A look back

May 13th, 2015 | By | Category: ABCs of Fraud, Featured, Finance

By Bud McGinnis

The first submission in this ABCs of Fraud series was published in June, 2002. The current column is number 156, and concludes 13 full years of involvement and will be my last. I thank each of you who has read what I’ve written; without readers there is little incentive to write. I do hope that what was written over those years has been of interest and has helped maintain awareness of con men in our society. They continue to circulate among us with the objective of separating us from our wealth.

The first article noted that the program was developed in Toronto in 1996, and in 2002 was launched in Ottawa by the Rotary Club of West Ottawa with the full support of the Ottawa Police Service. It also outlined a fraud prevalent at the time and still a common problem today. A passerby identified a serious problem with the roof of a house and stopped to notify the owner of its severity. Failure to act immediately would be disastrous, but help was at hand. He just happened to have a crew in the neighbourhood and could do the necessary repairs at a good price. So whether then, 2002, or now, 2015, that type of fast-talking con man is on hand to take advantage of honest seniors.

Thirteen years is not a long period in history but the view differs depending on the observer. But let’s briefly consider those years during which I’ve written ABCs of Fraud articles. Have there been changes? The answer is a resounding “Yes,” and they have been significant. First, the internet has become imbedded in our society. Moreover, a much larger proportion of the seniors cohort is computer literate than was true in 2002. Accordingly, more of us are subject to losses via this electronic highway. Whether it be the loss of personal information via an email “phishing” expedition, or a purchase made and paid for online but never received, more seniors are targets for these crooks.

Secondly, back in 2002, we were subject to credit card fraud but the technique then was much more cumbersome. An ATM had to be “doctored’ in advance. One scheme involved a plastic “Lebanese loop” that had to be installed in the slot to physically capture the card. Then a fraudster needed to stand close to the ATM user to see and record the Personal Identification Number (PIN) as it was keyed in. When the card didn’t work he would sympathize with the victim, saying he had had a similar experience earlier, but it worked the second time he keyed in the PIN. Of course, that didn’t help either, but did give the fraudster a second look at the PIN. It was then recommended that the victim contact the office for help. The card and card number were now readily available when the “loop” was removed from the ATM by the fraudster.

There were other ingenious techniques employed as well. Small cameras were installed over the keyboard to capture the digits as they were keyed in. And the integrity of the ATM itself was altered on occasion to capture the information on the card. Now all of that is out of date. Most cell phones have a built-in camera and it’s a simple process to capture both card number and PIN by using the phone as a movie camera.

In 2002, credit/debit cards used a magnetic stripe to store the required information. Cards today have electronic chips imbedded in them which provide a much greater level of security than did the magnetic stripe. It is still necessary to protect your PIN as it is your electronic signature. That, and your credit card/debit card number opens your account to the thief. For convenience, we also have cards with radio frequency chips that allow us to just “tap and go,” no PIN and no signature required. Unfortunately, the personal information on these cards can be captured by a passerby with an appropriate reader without the cards ever being removed from pocket or purse. It’s important, therefore, to secure such cards by enclosing them in an envelope with a metallic lining.

In 2002, frauds and scams were initiated by phone, by mail, and by personal contact. Frauds and scams included skimming credit/debit cards, telemarketing opportunities, Ponzi schemes, 1-900 phone numbers, work-at-home deals, the Nigerian 419 scam, and foreign lotteries, among others. These same opportunities exist today. Indeed, while I was preparing this text, two offers employing 2002 technology were reported locally. One consisted of a phone call from a well-known hotel chain offering special deals in return for personal and financial information. The second report concerned a long-term financial advisor who was taking money from his clients, seniors who trusted him. Sadly many others, primarily centered around the internet, have been added to the list of 2015. Again, while I was preparing this column, I received an email, supposedly from Canada Revenue Agency (CRA), wanting to transfer $529.21 to my account. As we know CRA does not deal with taxpayers by email. Among other notable schemes are loans, credit-fixers, and purchases that were paid for but never received; the list goes on and on.

It seems here too that the old saying remains true, “Plus ca change, c’est plus ca meme choses!” Good luck to every one of you. Remember, you are your own first line of defense as you attempt to avoid victimization. Please start with the view, “If it sounds too good to be true it probably is!”

Finally, The ABCs of Fraud committee is always happy to arrange free presentations for groups interested in learning more about scams and frauds; just call 613-564-5555 and leave a message. A Rotarian will call back to get details and make arrangements. The presenters are all volunteers, members of Rotary Clubs in Ottawa, and whenever possible a police officer is present to discuss current happenings and answer questions.

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