Offline scams still as big a threat as online ones

You've just withdrawn cash from the ATM and are back in your car, about to leave the parking lot, when there's a knock on your window. "Excuse me," says the stranger. "There's something stuck under your car." Alarmed, you get out and check, while a second man reaches into your car and steals your wallet full of cards.

Or maybe your phone rings and the automated voice at the other end offers you lower credit card interest rates for life, or tells you you've been a victim of fraud, and all the caller needs is your credit card number to proceed to the next step.

You might think you'd never fall for tricks like these, but a string of people in Toronto did during the last two months of 2015, proving that these "old-school" scams are still prevalent. old-scams

It's up to you to be on the alert for such scams, be proactive and know
what to do if you think you're a victim.

Popular offline scams and why they work
Mass-market fraud is a general term used to describe any fraud that exploits mass communications, including online and via telemarketing
and mass mailings. The Canadian Anti-Fraud Centre (CAFC) puts losses due to mass-market fraud at $74 million in 2014. Fraud experts in Canada and the U.S. say it's the biggest form of offline fraud in North America.

One very popular mass-market swindle is "the lower interest rate scam."
It involves an automated call  claiming that  it's your last chance to qualify
for lower credit card interest rates, and  all you have to do is give over your credit card number. You're then charged hundreds (in U.S. dollars) for information on how to talk to banks and apply for new credit cards -- information that's normally free from any bank.

In that same vein, an automated call may announce you've won a deeply discounted vacation or flight, and to claim your winnings, you just have to give your credit card or identification information; the offer is completely fake.

Another common scam is an early-morning call from a fraudster (generally between 5 a.m. and 8 a.m.) posing as a security representative for your credit card provider. They describe a purchase that's supposedly shown up on your account that you didn't make, then tell you'll they'll cancel your card and send you a new one. After rattling off the first four digits of your card, the caller asks you to "verify" the remaining numbers. As soon as you do, the thief can use your card.

"Most scams prey on some kind of emotion," says Doug Shadel, fraud expert and the state director of AARP in Washington state. "We know from research that when consumers make decisions while in a heightened emotional state, they tend to make more mistakes."

Canadian experts say the scammers will try to keep you on the phone in that heightened emotional state for as long as possible and they will always try to get you to act immediately, before you have time to investigate what they're telling you.

"You cannot do the verification process if you allow the suspect to deny you the time you need," says Daniel Williams, senior fraud specialist at the CAFC in Ottawa. "The scammers know that their spell over you can be broken shortly after the communication ceases, so they want money paid by a method that is safe and quick for them."

This same tactic works for those who trick you into leaving your valuables unattended, too. As in the scenario above, the thieves will give you a reason to panic (e.g., "something is wrong with your car") and act while you're in the heat of the moment.

How to be proactive and on the alert
A fraudster's skill is making the implausible seem plausible, but Shadel says many scams employ the following persuasion tactics: they try to make you excited or fearful, they instill a sense of scarcity (e.g., "we're almost out of the product") or they use some other source to gain credibility and trust (for instance, "Bill Gates invested in this"). These scams may work offline, but often the best way to bust them is through online research.

"Use [the scammers'] very success against them," says Williams.

"Nowhere on the globe can you do the same thing to five people without at least three of them blogging about it somewhere." Search the web, he says, and you may be able to find the phone number the suspect is asking you to call, the cheque number on a prize they say you have won, even the amount of money you have won. You may even be able to find the phone number they're calling from, or the name of any fake business they're using.

"Plus, if the scammer is using the name of a reputable company, take a look at that company's website and look for any fraud alerts they may have posted," he says.

It's also important to understand that with today's technology, almost anything can be counterfeit.  You may have received a very convincing looking cheque in the mail, but that doesn't mean it's real. Phone number spoofing technology means a legitimate-looking phone number can easily be fake. A fraudster can create a spoof number with the first three or six digits as other common numbers in your area. The rule "If it seems too good to be true, it probably is" definitely applies.

Even if the caller claims to be from a company you regularly do business with and has details about you, don't be fooled.

"A few minutes of free searching on the Internet can provide a scammer with details of your life that would have taken a scammer in the 20th century many days and dollars to acquire," says Williams. "Do not allow the scammer to gain your confidence by merely revealing information about yourself that everyone has access to with minimal effort."

Never give your card number, or verify anything about their card, to a stranger who has called. If the offer or the information is of interest, take down as much information as the caller is willing to give, and then contact the company in question after you have carefully verified who they are.

"Also, remember that your credit card number is not ID, and that providing it means in reality you are agreeing to be charged for a product or service. If you have not initiated this process, you are being scammed," says Williams.

What to do if you've fallen victim
Sometimes it might be too late. Perhaps you sent the money before you realized it was a scam, or you simply fell victim to a really convincing fraudster. You may have a couple of options to get your money back, but sometimes, you have to chalk it up to a hard lesson learned.

If you've sent the money fairly recently, Williams recommends getting in touch with your bank or money transfer business to stop the money order. "If the scammers have not picked up the funds as yet, there is a chance of recovery," says Williams.

If you paid via credit card, call your credit card company and have the charges reversed. However, if you sent a cheque or money order and it's already been cashed, you may be simply out of luck. Nevertheless, you should contact authorities about it.

"If you have lost money or property, always file a report with your local police," Williams says. "You should also file a report by phone or online with the CAFC." Never be embarrassed to report what happened to you.

"Even in the cases where the lost money cannot be recovered, the information you provide may save other innocent people later on," Williams says.

Some victims get psychologically attached to the idea of winning and refuse to believe they're victims of a scam. Thankfully, Shadel says the AARP has trained volunteers who can provide counselling to such people.

The AARP Fraud Fighter Hotline is 1-800-646-2283, and you can report a fraud to the CAFC by calling 1-888-495-8501.

See related: How to detect online card scams, Why fraudsters target seniors -- and how to fight back, Got a smartphone? What you need to know about smishing
Published December 23, 2015

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