Beware Canadian scams

Tips for Consumers:

Posted: Thursday, June 13, 2002

Better Business Bureaus in Canada report that American consumers are being targeted by several scams operating out of Canada.

Advance-fee loan brokers are placing classified ads and using telemarketers to promise consumers and businesses guaranteed, low-interest loans to pay off debts or clean up credit records. The "brokers" charge a fee up front to find a lender and offer oral promises that the fee will be refunded if the loan application is unsuccessful.

No applicants are known to have actually received loans from Canadian "brokers." Consumers report that their loan applications are rejected, and no refunds are provided. The companies defend this "no refunds" policy by claiming to be "credit referral agencies" and not loan brokers.

The BBB warns U.S. consumers to deal with established, local financial institutions or businesses with proven track records when seeking loans; to get references; and to check the company's record with the BBB.

Another scam involves the sale of offshore lottery tickets. Complaints from U.S. consumers allege unauthorized, continuing credit card and checking account debits or transactions, misrepresentation involving winnings, high-pressure sales tactics over the telephone, and threats of collection when they stop playing the lotteries.

Consumers are contacted initially through the mail via direct marketing, and telephone contact is made once the consumer places an order. American consumers should be aware that selling or purchasing foreign lottery tickets through the U.S. mail is illegal.

The BBB has no evidence that any foreign lottery tickets have ever been purchased on a consumer's behalf. Americans who wish to participate in a lottery should shop locally or within their state, where purchases and winnings can be verified.

Canadian "telesharks" are also busy peddling fraudulent sweepstakes and prize offers to Americans. Fraudulent telemarketers are offering bogus prizes such as boats, diamond jewelry, or cash to victims who agree to purchase other items; prepay taxes, shipping and handling charges; or transfer fees to receive the prize.

Don't fall for any prize offer, from anywhere, that requires up-front money, and never give out a credit card or checking account number to collect a prize or enter a sweepstakes. Reputable sweepstakes companies notify winners by mail or by courier and do not require a fee of any kind.

Al Tobin is the CEO of the Better Business Bureau of Alaska Inc. He can be contacted via e-mail at

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