False name, Nigerian letter scams abound

What’s in a name? Plenty, particularly if you’re a scam artist.

What’s in a name?

Plenty, particularly if you’re a scam artist.

Clever fraudsters these days take recognizable company names and change them ever-so-slightly so the potential victim doesn’t notice the difference and is led to believe the call is from the real company.

“Fake name frauds are usually cold calls from an organization with a name very similar to the name of a well-recognized company, like TB Waterhouse instead of the real TD Waterhouse,” said Tom Hamza, president of the Investor Education Fund, a not-for-profit organization founded in 2000 by the Ontario Securities Commission to offer unbiased investment education to the general public.

“They are usually selling an investment product, work from a call centre but have no official existence, and may make 1,000 calls to get two clients.”

Fictional companies also may use an address that is incorrectly spelled but is just close enough to the real address to go unnoticed.

Fraudulent financial companies may use a fake address in the financial district to earn your trust or may use a real address but on a floor or in a suite that doesn’t exist.

Company websites also can be misleading.

According to the Ontario Securities Commission, in one case a high-rent company address listed on an attractive financial website actually led to a one-room office where one secretary fielded calls to a variety of scam operations.

The Office of the Superintendent of Financial Institutions Canada posts warning notices on its website about entities it believes may be of concern to the business community and the public.

Another popular scam which demonstrates the power of the Internet is the West African letter, also referred to as the Nigerian 419 scam for its violation of section 419 of the Nigerian criminal code.

Nigerian/West African letters have been around for a couple of decades.

They are unsolicited spam emails sent to investors promising an opportunity to get rich quickly that usually involves the payment of an advance fee.

Recipients are told that the sender is either a high-ranking government official, or a close relative, from a developing country.

Due to some financial miscalculation, the sender has lots of money in a bank account that they can’t access without the recipient’s help.

In return for this help, the email recipient is promised a portion of the money, usually 20 per cent.

As a demonstration of good faith, the recipient has to deposit a sum of money into a bank account which the sender can access, or fax company letterhead and information on the recipient’s bank account. The sender of the letter then drains the bank account.

The letters may originate from Nigeria but could just as easily come from anywhere else in the world.

In the past, fraudsters had to individually address and arrange postage for the letters.

Today, all they need is a computer program and a list of email addresses and they have access to thousands of potential victims at a fraction of the cost.

Corp. Louis Robertston of the RCMP Criminal Intelligence and Analysis unit said fraudsters today can very accurately target their communication to groups by age, economic status, location and other criteria.

“They can fake almost anything and create lists that target very accurately,” said Robertson.

“Just think how much time it takes to reach 10,000 people by email as opposed to reaching them by phone. The market and response rate by email is much higher.”

Many fraud schemes fall in the category of “boiler room” scams because they are conducted from a makeshift office. The fraudsters work in stages, first identifying victims, calling them about a phony survey to find out about investment experience, offer free research, or try and obtain personal information.

Someone else on the team calls back, often many times, with a sales pitch for a probable-sounding business idea, often in an industry sector that’s been in the news.

By the time you realize you’ve been taken, the scam artists have closed up shop and moved on.

“A lot of fraud comes from ignorance,” Robertson said. “People don’t do their research and call up the investment company, check on its validity and go to see the person one on one. All they see is the promised return on their investment.”

Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. He can be contacted at boggsyourmoney@rogers.com.

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