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Home   Border Cooperation Mass-Marketing Fraud Backgrounder
Mass-marketing fraud is a serious crime that touches the lives of consumers in Canada, the United States, and around the world. With advances in technology and the Internet, fraud can be perpetrated in one country with victims in another, presenting multi-jurisdictional challenges for law enforcement. Once thought to be a crime targeting seniors, mass-marketing fraud impacts consumers in all age and demographic groups. It includes fraudulent telemarketing, advance fee loan schemes, prize pitches, 1-900 scams, fraudulent e-mail solicitations, and false charities. For example, the RCMP recently warned the public to be careful when making donations to organizations claiming to be involved in Hurricane Katrina relief operations. Mass Marketing Fraud: Actions and Results
Canada and the United States have been working together for several years to prevent and limit cross-border mass-marketing fraud. The Binational Working Group on Cross-Border Mass-Marketing Fraud produces reports for the two governments every five years. In its last report in May 2003, the Working Group set out a plan with some of the following action items: - In investigating and preparing to prosecute cases against particular cross-border fraud schemes for prosecution, police, law enforcement agents, and prosecutors should explore all avenues for seizing and forfeiting proceeds of the crimes traceable to those schemes and returning as much money as possible in restitution to victims of the schemes.
- Prosecutors and civil enforcement agencies in both countries should consider whether to use "sweeps" - a series of coordinated enforcement actions against similar types of criminal or fraudulent activities - in selected categories of cross-border fraud cases.
- Both countries should take steps to facilitate the prompt sharing, both at national levels and among existing and future interagency task forces, of public information about enforcement actions against cross-border fraud schemes that law enforcement, prosecutive, and regulatory agencies in either country have taken, including information about the impact of those schemes on individuals and businesses.
- Both countries should coordinate their efforts to consult with the financial services and electronic payments industries about specific measures to reduce the use of particular payments mechanisms by cross-border fraud schemes.
In a May 2005, Deputy Prime Minister and Minister of Public Safety and Emergency Preparedness Anne McLellan, Minister of Justice and Attorney General Irwin Cotler, and U.S. Attorney General Alberto Gonzales met in Ottawa and noted that there has been concrete progress in tackling various forms of cross-border crime, including mass-marketing fraud. For instance, in February 2005, Project CORAL targeted and dismantled a Montreal-based criminal network involved in fraudulent telemarketing. The operation brought together the RCMP, Sûreté du Québec, Service de police de la Ville de Montréal, Competition Bureau of Canada, Immigration and Customs Enforcement of U.S. Homeland Security, Federal Bureau of Investigation (FBI), United States Postal Inspector Service and North Carolina Attorney General's Office. The criminal organization specialized in fraudulent misrepresentation with respect to pre-approved bank loans. Investigators found that 100,000 victims were defrauded of C$45 million (approximately US$36 million) over a period of 18 months. PhoneBusters: Recognize it; Report it; Stop it
In addition to the diligence of government and law enforcement in Canada and the United States, consumers on both sides of the border can help combat fraud by reporting any fraudulent activities to local law enforcement and to PhoneBusters. Established in January 1993, PhoneBusters is a national anti-fraud call centre jointly operated by the Ontario Provincial Police and the Royal Canadian Mounted Police. It plays a key role in educating the public about specific fraudulent telemarketing pitches and in prosecuting key individuals involved in telemarketing fraud. PhoneBusters' mandate also includes facilitating prosecution by U.S. agencies through extradition. Identity Theft: Responding to a Growing Concern
In October 2004, the Minister of Public Safety and Emergency Preparedness and the United States Attorney General released a joint Canada/United States Threat Assessment on Identity Theft. The report noted that, "In 2002-2003, total losses to individuals and businesses related to identity theft in the United States were estimated at approximately US$53 billion. In Canada, the losses for 2002 were estimated at approximately C$2.5 billion." A growing identity-theft concern is phishing. Fraudsters set up websites and send e-mails that appear to be from trusted businesses, financial institutions, and government organizations in an effort to obtain personal information. Consumers are advised to be suspicious of any unexpected requests for these details, not to respond immediately, and to contact the relevant institution to double check. Law enforcement, government, and the private sector in both countries are strengthening efforts to combat identity theft, including: - Coordinated education and awareness initiatives, such as joint public advisories;
- National points of contact to report incidents of identity theft;
- Enhanced identity theft reporting by law enforcement and the private sector; and
- Reviews of legislative frameworks to keep pace with changing technology and new trends to ensure the integrity of data.
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