Tax Tip Thursday
Protect yourself – know the signs of fraudulent calls.
This week a very unfortunate event came to light from last year where someone was scammed out of $1.7 million.
This is not tax oriented at all, but I want to make sure that as many people as possible know about these fraudsters.
This is based on a an article from CBC. The whole article will be available on my website, but I will provide the highlights here today.
Please ensure you tell all seniors around you. Unfortunately, they are the biggest group to be targeted.
Ray Anholt of Victoria recently marked his 90th birthday, but says there was little to celebrate — being the victim of one of the largest-ever bank investigator scams reported in Canada, he was left virtually penniless.
Over six months last year, Anholt lost his life savings — almost $1.7 million.
The scam involved phoney bank employees, fake official letters from various government bodies and politicians, piles of cash, massive bank drafts, gold bars and couriers — but the most unbelievable part of the elaborate ordeal is that two major banks allowed a vulnerable senior to empty his accounts despite red flags.
They watched this 89-year-old man pull out every cent. And while Ray’s loss was massive, he has plenty of company.
Last year alone, Canadians lost more than $643 million to bank fraud — an increase of nearly 300 per cent since 2020. As scams get increasingly sophisticated, experts say our financial institutions lag behind other countries with better protections.
Neither CIBC nor Royal Bank — where Ray was a customer — agreed to an interview. Both banks said in statements that they have robust measures to protect and alert clients when fraud is suspected.
The scam
In June 2024, Ray’s phone rang — call display showed the number was from CIBC, but it was actually a scammer.
The caller said he worked in the bank’s fraud department and needed Ray’s help with an important, national investigation regarding money-laundering.
He instructed him to withdraw money from his accounts, telling him a courier would then pick up the money from his apartment and it would be kept safe until the investigation wrapped up.
The family of an 89-year-old man is questioning why neither RBC nor CIBC didn’t stop him from draining his $1.7-million life savings, despite promises to help keep seniors safe from fraud.
The scammer also said it was imperative Ray not tell anyone, as it could jeopardize the investigation.
“They said, ‘We want to make sure that you don’t lose your life savings,’” said Ray. “So I went along with it.”
His daughter says he also complied because people who were in supposedly powerful positions were asking for his co-operation.
“He and his generation, they believe in authority,” said Jill. “If someone of authority asks them to do something, they feel they should do it.”
CIBC allows withdrawals
Ray started making cash withdrawals at various CIBC branches, where he had been a customer for decades.
At one point, a branch manager questioned his activity and froze his online bank account and ability to withdraw from an ATM. But Ray could still take out money in person, which he continued to do.
Eventually the manager at his branch in downtown Victoria wrote a letter to Ray, stating that activities on his account were “unusual” and that, in the bank’s experience, transactions requested by third parties “do not have a legitimate purpose” — but stopped short of clearly warning he was likely involved in a scam.
A manager at this CIBC branch in Victoria told Ray he was concerned about his frequent withdrawals, but did not stop him from continuing to withdraw funds.
Hearing that CIBC was raising concerns, the fraudsters cooked up a story and instructed Ray to move all his money to another bank. CIBC allowed him to do this — despite previously warning him and knowing he had been targeted by scammers just a few months earlier.
CIBC would not say why managers did not contact the bank’s fraud department or Victoria police with their concerns.
No questions from RBC
After Ray transferred all his money to RBC, the bank let him walk in every few weeks or so and obtain sizeable bank drafts — from $50,000 to $395,000 — to buy gold, per the fraudster’s latest instructions.
Not one teller at this Royal Bank branch in Victoria asked Ray a single question about why he was making frequent withdrawals over $50,000.
Not once did an RBC teller or manager ask any questions about the large withdrawals.
When someone’s doing unusual, very large withdrawals from their savings accounts, all sorts of alarms should be going off.
The scammers then sent a courier to Ray’s apartment, to pick up the gold.
When the senior finally ran out of money, a scammer posed as the chief justice of Canada and told Ray he couldn’t get his nest egg back until he paid off a fictional tax debt.
