New home phone fraud scheme dupes 5 Toronto victims out of $5.1M

February 9, 2018

Toronto police on Friday warned the public about an "emerging" and relatively sophisticated phone fraud scheme that has already cost at least five victims in Toronto more than $5 million in financial losses.

The scam starts with a phone call to a would-be victim's landline. The caller purports to be a retailer — in these instances, a jeweller, though police warned that could vary — contacting the victim to report that their credit card is being used for a fraudulent purchase.

The caller asks the victim to contact 911, or, in some cases, their financial institution, to alert them to the attempted fraud. 

Now comes the crux of the scam. The victim believes the caller has hung up. In reality, however, the caller has remained on the line. The victim dials and believes they've reached 911 or their bank, when in fact, they're back on the line with another scammer posing as a police or bank investigator. 

Victims are then urged to transfer money into a specific, separate bank account to protect it during the "investigation."

"That's the generic scheme but there are variations," said Det.-Sgt. Ian Nichol, with Toronto police's financial crimes unit. 

While it varies from provider to provider, there's often a lag time between hanging up and a call being truly disconnected. According to Nichol, it can range from between 13 and 25 seconds. It is this lag that allows fraudsters to remain on the line while a victim makes a quick, panicked call to try to save their money. Nichol said some victims reported hearing a dial tone, which contributed to their belief that the call they were making was legitimate.

A key part of the pitch is convincing victims that secrecy is paramount to a successful investigation. Nichol said. In some cases, the scammers have communicated with victims over a course of several days and multiple calls.

They use a technique known as "call spoofing" to obscure their identity. the easily acquired technology makes calls from the perpetrators appear to be from reputable sources on the victim's call display. 

Read more: New home phone fraud scheme dupes 5 Toronto victims out of $5.1M