Ever since I can remember I've heard the comment that there is "no difference" between Canadians and Americans. I respectfully beg to differ as there is a difference on so many levels! We have unique Canadian culture consisting of Canadianisms, a Canadian perspective on world events, Canadian cuisine as well as products and foods only available in Canada. This blog is dedicated to celebrating all things Canadian from "my perspective" as a Canadian. Please enjoy your visit and be sure to visit often.

Garden Gnome
Americans should never underestimate the constant pressure on Canada which the mere presence of the United States has produced. We're different people from you and we're different people because of you. Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, if I can call it that, one is effected by every twitch and grunt. It should not therefore be expected that this kind of nation, this Canada, should project itself as a mirror image of the United States.
- Pierre Trudeau

Wednesday, November 17, 2010

Two Canadian Firms Face US Fraud Charges

Direct Financial Management (director David D. Richards) of Mississauga, Ontario and Elite Financial Group of Oakville, Ontario are facing a variety of fraud-related charges in the U.S. after authorities shut down an alleged scam that took close to $13 million from 13,000 consumers1.  Each company is facing eight count including misrepresentation in advertising, marketing and promotion; violations of the telemarketing sales rule; failing to provide refunds; violating the do-not-call registry; and using pre-recorded robocalls.  Both companies promised consumers relief from high interest rates for a fee of $995 charged immediately to their credit card.  The companies would place a three-way call to the consumer's credit card company requesting a lower interest rate but typically the answer was no.  Although consumers had been promised refunds if they did not get a lower interest rate, few got them.  Business assets have been frozen.  The Federal Trade Commission (FTC) is trying shut down the businesses while the Ontario's Attorney General has filed suit against the Canadian principals to help recover money owed to the consumers involved in the fraud. 

From this Canadian's perspective, this type of thing is nothing new.  It's just a more refined way of scam artists targetting easy victims.  The problem is with the current economic downturn there are many more easy desperate victims trying to survive.  Normal, hard working folks with a debt ratio in line with their income have suddenly found out that losing a job can quickly put them into desperate mode as they look for more ways to save money.  A promise of a savings of $2,500 in interest if they paid $995 immediately on their credit card looks rather good, doesn't it?  A few things strike me as interesting about this whole ordeal.  First off the consumers themselves bear responsibility in allowing themselves to be ripped-off.  True desperate people are more vulnerable to fraud but if something sounds too good to be true it likely is.  Second, the credit card companies should have recognized this as a scam and refused payment.  Quite often if a suspicious attempted charge it made against a credit card, the credit card company will call the card holder to confirm the charge and they usually will put a hold on the card to prevent further charges until they can speak with the card holder.  Third, several agencies were involved with this fraud investigation including the FTC, Ontario's Attorney General, RCMP, Toronto Police Fraud Squad, Ontario Provincial Police and the Ontario Ministry of Consumer Services.  Who's missing in the investigation that should have been involved?  The CRTC allowed this telemarketing scam to continue without ever stepping in.  It even allowed the scam to cross over into the US.  We personally had several phone calls from these telemarketers despite being on Canada's National Do Not Call Registry (DNCR).  We finally ended up adding them to our phone feature call block.  The CRTC had the power to not only shut these  telemarketing scammers down they also had the power to impose fines for continuing to contact people on the DNCR.  Who else is missing?  The credit card companies themselves.  You can't tell me they did not recognize this scam!  They should have raised the red flag right from the first credit card charge that led to a phone call asking them to reduce the interest rate and when they said no the other party just said thanks for the payment.  Who else is missing?  The phone company (likely Bell Canada) would have started receiving complaints when the first consumer realized they had been taken for $995.  There's no doubt that the phone company helped in the investigation but when did they start acting?  Once they had more than one complaint they should have been investigating internally and raising the red flag.  The phone company needs to send a strong message to these telemarketing scammers by charging them for the fraudulent use of phone services if only to serve as a warning to other wanna-be telemarketing scammers.


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