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Indian call centers linked to Canadian phone tax scam raided

Canadian phone tax scam report_CBC Marketplace-The National report screenshot
Canadian taxpayers have been victims of a telephone tax scam in which identity thieves purport to be from the Canada Revenue Agency. Tax and law enforcement authorities hope recent arrests at Indian call centers will at least slow the scam. (Screenshot from the joint The National/CBC Marketplace report. Click image to watch full video.)

Despite some recent diplomatic and trade strains in the United States' relationship with Canada, the two countries share a lot of things, including tax scams.

The most pervasive tax scam in America is telephone calls made by crooks pretending to be Internal Revenue Service agents. The criminal callers demand payment — in ways not used by the real U.S. tax agency — or they tell their victims that they will be arrested or deported.

At last count, U.S. residents had handed over $63 million since October 2013 to the con artists. And the calls are continuing, albeit at a slower rate, even after many of the India-based callers were arrested, indicted, pleaded guilty and imprisoned.

Now we're seeing a similar crackdown on an almost identical tax scam north of the 49th parallel.

Canadian calls echo U.S. script: At least 60,000 Canadians have complained about being targeted by the phone scam over the past five years, according to a recent CBC report.

The crooks claim to be agents of Canada Revenue Agency (CRA) and threaten their targets with arrest over unpaid taxes.

Over the past several years, frightened Canadian taxpayers have handed over an estimated $10+ million making the fake CRA agent call one of the largest cyberscams in the country's history.

The methodology used by the Canadian tax crooks, judging by the CBC story's details, closely follows the U.S. scam script:

Quotation-marks-quoteRobo-dialers call Canadian cellphones and landlines en masse, leaving a message that tells the recipient to call back. Those who do begin with a "call opener" who typically outlines a series of threats, including arrest, loss of employment, seizure of assets, and even the removal of their children.

But just as quickly, they offer to help the caller clear his or her name through a quick payment and a reduced fine, often in the thousands of dollars.

If a caller agrees, they are transferred to a "call closer," much like in a sales operation, who continues listing off threats and outlines where the money should come from and how it should be transferred. These details are often described in such a way as to avoid raising the suspicions of a bank.

As in the U.S. case, the favorite targets were the elderly and new immigrants.

Also as in the U.S. case, many of those tax scammers, whom law enforcement officials have described as financial terrorists, are based in India.

Cracking the Canadian call case: The U.S.-Canadian tax scam calls also have one other key connection.

The crooks are based in India.

And, again as in the U.S. case, some of the alleged scam perpetrators now have been arrested and their call centers closed.

Over the past two weeks, Indian police, working in conjunction with Canadian law enforcement, have raided the suspected scam call centers and arrested everyone on the premises.

In addition, officials seized documents and equipment they allege was used to commit phone fraud aimed at foreigners.

Canadian phone tax scam items seized in raids on Indian call centers_CBC Marketplace-The National report
Screenshot from The National-CBC Marketplace report. Click image to watch full video.

Indian officials say 28 people were arrested in just one of their sweeps, including two believed to be the operation's kingpins.

The raids were the result of visits by Canadian police to India, specifically a suburb of New Delhi where the tax scam activities were believed to be based.

"This is just the beginning, said Chief Ajay Pal Sharma of the Noida Station. "More illegal call centers are running in the city, which will be busted soon. We will be conducting more raids."

That's the same message being send by Canadian officials: "We're coming for you."

"We're going to work jointly, collaboratively to take you down," said Supt. Peter Payne, head of financial crimes at the Royal Canadian Mounted Police.

Taxpayer awareness still key: As the law enforcement and legal systems go about their work to stop the tax scam calls, Canadian officials continue to emphasize prevention over prosecution.

"It's more of an education awareness thing," Payne told the CBC. "These scammers are not going to stop."

Although there are some operational differences between the CRA and its U.S. equivalent IRS, their messages on how to combat tax identity theft are, not surprisingly, similar in many respects.

In most cases, the CRA and IRS will not:

  • Send taxpayers unsolicited emails with a link and ask the taxpayer to click on it to divulge personal or financial information.
  • Ask for personal information of any kind by email or text message.
  • Request payments by prepaid credit cards.
  • Give taxpayer information to another person, unless formal authorization is provided by the taxpayer.
  • Leave personal information on an answering machine.

The CRA has a special tax fraud Web page with tips on how to recognize fake calls and protect yourself from tax-related identity theft.

The IRS, too, has an online guides to identity theft for individual taxpayers and tax professionals.

Tax ID theft prevention tips: Check out those pages for your location at your leisure, as well as take a look at my prior blog posts on tax scams.

In the meantime, here are some highlights for U.S. readers on how to prevent your tax data from being stolen by a crooked caller and used to commit tax fraud:

  • Don't give the caller any personal, tax or financial information.
  • Write down details of the call, such as the number that shows up on caller ID and name that the caller gives.
  • Hang up.
  • Contact the IRS directly and toll-free at 1-800-829-1040 if you're worried that you might have a legitimate tax problem.

Also report the call. Let TIGTA know via its website or by phone, toll-free, at 1-800-366-4484. Tell the FTC about the call at its special online complaint form or by calling it's free hotline at 1-877-FTC-HELP (382-4357).

And do warn your family and friends, especially older individuals who, both in the United States and Canada, are prime scam targets because they often are more trusting of purported authority figures.

The bottom line regardless of where you live or pay taxes is to always be alert. If something doesn't sound right, take the time to do some checking before acting. Hitting pause could save you a lot of personal tax grief and money.

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