Outline of known scams

How many times have you heard about a great home business opportunity? Probably more than you care to remember. But to go along with this how many of these home business opportunities ended up being a scam? Again, probably quite a few. Hopefully, you were never the victim of any of these scams. But unfortunately there are others who probably fell for these "opportunities." The fact of the matter is that these scammers would not be wasting their time if they were not making any money. And as long as people continue to get mixed up in this business, these scammers are going to stick around to trick more and more people.

Advance Fee Fraud

Classified advertisements for loan opportunities do not guarantee the legitimacy of a company. Some companies claim they can guarantee you a loan even if you have a bad credit history or no credit-rating at all. They usually request an up-front fee of several hundred dollars. If you send your money to these companies, it is unlikely you will get your promised loan and your advance payment will be at risk. Advance fee loans operating for a criminal purpose generate millions of dollars annually in Canada. Persons with poor credit ratings are usually the key targets and once the 'loan processors' receive your money, they usually disappear.

Have you ever been offered a job to become the middleman for a person / company looking to expand into North America? Sounds like a good business opportunity! The scheme might unfold as follows: You may be solicited by e-mail, while checking a website, by regular mail, telephone or by responding to a newspaper advertisement. You respond to the ad. Your only involvement is to deposit cheques for the person/company. What could possibly go wrong? You receive a cheque for several thousand dollars. Retain a 10 per cent fee for yourself. Then repay the balance using your own money to a person or company located outside North America. Sounds like easy money!. You feel good until your bank notifies you that the original cheque you received was fraudulent. In this case, the criminal(s) defrauded you of the money you sent them. You are also on the hook for the fraudulent cheque you deposited in your account!
 West African Fraud

  Watch out for the Nigerian/West-African Business letter scam! For years now, businesses, learning institutions, and government departments have been receiving e-mails from senders posing as Nigerian/West-African government or business officials offering to share large sums of money.

Do not become a victim. If you have received an unsolicited letter containing any of the characteristics listed below, you should carefully research available information before conducting a transaction. The Commercial Crime Sections of the RCMP within Canada and your local Better Business Bureau are available for obtaining further information on this topic along with PhoneBusters National Call Center. Most letters are variations of the following: You receive an "urgent" business proposal "in strictest confidence" from a Nigerian/West-African civil servant /businessman. The sender, often a member of the "contract review panel", obtained your name and profile through the Chamber of Commerce or the International Trade Commission. The sender recently intercepted or has been named beneficiary of the proceeds from real estate, oil products, over-invoiced contracts, cargo shipments, or other commodities, and needs a foreign partner to assist with laundering the money. Since their government/business position prohibits them from opening foreign bank accounts, senders ask you to deposit the sum, usually somewhere between $25-50 million, into your personal account. For your assistance, you will receive between 15-30% of the total, which sits in the Central Bank of Nigeria awaiting transfer. To complete the transaction, they ask you to provide your bank name and address, your telephone and fax numbers, the name of your beneficiary, and, of course, your bank account numbers. The sender promises to forward your share within 10-14 working days!
 Prize Pitch (Lottery) Scams The classic prize pitch scam involves victims receiving notification by post, phone, or e-mail indicating they have won a prize (monetary or other valued item). However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money. If you have won a prize in Canada there are no fees or taxes to be paid. Tips   keep track of contests, draws and lotteries you enter challenge a caller who says you've won a prize to tell you where and when you entered remember: there are no prize fees or taxes in Canada
 

A pyramid scheme is illegal for the purposes of the Criminal Code when a person participating in the scheme becomes entitled to receive more money than they invested in the scheme by reason of recruiting others. The money is made through recruitment, while the product or service has no real value. The RCMP recommends that those who want an opinion on a particular company seek one from the Competition Bureau (Canada) and/or a law firm specializing in business practices.   Tips   Proceed with caution before deciding whether to participate in any multi-level marketing plan, and watch carefully for the following warning signs: Avoid or seriously reconsider joining any plan that offers commissions to recruit new distributors. Beware of "loading" plans that ask you to buy costly inventory. Beware of claims that you will make money by recruiting new members rather than by sales you make yourself. Beware of promises about high profits or claims about "miracle" products. Beware of "shills"- people paid by the operator to make grandiose claims about the success of the plan. Refuse to make a financial commitment or sign a contract in a high-pressure situation. Take time to review and re-evaluate the plan. Seek legal advice or consult relevant statutes (55.1) if you are unsure what constitutes a pyramid scheme. Ponzi Scheme

A ponzi scheme is one which returns investor's funds not from earnings but from the principal contributed by subsequent investors. No legitimate investment exists and the money from later investors is used to pay off earlier obligations providing an appearance of legitimacy.
 Phishing or Brand Spoofing

What is Phishing?: "Phishing" or "brand spoofing" is the act of sending an e-mail to a user falsely claiming to be a legitimate enterprise in an attempt to scam the user into disclosing private information. Government, financial institutions and online auctions/pay services are common targets of brand spoofing. Methods of transmission: HTML e-mail input form within an email or an e-mail providing a link to a deceptive replica of an existing web page. Characteristics: The content of a phishing e-mail is designed to trigger an impulsive reaction from you. It can use upsetting or exciting information, demand an urgent response, use a false pretense and is not normally personalized. Information at risk: Social insurance numbers, full name, date of birth, full address, mother maiden name, username and password of online services, driver's license number, personal identification numbers (PIN), credit card information (numbers, expiry dates and the last three digits printed on the signature panel) and bank account numbers. Potential uses of your information: Control of victim's financial accounts, open new bank accounts, transfer bank balances, apply for loans, credit cards and other goods/services, luxury purchases, hide criminal activities, receive government benefits or obtain a passport. How to prevent: Avoid embedded links in an e-mail claiming to bring you to a secure site. In some cases, the offending site can modify your browser address bar to make it look legitimate, including the web address of the real site and a secure "https://" prefix.
If you're suspicious: contact the enterprise by using a telephone number or website obtained by a credible source and report never e-mail personal or financial information use anti-spyware, firewall and anti-virus software don't forget to update software on a regular basis