The Canada Revenue Agency (CRA) tax fraud involves individuals being contacted by telephone, text, email, or letter by someone claiming they are with the CRA or RCMP. The fraudsters either request personal or financial information for a refund, or demand payment of back taxes with prepaid credit cards or gift cards.
The callers start off sounding courteous and official, but quickly become aggressive and intimidating. Individuals are threatened with legal action, arrest warrants, criminal charges, deportation, seizure of property, or suspension of wages and bank accounts for not complying.
Fraudsters provide legitimate-looking phone numbers and email addresses for the agencies they claim to represent, so you can confirm the information for yourself. But, these are ‘spoofed’ and just redirect victims back to the fraudsters.
“These calls can be confusing and overwhelming, so fraudsters tend to succeed with those who aren’t thinking clearly, don’t understand the tax process, or are the most vulnerable,” says Det. Linda Herczeg with the EPS Economic Crimes Section.
“They profile you psychologically during the conversation and look for ways to manipulate you. Their strategy is to keep you on the phone and under pressure, so you don’t question why your taxes need to be paid with $2,500 in music gift cards.”
In Edmonton last year, there were approximately 187 victims who came forward to police and reported losing $625,582 to CRA frauds. The victims came from a variety of backgrounds and ranged in age from 20 to 90 years old. Their losses ranged from $100 to $72,000, but some individuals were victims of identity theft as well.
Victims are typically directed to purchase gift cards at specific retailers that do not ask too many questions. The gift cards are often in large denominations and quantities. Once the cards are activated, victims are asked to remove the security stickers and provide the identification numbers to fraudsters, who then sell the numbers on the black market.
To reduce these kinds of frauds, retailers such as Walmart have implemented new processes for the purchase of gift cards, trained staff to look out for frauds, and posted CRA fraud awareness signage at gift card kiosks. Alert cashiers have even intervened with distraught customers who were attempting to purchase thousands of dollars in gift cards.
Jennifer Forster, Manager of the Walmart Windermere Supercentre, says, “Our customers are number one, so we’ve taken steps to protect them from fraud. But quite simply, we talk to our customers to ensure they are making the right purchase and are satisfied when they leave.”
CRA fraud continues to be prevalent across the country and Canadians reported losing approximately $4.3 million to the scam in 2016. For this reason, the CRA has created posters for retailers to place on gift card kiosks to help the public understand CRA frauds and avoid a costly mistake.
“The CRA does not accept payment in gift cards, CRA agents will never try to keep you on the phone for long periods of time, and the CRA will never threaten to arrest you or send police,” adds TJ Madigan, Edmonton Communications Manager, Canada Revenue Agency. “Understanding how the CRA really operates is a good way to protect yourself against fraud especially during tax season.”
How to avoid CRA fraud:
Hang up the phone or delete the email, the CRA does not work this way.
Do not provide any personal or financial information to callers. Be careful what links you click on in emails, and do not share user IDs or passwords.
Contact the Canada Revenue Agency directly if you have concerns or to check on the status of your account by calling 1-800-959-8281 or checking My Account.
Never use pre-paid gift / credit cards, money transfers, or deposits to unknown bank accounts to pay the CRA. Follow established CRA policies regarding assessments and payments.
Choose a reputable accountant or someone you can trust if you require assistance with your tax return. After you review and file your return, make sure you receive your CRA assessment.
Monitor your mail delivery, and follow up on missing statements or unfamiliar transactions. Report lost or stolen mail immediately to Canada Post at 1-866-607-6301.
Shred outdated tax returns and unwanted documents, or store them in a secure place.
Report suspicious activities and frauds to police immediately.
Const. Sean Milne with the RCMP Serious and Organized Crime Financial Integrity Unit, says, “Police agencies continue to coordinate their efforts to shut down these criminal operations, and a raid of a criminal call centre in India in 2016 helped reduce the number of bogus calls. But the best way we can combat this fraud is to continue to share information with the most vulnerable in our community.”
CRA fraud prevention information and retail posters are available from the Canada Revenue Agency. There are also a variety of fraud awareness resources and crime prevention tips available to the public from the RCMP, EPS, Service Alberta, Competition Bureau, Canadian Anti-Fraud Centre, and Scam Detector.
The Edmonton Police Service reminds citizens that fraud prevention is ongoing – we need to recognize it, report it, and stop it. If you are the victim of a fraud, or have knowledge of an economic crime, please contact the EPS at 780-423-4567 or #377 from a mobile phone. Anonymous information can be submitted to Crime Stoppers at 1-800-222-8477 or at www.tipsubmit.com/start.htm.