In desperation, Ray called his daughter to ask for a loan. When she demanded to know why he needed the money, he reluctantly shared details of the months-long ordeal and she realized her elderly father had been scammed.
News that it was all an intricate scheme was almost too much to bear, said Ray.
“I was devastated,” he said, lowering his head. “I trusted them.”
RBC says matter ‘resolved’
Under Bank Act regulations, banks must have policies and procedures to protect the financial interests of their customers.
If they had, this wouldn’t have happened.
Jill sent letters to both banks, detailing how they permitted scammers to victimize her father.
CIBC says it tried to “warn and protect” Ray. The bank shared a July 8, 2024 email in which a branch manager attempted to set up a meeting with Ray, who declined the invitation.
RBC took months to arrange a meeting with Ray and his daughter. The bank later told Go Public that the matter had been “resolved,” but would not confirm whether a settlement was offered. Both Ray and Jill say they are unable to comment on those discussions, which suggests they were required to sign a non-disclosure agreement.
Bank accountability critic Duff Conacher says Canada should have introduced better bank fraud protections for customers years ago. (Craig Chivers/CBC)
Conacher wonders why the scam was able to play out for six months, as banks are obligated to report suspicious transactions and transactions over $10,000 to the Financial Transactions and Reports Analysis Centre of Canada (Fintrac), which watches for proceeds of crime, money laundering and other criminal behaviour.
“There should have been follow up by Fintrac,” said Conacher. “Both the bank and Fintrac should have been stepping in and stopping this from happening.”
Neither CIBC nor RBC would tell Go Public whether Ray’s large withdrawals were ever reported to Fintrac.
No obligation
No legislation exists requiring banks to limit the liability of customers who have been victimized, says Conacher — though there are some protections for credit and debit card transactions.
He points out that countries such as the U.K. and Australia have introduced laws that could hold banks liable for failing to prevent fraud. The EU is working on enacting similar legislation next year.
“The government should be stepping in immediately and taking quick action … to protect customers,” said Conacher.
The federal government held consultations on proposed changes to the Bank Act last year that included looking at a “maximum liability threshold” for people who experience fraud — similar to credit cards, where the onus is on the bank to prove gross negligence for consumers to be liable.
Details will be outlined in the upcoming federal budget, but the government unveiled some of the changes last week — and the maximum liability threshold was not mentioned.
Conacher heavily criticized those new measures as “rehashed hot air promises” that are “much too little, much too late” and primarily voluntary.
After Jill contacted Victoria police, they set up a sting operation and managed to arrest a courier who showed up at Ray’s apartment. The family says they’ve been told charges will soon be laid.
Jill is doubtful the police will be able to recoup any of the money, but says she’s glad her father is sharing what happened to him because most victims stay silent out of embarrassment.
“I think that it’s very brave of him to tell this story,” she said. She also hopes stronger laws are coming soon to protect bank customers.
“I can’t even imagine the number of people that are falling prey to scams like this.”
Some things you can do or watch out for to avoid this happening to you.
| Fraudsters can easily pose as banks or credit unions or investigators, police, RCMP, etc…..
Be cautious: Scammers can spoof those names and phone numbers on your caller ID. Even if the call appears to be legitimate, it could be a phishing attempt. Fraudsters often state they are from a bank’s Fraud team and ask for full card details, one-time passcodes, and/or other personal details to “protect” your account. |
Here’s what you need to know: |
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Phone call
If you get a call that sounds like: “Hi, this is Mike from XXXX Bank. We found fraud on your credit card, please provide your credit card number and PIN we can start reimbursing you immediately,” do this:
- Hang up.
- Call the number on the back of your debit or credit card.
- Check your credit card activity for suspicious purchases, just in case.
Smishing text or Phishing email
If you get a message that says: “Banking alert: Please text your one-time-passcode to verify your identity,” do this:
- Do not reveal your one-time-passcode (OTP). No bank will ever ask you for this.
- Call the number on the back of your debit or credit card.
If you have elderly friends or family, please ensure you make them aware of these things. Check with them frequently to make sure nothing like this is happening. Maker sure they are educated on the matter and know to, at a minimum, call you for help!
Disclaimer:
This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.