If you live in Canada, you need no explanation of that headline. We get those calls several times a week, up to three times in one day. The call display on our phone shows a different number each time, often what appears to be a local number. When we answer, we hear a message that our Social Insurance Number has been detected being used for fraudulent purposes and a warrant has been issued for our arrest. We are urged to press a button to speak to a supervisor to resolve the problem and avoid dire consequences.
For people outside of Canada, Service Canada is the government agency that administers programs such as Employment Insurance, Old Age Security, the Canada Pension Plan, the Canada Child Benefit, etc. Each Canadian is issued a nine digit Social Insurance Number (SIN) to identify ourselves for these programs. Employers need to know our SIN, because they have to make deductions from our paycheque for Employment Insurance and Canada Pension Plan. Financial institutions from which we receive interest or investment income need to know our SIN in order to report those income amounts to the government. We are not required to provide our SIN to any other organisation, though it is not illegal for them to ask for it.
Most of us know that these calls purporting to come from the legal department of Service Canada are fraudulent. After receiving enough such calls, we hang up as soon as we recognize the familiar voice. Yet over the past three months the people behind this fraud have succeeded in defrauding 779 individuals of a total $1.5 million. These are almost exclusively vulnerable people such as the elderly who tend to believe anyone sounding official, or newcomers to Canada who do not realize that no government department would demand money in such a way.
Tristan Péloquin, a reporter from the Montreal French-language daily la Presse, recently followed the instructions given by the fraudulent caller to be able to tell how it works. If you read French, his article is here. He was told that 25 bank accounts had been opened using his SIN and all were being used for illegal purposes. When he denied having anything to do with such accounts, he was told that his SIN number would be cancelled and a new one issued. But first he would have to withdraw all his money from his bank account, or accounts, place the money in a special holding account and close those accounts. He would then be able to open a new account using the new SIN and transfer the money to that account. Unfortunately, that holding account was a bitcoin account and if he would have followed through the money would have been gone without any means of tracing it.
According to the RCMP, these calls are coming from India and they are working with the police in India. It is complicated and slow work when the fraud is committed in one country and the perpetrators are in a different country. In 2018 they succeeded in getting several fraudulent call centres in India closed and 45 people arrested. No doubt they will eventually succeed this time also, but the fraud is lucrative enough that others will start up using a slightly different line.
Phone companies are working on technology to block these calls. That is complicated when the fraudsters have the means to spoof numbers that appear to be local and keep on changing them. Mr. Péloquin reports that Telus is offering an ingenious option. When a call comes from an unfamiliar number, the caller gets a message asking them to press one additional number on the keypad, any number. A call coming from a robotic dialling device cannot do this and the call aborts. A live caller pushes a number and the call goes through.
Most people are discerning enough not to bite on such threatening phone calls, or on emails offering free gift cards from Canada Post or Walmart. Those emails are trying to obtain personal information for fraudulent purposes. But there are enough people who do not have such an internal warning system to make these scams profitable. I am thankful for news reports like the one in la Presse that help to reduce the number of people vulnerable to such frauds.