Recently a list of the Top Ten Scams of 2006 was compiled by the Better Business Bureau of Mainland B.C., with the assistance of the Competition Bureau of Canada and the Business Practices and Consumer Protection Authority of B.C. They are:
- Identity theft
- Overpayment schemes
- Door-to-door sales and scams
- Unscrupulous moving practices
- Misleading prize offers
- Lottery and sweepstakes fraud
- Bogus health and fitness claims
- Unscrupulous used vehicle sales practices
- Work at home scams/bogus employment services
- Unwanted office supplies or bogus directory scams.
Homeowners are the victims in many of these scams, but perhaps the two biggest issues are mortgage fraud and renovation scams.
At the International Fraud Investigators Conference in Toronto this month, crime expert Chris Mathers warned that mortgage fraud has become "an epidemic" in developed countries, "especially Canada."
Earlier this month, the Ontario government passed legislation that will ensure that ownership of a property cannot be lost as a result of the registration of a falsified mortgage, fraudulent sale or counterfeit power of attorney. It has also beefed up the province's Land Titles Assurance Fund to ensure that compensation is provided within 90 days for those victimized by mortgage fraud.
The Ontario government says the most common type of mortgage fraud is when someone buys a property and artificially increases its value through a series of sales and resales with another fraudster. A mortgage is then secured based on the artificially high price. Title fraud occurs when the bad guy uses a stolen identity to transfer a registered owner's title to himself. He then gets a mortgage on the property and disappears with the money, often without the homeowner knowing anything about the scam until the financial institution comes calling for the mortgage payments.
Mortgage fraud can be a form of identity theft, so the best way to avoid problems is to make sure you keep your personal information safe. The RCMP offers these tips to avoid becoming an easy target:
- Sign all credit cards when you receive them. Never loan your credit cards to anyone. Cancel cards you don't use and keep a list of the ones you do use. Report lost or stolen cards immediately. Watch for any discrepancies in your monthly statements.
- Never leave receipts at bank machines or wickets, in trashcans or at unattended gas pumps.
- Shred pre-approved credit card applications, credit card receipts, bills and related information.
- Never provide personal information such as your PIN number, Social Insurance Number, credit card numbers or date of birth over the phone unless you initiate the call.
- Avoid keeping a written record of these numbers, and never keep this information in your wallet or handbag.
- Remove mail from your mailbox promptly and don't leave pieces of mail lying around your home or work site.
- Avoid mail, email and phone solicitations disguised as promotions or surveys offering instant prizes, designed for the purpose of obtaining your personal information including credit card numbers.
Renovation scams are often aimed at seniors, and frequently involve someone coming to your door to say that your roof needs fixing or the exterior of the house needs work. Don't allow yourself to get talked into doing work by a stranger. Plan the work you want to do carefully and contact more than one company to get quotes for the job. Be sure to ask for references and check them.
In Ontario, you can contact the Ministry of Government Services' Consumer Beware Database to see if there have been any complaints against the company you are considering for the job.
Put down everything that you want done in writing. You should have a contract with the renovator that spells out what materials will be used (including the quality of the products if you are going for premium materials), and how much they will cost. The contract should also spell out how long the job will take, and should include the name and address of the contractor. Make sure the work will be done by the same company that you sign the contract with -- some firms contract jobs out and that nice young man that you were dealing with never comes back to your job site.
Avoid paying large up-front fees and deposits. The deposit should be no more than 10 per cent of the total cost.
If you don't have a 2007 calendar yet, check out the 2007 Smart Consumer Calendar. It offers year-round tips to help avoid scams, and is available as a PDF download .
