issue is how technology is abetting fraud overall.

Better tools

In northern Alberta, Wood Buffalo RCMP recently warned people about emergency scams — and a specific variation labelled grandparent scams.

Fraudsters pull emergency schemes by pretending to be a target’s loved one, detailing a scenario in which they need money immediately, such as posting bail or being allowed to return from a foreign country.

Grandparent scams target seniors — a demographic historically susceptible to scams — by claiming to be a grandchild, or someone calling on their grandchild’s behalf.

“Some of these grandparent scams tug at your heartstrings,” said Sgt. Sabrina Clayton, of Wood Buffalo RCMP.

These schemes have existed in some form through Clayton’s 20 years as an officer, she said. Right now, they’re a particular problem in her region, although they’re reported throughout Alberta.

Nearly 180 Albertans lost a total of about $4 million to emergency scams last year. About four in five of those victims were 60 or older. Together they lost more than $3.7 million of the total.

Like other schemes, the reported returns from emergency scams have grown tremendously over the years. Clayton and others told CBC News that technological advancement is the driving factor.

“It’s really obvious technology progress made the scamming much easier,” said Tan, from Athabasca University.

“You can do the social engineering easily with a lot of available online sources and material.”

Automation helps fraudsters reach more people more efficiently, experts said. Artificial intelligence can impersonate others with deepfakes — or even help fraudsters communicate better by correcting typos in messages.

Côté, of The Dais, said the technology applies to various schemes, including forms of phishing, which ultimately seek to bait or spoof — when something illegitimate appears to come from a known person or institution — people into sharing person or financial information.

“There’s this complex web of how these things are happening,” Côté said, adding that fraudsters may use multiple tactics to victimize someone.

Protecting against fraud

Each person interviewed by CBC News for this story encouraged people to improve their digital and financial literacy, which can help them detect scams and faulty opportunities.

Côté, however, is concerned people won’t be able to educate themselves fast enough.

“It’s likely going to get worse before it gets better,” he said.

“The attackers are increasing their sophistication — and the capabilities of their tools — quicker than we’re able to equip people to deal with this huge onslaught.”

In the meantime, Côté and others urged people to be wary. They said people should scrutinize email addresses, phone numbers, caller IDs and messages, and take steps to protect their information online, such as multi-step authorization.

If presented with what looks like a fantastic financial opportunity, Lehar from the U of C suggested people do their research before sending money, such as speaking with a regulated financial adviser.

“If there was a magic investment opportunity that would make you rich, then people would take advantage of that — and people would not reach out to you to be part of that,” Lehar said. “That’s just too good to be true.”

Clayton, of the Wood Buffalo RCMP, said if people receive a call from someone claiming to be a person they know and they’re asking for money, they ought to hang up and try calling that person back on their own to confirm the story.

View original article here Source

Canada News

Albertans have lost at least $156M to fraud this decade. Many others don’t report the crime

Investment scams make up almost 60% of 2023 losses

Better tools

Protecting against fraud

Sahara Sailor Water Bottle, 32oz Motivational Sports Water Bottle with Time Marker - Times to Drink - Tritan, BPA Free,…

Royale Velour Toilet Paper, 12 Equal 24 Rolls, 142 Bathroom Tissues per roll

Strap Tie Slippers for Women Crocodile Embossed Flat Sandals Cross Strappy Open Toe Summer Trendy Slide Sandals

Owala FreeSip Insulated Stainless Steel Water Bottle with Straw for Sports and Travel, BPA-Free, 32oz,…

Utopia Bedding All Season Comforter - Ultra Soft Down Alternative Comforter - Plush Siliconized Fiberfill Duvet…

AmazonBasics Light-Weight Microfiber Sheet Set - Twin, Frosted Lavender

Brita Standard Water Filter, Standard Replacement Filters for Pitchers and Dispensers, BPA Free, 3 Count

Jacked Factory Creatine Monohydrate Powder 425g - Creatine Supplement for Increased Muscle Mass*,…

Glad White Garbage Bags - Tall 45 Litres - ForceFlex, Drawstring, with Febreze Fresh Clean Scent, 50 Trash Bags,…

WNEEDU Womens Summer Sleeveless Tank Tops Eyelet Embroidery Spaghetti Strap Hollow Pleated Flowy…