Generally, financial fraud means using dishonest tactics to steal someone’s money. It can involve lies, trickery and other deceitful practices.
Different types of financial fraud
Financial fraud can take many different forms. Here are some examples:
- Identity theft: Stealing personal information (date of birth, social insurance number, bank account number, etc.) and using that information to buy something, or to borrow money
- Credit card fraud
- Pyramid sales and other similar scams: An investment scheme in which money paid in by new investors is used to pay phoney “profits” to earlier investors
- Fake lotteries: For example, a fake contest offering a cruise as a prize
- Share purchase schemes: The fraud artist tells the potential victim that the value of a company’s shares is about to skyrocket, and that the potential victim is one of the few people being given access to this information. The fraudster then gives the victim a chance to buy these shares
- Bogus charities: Requests for donations to charities that don’t exist
- “Nigerian Letter” schemes: Requests to use a bank account to supposedly transfer money out of a foreign country
How do people carry out financial fraud?
People who commit fraud target potential victims in many different ways. They might use regular mail, faxes, emails, telephone calls or newspaper ads. Sometimes, they go door to door. They might even infiltrate a person’s social circle and try to become a friend. In fact, many victims of fraud are introduced to a fraudster by someone they know.
What if people try to sell me things by phone?
People selling products and services are allowed to call you, except for people selling certain kinds of things, such as pre-arranged funeral services.
If the caller speaks to you in person over the phone, there are certain rules the caller must follow. First, at the beginning of the call, the caller must tell you:
- her name and the name of the company she’s working for
- the purpose of the call, and
- what product or service she’s promoting
At some point in the call, the caller must also tell you:
- the price of any product or service being promoted, and
- any restrictions or conditions that must be met before the product is delivered
Also, a seller promoting a product or service cannot provide false or misleading information or leave out any important information.
You can reduce the number of telemarketing calls you receive by signing up for the National Do Not Call List (1-866-580-3625).
What if I’m thinking of buying something over the phone or Internet or by mail?
The law requires the seller to provide you with the following information before you buy anything:
- her name and contact information (phone number and, if there is one, a fax number and email address)
- a detailed description of the product or service
- the total price, including taxes and any extra charges
- the currency you must use to pay (Canadian dollars, U.S. dollars, etc.)
- the delivery date or time period in which the seller will deliver the product or perform the service
- the way the product will be shipped and name of the transport company
- the seller’s policies on exchanges and returns
This information must be presented in a way that’s easy to understand.
The seller can’t ask you to pay part or all or part of the purchase price at the time of the purchase, unless:
- you’re paying by credit card, or
- you’re buying certain products such as a newspaper or magazine subscription, or a trip sold by a travel agent
What should I know about people selling things door-to-door?
Sellers who show up at your door must follow certain rules, unless they are selling goods worth $100 or less. So, students selling $10 chocolate bars for their school don’t have to follow these rules!
Door-to-door sellers must have a permit from the Office de la protection du consommateur (consumer protection office). You can visit the website of the Office to check that this permit is valid.
If you buy goods or services, the seller must give you a written contract containing certain information, including the seller’s contact information, the total price you must pay, and the terms of payment.
The law also gives you the right to cancel your purchase within 10 days of receiving your copy of the contract. In some cases, you have up to one year to cancel the contract if the seller breaks some of the rules.
You should know that there are special rules for some kinds of contracts, such as insurance contracts and contracts for pre-arranged funeral services.
What should I know about people trying to sell me investments?
In Quebec, individuals or firms offering to invest your money in things such as shares in a company or mutual funds must be registered with the Autorité des marchés financiers, a government agency that oversees financial services. To make sure the individual or firm is registered, you can search the agency’s online registry or call 1-877-525-0337.
Also, anyone calling herself a “financial planner” must have a special diploma from the Institut québécois de planification financière. In addition, she must have either a permit from the Autorité des marchés financiers or be a member of a professional association that has an agreement with the Autorité, such as the Quebec Order of Chartered Professional Accountants.
To find out whether a person is a legitimate financial planner, you can check the directory on the website of the Institute or call the Institute at 514-767-4040 or 1-800-640-4050.
Where can I get more information on financial fraud?
Investing and financial advisors:
- L’Autorité des marchés financiers (Quebec) – 514-395-0337 or 1-877-525-0337
- Canadian Securities Administrators
- Sûreté du Québec (Quebec Provincial Police) – 514-598-4141 (NB: website information on fraud is in French only.)
- The Canadian Anti-Fraud Centre – 1-888-495-8501
- Office de la protection du consommateur (consumer protection office).
- Canadian Consumer Handbook
Where can I turn if I’ve been a victim of financial fraud?
You can contact your local police, the provincial Sûreté du Québec police (514-598-4141 – collect calls accepted) or the Canadian Anti-Fraud Centre of the RCMP (1-888-495-8501). If the police department cannot handle your case, it will refer you to the proper department.
For situations involving investments or financial advisors, you can contact the Autorité des marchés financiers (514-873-3090 or 1-877-525-0337).
For cases dealing with a product or service you bought, you can contact the Office de la protection du consommateur (consumer protection office).
If your personal information has been stolen, contact any institutions involved (banks and credit card companies, for example) or government departments that issued the documents (driver’s licence, social insurance number, medicare card, passport, etc.) to ask them what steps you should take.
It’s also a good idea to explain your situation to Canada Post to make sure no one else is receiving your mail.