Newsroom

Hang up on phone scam

OFT warns consumers about 'Canadian lottery' scam

156/03    3 December 2003

Consumers have lost thousands of pounds as they are targeted by a deceptive telephone marketing scam hitting the UK. The OFT has today launched a new campaign to warn consumers about the dangers of the 'Canadian lottery' scam.

The OFT is urging people not to respond to telephone calls asking them to send money to claim 'winnings' from the Canadian National Lottery or any other overseas lottery programme.

Thousands of consumers have already been affected by the scam with victims in the UK reportedly losing around £3 million in the first six months of this year alone.

The scam starts when people respond to mailings or telephone calls telling them they are being entered in a national lottery or some other prize draw, often from Canada, Australia or Spain. They then receive a phone call congratulating them on winning the 'big prize'. However, before they can claim the prize, victims are told they must send money to pay for taxes and processing fees. Often these calls are repeated and further sums are sent. Consumers have lost thousands of pounds through such schemes. The prize doesn't exist, and they never receive any winnings in return for their cash.

Anybody can receive an unsolicited call but the elderly are particularly at risk, with over 80 per cent of those affected aged more than 65 years. In many cases the caller tries to befriend the victim showing an interest in their family and friends; they may also pose as a government official, customs officer or lawyer. Evidence shows that most victims do not report the crime through embarrassment or fear that they may lose control of their finances because of their age.

The OFT has seen a large increase in the number of calls it receives about callers claiming to be associated with a Canadian national lottery. There have been more than 300 complaints since August. There are at least 15 call centres in Canada solely targeting the UK. One centre is already known to have defrauded UK consumers of around £450,000.

The OFT is working closely with the Canadian authorities (see note 4) to take action against the fraudsters. The Canadian authorities have already arrested over 50 people, closing down call centres and intercepting maildrops.

The OFT has set-up a telephone hotline to collect evidence which the Canadian authorities can use to prosecute the fraudsters. Anybody who has received a phone call and/or sent money to people claiming to be associated with the Canadian national lottery can call the hotline to give their evidence and help put a stop to the scam. The number is: 020 7211 8111.

Penny Boys, OFT Executive Director, comments:

'This is a professionally organised operation and the people involved are very persuasive. Our campaign aims to alert consumers to the need for caution when responding to unsolicited mailings and phone calls.'

The OFT advises consumers:

• if you have doubts about a caller – hang-up
• never send any money in order to receive a prize
• never give out private financial information
• Canada does not have a national lottery (see note 5)
• if it sounds too good to be true, it probably is.
  

NOTES

1. A new gateway for disclosure to overseas public authorities under Enterprise Act 2002 (Section 243) has made it easier for the OFT to work with overseas counterparts by enabling the sharing of information which will allow civil proceedings and the investigation of crime.

2. The OFT will be holding an emergency summit with a number of consumer organisations and those who represent the interests of senior citizens such as Age Concern and Help the Aged.

3. The OFT is also coordinating the response from UK law enforcement agencies including the Metropolitan Police, National Criminal Intelligence Service, The Royal Mounted Canadian Police, Interpol and trading standards.

4. The OFT is working with the Royal Mounted Canadian Police, the Competition Bureau of Canada, Phonebusters, the Ontario Provincial Police, the Toronto Police, Ontario Ministry of Consumer and Business Services and the Attorney General's Office for British Colombia.

5. Canada does not have a state backed national lottery. Super Sevens and the 6/49 are legitimate private lotteries which operate nationally in Canada, neither is state funded and the calls do not emanate from them.

ANNEXE

Case Studies

a. Mr J received a phone call from a representative of the First National British Holdings in Canada and was told he had won £225,000 on the Canadian National Lottery. The caller told him that under Canadian Law he was required to pay a tax of 1per cent of the winnings, £2,250.  Mr J then received a series of calls from individuals who claimed to be Canadian and UK customs officials, lawyers and file administrators.  He sent six further payments for customs fees, insurance levies, and legal release fees due to the series of convincing calls which included claims that First National British Holdings had gone into administration. By the time Mr J received a call claiming to be from UK Customs, asking for £2,000 he felt he couldn't afford to cut his losses and sent the money.

Mr J lost £18,750 in total. He did not contact UK or Canadian authorities but was tracked through material seized in an arrest in Toronto.

b. Ms T received a call from a representative of Global Call Centre stating that he knew a guaranteed way of winning the Canadian Lottery.  The caller said that all Ms T had to do was forward a cheque for £49.00 to an address in Vancouver.  Within a month of this contact Ms T received a series of telephone calls asking her to send money to pay for the tax on her winnings.  She sent a total of approximately £200 in tax payments but has never received any form of prize.

c. Mr N received a call from the 'Head of the Legal Department' and was told he had won £250,000; he would just need to send a 1.5 per cent tax of £3,750 to the Toronto Authorities.  Within a month he had received another call claiming the tax was also payable to the Vancouver Authorities and he would need to send a further £3,750.  Mr N never saw his prize but he did receive more calls from an individual claiming he had won £250,000; again the release of this prize was subject to a £3,750 payment for tax.

d. Mrs K received a number of different phone calls claiming she had won between £4,500 and £135,000.  The callers claimed to be from Canada and Australia and she sent a number of payments of between £60 and £2,000 for taxes and release fees.  She never received any prize.  

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