The responsibility for sniffing out scams and stopping potentially large amounts of money being pilfered lays with the individual, with only a few safeguards in place from financial institutions. (Dreamstime)

By Alex Rawnsley

YOU'RE on your own

‘The customer is responsible:’ astute employees providing thin line of defence against payments to scammers

Mar 23, 2022 | 5:27 AM

NANAIMO — The onus remains very much on the individual when looking to determine if they’ve been caught up in a scam.

NanaimoNewsNOW reached out to a number of organizations after a senior couple in Nanaimo lost nearly $400,000 in a long-term lottery scam, shortly after an Oceanside resident lost hundreds of thousands of dollars over five months in a romance con.

Nanaimo RCMP could not confirm which financial institution was used by the senior couple who lost nearly $400,000, only saying it occurred over at least a year and involved hundreds of transactions.

Banks and credit unions are subject to a host of regulations from the government and a variety of organizations, as well as codes of conduct from groups like the Financial Consumer Agency of Canada.

The Agency supervises federally regulated financial entities including banks and credit unions.

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A public affairs officer with the Agency was unable to arrange an interview for this story, however pointed to a code of conduct adopted by the Canadian Bankers Association (CBA) and its members in January 2021.

It is specifically targeted at seniors and their banking needs, with one of the seven key principles being “endeavour to mitigate potential financial harm to seniors”.

It did not elaborate on specific steps designed to mitigate harm.

A representative from the CBA also declined an interview, instead providing a written statement which said member banks are “dedicated to helping protect their customers from financial fraud” but ultimately the responsibility is with the account holder.

“Bank staff are aware of different fraud types and tactics and are trained to ask probing questions if a customer makes an unusual transaction. As the owner of the account, however, the customer is responsible for any funds that she or he withdraws from their bank account.”

The statement continued to say banks walk a line between detecting and preventing fraud and allowing easy access to a customer’s money.

“The Canadian Bankers Association (CBA) and its member banks actively share fraud prevention information throughout the year to raise awareness and provide actionable tips on how customers can detect and prevent scams.”

Rules for Credit Unions in British Columbia differ a little, however NanaimoNewsNOW was unable to find any specific industry-wide rule or training required for staff to detect this activity.

Chris Carter, vice president and deputy superintendent for market conduct with the BC Financial Services Authority told NanaimoNewsNOW during an interview, their role as a regulatory body for credit unions in the province is to maintain open dialogue with branches.

“Where there are particular vulnerabilities in the system or with particular institutions, we want to hear about that and we will then have a conversation with the Credit Union in order to be able to understand what they’re doing to respond to that risk, to respond to that gap.”

Carter said consumer protection is the BCFSA’s “true north” guiding principle. He pointed to a newly adopted market code of conduct which is currently being implemented.

It would require credit unions to adopt and comply with enhanced business practices, however it wouldn’t specifically deal with scam-related transactions.

More on the BC Financial Services Authority is available on their website.

How to spot common scams and avoid being a statistic
The scam call industry is worth billions around the world and Canada is no exception.

Sue Labine from the Canadian Anti-Fraud Centre told NanaimoNewsNOW, the theft of $400,000 from one victim is unusual, with scammers typically grabbing what they can as quickly as possible before moving on to another victim.

“They’re all excited, they get the victim really excited thinking they’ve really won something but they’ll say ‘let’s get this going real quick and you must pay an advance fee’.”

While it’s easy to say ‘that would never happen to me’, Labine said the language and tactics used by scammers can be very convincing.

Call centres also play the numbers game and find victims easily.

“Their tactic is they reach out to thousands a day so they’re able to victimize people much quicker now with the technology that’s out there. They like to really stress the person has won and really push the urgency of them sending money right away so they don’t miss out on the prize.”

In 2021, the Canadian Anti-Fraud Centre received 16,920 complaints about scam calls, with 32 per cent of those callers indicating they’d fallen victim.

Total losses to scammers from Canadian victims exceeded $32.9 million last year.

While seniors make the most obvious target, generally having less contact with family members and less savvy for the latest scam developments, Labine said scammers will target anyone.

She said the biggest red flag when dealing with cold calls or emails claiming you’ve won a prize is them offering you winnings from a contest you never entered.

“You shouldn’t be afraid to say no. Don’t react impulsively, just make sure you scrutinize urgent requests, ask specific questions. With the prize scam if you really stop and think ‘did I buy a ticket? Did I enter this draw?’

Scams are typically constant throughout the year, however, reports do increase around the holidays, particularly among merchandise or romance-related schemes.

Join the conversation. Submit your letter to NanaimoNewsNOW and be included on The Water Cooler, our letters to the editor feature.

alex@nanaimonewsnow.com

On Twitter: @alexrawnsley