Your Personal Finances

Consumer Alert

Watch out for any get-rich-quick opportunity that comes your way.

One very old scam that is still around and in fact continues to snag victims is the Nigerian Scam letter. These scams have been around for decades. But despite the media and police warnings, Canadians are still falling for them. According to the OPP/RCMP Anti-fraud call centre PhoneBusters 195 Canadian victims lost $3 million in 2006, 170 victims lost $5.5 million in 2007 and even in 2008 there was104 victims who lost $3 million.

This scam is the case study for the staying "If it sounds too good to be true, it is."

So how does it work? Usually you receive an email requesting an urgent business transaction - usually the transfer of millions of dollars. Typically the letter is from someone in Western Africa, usually Nigeria, but recently I received an email from someone in London purporting to represent the "richest man in Russia." The letter usually stresses confidentiality and urgency, trying to make the reader believe the pitch. They usually say they are trying to get money out of the country and they would pay you a percentage of that money if you could help them. For example, my Russian email said I would receive 35% of the $20 million involved, with 10% going to charity – nice touch! A Nigerian email said I would receive 30% of $14 million. The senders of these emails usually claim to be a Doctor or high-ranking government official. If you respond to the email, you are asked for a processing fee. And, unfortunately, many people actually send them money.

It seems so obvious that these are scams but some people are desperate to believe this is their ticket to a good life. If you have any doubts about any kind of investment, consult your financial advisor. Your advisor will be able to provide guidance on what is a real opportunity and what is a scam. For more information on these scams visit www.phonebusters.com

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