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Are you a potential target for one of the most popular scams in Canada today?
One of the most successful scams in recent history is now affecting Canadian business owners. It goes something like this: a business owner receives a phone call, letter or email saying that there are overdue taxes or something is wrong with their tax return. The caller or email will use very strong language, saying that if you don’t take care of the matter at once, you could be placed in jail. They mention that you might have to pay court charges or face deportation.
This scam –designed to get business owners to pay money they do not owe — has affected thousands of business owners across Canada and the U.S. These callers are also interested in getting financial information from business owners. They may ask for the owner’s social insurance number (SIN), bank account information or credit card information. These callers use very aggressive language and threaten business owners in such a way that many go ahead and send the money to the scammers.
Below, are a few of the tactics that these scammers use to entrap people:
- They will say the issue needs your serious attention.
- They will threaten that all your assets may be frozen.
- They will tell you that you could go to jail or be deported.
- They will emphasize how important it is that you take action immediately.
- Fear is their greatest weapon.
Fraudulent Tax Returns
With these types of scams becoming so successful, thieves all over the world are now using numerous methods to cheat people out of their money. One scam that the CRA is seeing more often involves fraudulent tax returns. Using the most devious methods, scammers will get your SIN or tax ID number, then file a tax return in your name, changing the address so that the thieves get the tax refund. It can take years to get this type of issue straightened out. Sometimes people don’t even realize that scammers have filed a fraudulent return using their name and personal information. It can be expensive and highly stressful to resolve the matter.
Thieves can make an email look exactly like it has come from your bank or credit card company. The email always asks you to click on a link. The appearance and wording can seem so legitimate that it fools even professionals. Usually, once you click on the link, some type of virus or malware will be downloaded into your computer. In some cases, a ransomware virus is downloaded. This virus locks up all your files and holds them hostage until you pay the ransom. These crooks always want to be paid with Bitcoins, pre-paid credit cards or gift cards.
Thieves Are After Your Money!
The bottom line in each scam is money. In fact, one conman who was caught trying to cheat a CBC news reporter confessed that he was indeed employed by scammers. He boldly told the reporter that this company he worked for earned over $10,000 per day by scaring taxpayers into making payments they didn’t owe.
Scams in Ontario
Police in Ontario have reported that these scams have been so successful that their agency has been overwhelmed with calls from individuals and business owners. Both the police and the Canada Revenue Agency (CRA) recommend never giving out personal information over the phone to strangers. Instead, business owners should hang up and call the CRA directly or visit the website, so that you can be certain that you’re speaking with an authentic CRA representative.
Calgary and Toronto police have joined forces to try and stop the scammers from bilking any new victims. Kristie Verheul, staff sergeant at a Calgary police department told news reporters that the police are stepping up efforts to catch the thieves and stop them. Sergeant Verheul said that the average victim loses between $900 and $2,000. In most cases, these amounts are higher when they involve business owners.
The Refund Scam
In this scam, the individual or business owner receives a fraudulent email from the CRA, which, at first, will seem like good news – you’re getting a refund. All you have to do is click on the link they provide. Once you get to the website, you’ll be asked to type in your personal information, including your SIN and banking info. The goal of this scam is to obtain your personal financial information. The bad news is that you aren’t really going to get a refund. Instead, your personal information will be used to set up bogus credit card accounts. Thieves can charge thousands of dollars to accounts in your name and even ruin your credit. Perpetrators of this type of scam are often never caught.
The CRA has this advice for Canadian business owners:
- Never give out personal or business financial information over the phone.
- Do not click on links in suspicious emails.
- If you aren’t sure about the status of your taxes, call the CRA directly. Never call a number listed in an email or phone message. You can check the authenticity of a phone number by calling 1-800-959-5525 for businesses and 1-800-959-8281 for individuals.
- Do not give out personal information to strangers on the phone including your passport number, SIN, your driver’s license number, banking information or credit card info.
General Tips for Safety
The CRA recommends that consumers should be wary of anyone asking you to pay them using gift cards or prepaid credit cards. Payment types like this are often utilized by scammers because they are readily available and completely untraceable. Once you use this type of payment option, there’s no way to track thieves down and get your money back – it’s gone for good.
They also say that real CRA officers will not leave messages either by email or phone that contain your personal information. They never share your taxpayer info with anyone unless you have given them prior authorization to do so. They point out something that should be obvious to everyone: before your tax situation would go so far that you were being threatened with jail time, you most likely would have received numerous letters in the mail.
If you aren’t sure about the status of your latest tax return, visit the CRA website or give them a call at the numbers listed above. Although the lines are often jammed because of the high number of scam-related calls, it’s still better to wait on the phone than pay taxes you don’t owe.