|
PARALEGAL DIARY
Telemarketing fraud - and how victims can get recoup some losses
Under right circumstances, banks can be made to pay up if con artists cashed victims' cheques
By Bob Salvador, paralegal
Many seniors and other Canadians are victimized by telemarketing con artists every year. (In fact, the word "phony" came into being after the telephone was invented because people quickly realized the phone will let a person pretend to be anyone they want to be.) The cost of this form of white collar crime probably amounts to billions a year in Canada alone.
I work for a law firm that launched Canada's first mass-action lawsuit against operators of Montreal "boiler-room" phone banks - companies set up for the sole purpose of conning others over the phone. It was a challenging task assembling the evidence, then serving the court documents on these individuals, many of which were in hiding. Our process-server was chased by guard dogs, then followed around by a 'tail' after serving papers on one alleged white-collar thug.
Unfortunately the mass-action lawsuit wasn't successful.
However, while researching this case, we discovered that about 40% of the bank drafts deposited in Quebec were cashed by unknown parties. Thanks to a helpful Supreme Court decision (the Boma case), we were able to convince several banks to simply refund our clients' monies.
Suspected Montreal telemarketers captured on video |
 |
The banks didn't lose any money on these refunds. They simply turned around and charged-back these monies to the telemarketers, some of whom live in the poshest areas of Montreal. OPP Phonebusters estimates telemarketing fraud at $100 million annually.
Due to the huge number of fraud victims and our tiny staff, we couldn't help everyone. More recently, victims have been using the Small Claims courts to try and recover monies back from allegedly negligent banks.
Investigation Reveals Elder-Scam Telemarketers 'Everywhere'
"Spotting a boiler-room is quite easy" - Montreal building superintendent
Montreal-based telemarketing fraud artists are preying on the rest of Canada. Telemarketers target the elderly, the sick, even terminal cancer patients - but only non-Quebec residents. This may be one reason that the Quebec authorities have largely ignored them.
They move fast. These outfits seem to stay at one location for between three to four months on average. They leave abruptly. Then, they open up shop again at a nearby location, sometimes only a few blocks away, using a different company name. They can be tracked through banking records, which are easily obtainable.
They're a thriving cottage industry. While there may be hundreds of company names listed, many of them form part of a chain led by a few individuals.
Very, very, very few have been investigated. Only a handful have been charged. Thus, most of them operate with virtual impunity. In fact, they didn't seem worried about civil or criminal prosecution. Why? At the National Forum on Fraud, an Ontario Asst. Crown Attorney stated that the Crown does not prosecute "non-violent" crimes due to lack of money.
They're easy to spot. One savvy building superintendent says that when a tiny company orders 15 or so telephone lines, you know that they're probably telemarketers. "It's simple," he says. So, why can't the Montreal city officials pay some attention to the problem?
Drugs and alcohol are abused by many telemarketers. Many of the low-level telemarketers are addicted. According to other tenants we interviewed, they often smoke pot on the job.
Montreal telemarketing bosses can afford expensive lifestyles. They've got BMW's, Corvettes, $400K homes and condos. Moreover, they are rarely found at the addresses listed in their corporation registries.
The Montreal-area city officials almost seem to be turning a blind eye to these outfits. Believe it or not, one outfit was within 30 yards of a police station. Moreover, because of a shortage of tenants, landlords have been tolerating their existence. However, these outfits do not pay municipal taxes. Provincial records also indicate that many of them are in default of their annual reporting requirements, which lead us to assume that they probably do not pay Quebec income taxes as well. What's needed here is a genuine will to put an end to telemarketing fraud against the elderly and the rest of the public.
Refunds available for telemarketing fraud victims
You're in luck if your bank drafts were cashed at "club insta paie inc."
According to Ontario Provincial Police Phonebusters, Quebec-based telemarketers take in an estimated $50M+ yearly from Canadians. Detective Barry Elliott of Phonebusters also stated that 79% of these victims are the elderly.
Payments by telemarketing victims are sometimes processed through Montreal 'money-marts' that do not vet their clients as carefully as they could have. Hence, these "instant cash" stores may have a liability under the Bills of Exchange Act as well as in negligence.
The law firm I work for specializes in recovering fraud victims' monies. We believe that some victims should be able to obtain refunds relatively easily from these outfits. Fraud victims or their families should be able to take these steps without getting a lawyer involved.
The steps are fairly simple:
- victim should go back to his or her bank to ask for "endorsement copies" of bank drafts, certified cheques and money orders sent to these telemarketers.
- Determine if the endorsement shows a "Club Insta Paie Inc" stamp indicating that the payment was encashed through the Bank of Montreal at St. Laurent, Quebec. If it does, the victim should send a written demand (via registered mail) for a return of the money from these two companies:
- Bank of Montreal, Law Department, 21st floor, 1st Canadian Place, Toronto, Ontario, M5X-1A1
- Club Insta Paie Inc., 6617 Chemin de la Cote de Nieges, Montreal, Quebec, H3S-2B3
- The written demand should state that the victim believes that the endorsement is either invalid, a forgery, or does not match the name of the intended payee.
- The victim should go back to his or her bank with a copy of the registered letters and ask that the draft be re-routed back for reimbursement.
I can also provide victims with these helpful documents: (Please email your request. The documents will be sent as TIF files, or alternatively, by fax, if you provide a fax number. There is no charge.)
- Example of such payments mentioned above.
- A letter from the Bank of Montreal indicating the procedure of how a victim can obtain his refund.
- Supporting caselaws, including a Supreme Court of Canada ruling.
Fraud victims should always report fraud to OPP Phonebusters. Det. Barry Elliott or Sgt. Gus Laforge, Phonebusters at 1-888-495-8901
Bob Salvador is a consumer-rights paralegal interested in helping the other 98% of Canadians who have not been using the great laws of this land to recover their losses from white-collar thugs. He can be contacted at paralegal777@justice.com.
[ Front Page ]
|
