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Researchers at Queen's have developed an algorithim designed to detect fraud in corporate statements filed to regulators.

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One in five Canadians have been victims of an online or telephone marketing scam – a fate that could have avoided by simply reading the fine print or recognizing the red flags, according to Visa Canada.

The credit card giant's second annual deceptive marketing practices survey of 1,000 Canadians, released this week, found that 61 per cent of consumers made purchases online or over the phone in the last 12 months. But it also found that 27 per cent of respondents said they didn't bother to read the "terms and conditions of sale" and almost half only read a portion.

That's the fine print or the stuff after the asterisk – the aptly named tiny star sometimes utilized to mislead online consumers.

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Michael D'Sa, head of payment system security at Visa, said that when online consumers don't read everything before pressing send, they might end up paying for things they don't want when a free trial ends or by failing to un-check pre-checked boxes. Complicated return and delivery policies might also stick consumers with purchases they didn't expect.

"Legitimate merchants are not doing anything fraudulent, they are just sly and deceptive in nature," Mr. D'Sa said.

Unsolicited telephone offers are a different beast and are more likely to fall into the category of pure, illegal scam. Consumers should be leery if a caller out of the blue starts asking for personal or financial information.

"I would not provide any information to anybody that I didn't ask to be called by," Mr. D'Sa said.

At the Canadian Anti-Fraud Centre, which is the agency in charge of investigating mass marketing schemes nationwide, officials are routinely stunned at how easily people are duped – and how easily they could have avoided it.

"It's going to take some time if you're going to be a wise informed shopper," said RCMP Staff Sergeant Paul Proulx of the centre.

Sgt. Proulx said providing personal details to unsolicited callers happens quite frequently and he blames it partly on the ingrained politeness of being Canadian.

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"They are always willing to share information. It's the culture," he said.

The centre reported $53.8-million was diverted in fraud schemes last year and while it receives 300,000 complaints annually (about 20 per cent from consumers in the United States), only about half are investigated due to limited staffing, Sgt. Proulx said. But the problem is probably even larger, since only an estimated 1 to 5 per cent of the people who believe they are scam victims actually contact the centre, he added.

"Most people are ashamed or the amount isn't large enough or [they think]the police won't do anything about it or [they think]I was foolish and I learned my lesson and I'll take my hit and won't do it again," Sgt. Proulx said.

People over the age of 50 are targeted most often, particularly the elderly, but the dollar loss is greatest among people in their forties, he added.

Visa did glean some good news from its survey. Ninety-four per cent of Canadian credit card holders review their monthly statements for unauthorized charges, up from 91 per cent a year ago.

To help protect yourself from scams visit this site.

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But education and awareness is the key to outwit the fraud business, officials say

"There's always something new," Sgt. Proulx said, "It's alive and well."

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About the Author
Dawn Walton

Dawn Walton has been based in Calgary for The Globe and Mail since 2000. Before leaving Toronto to head West, she won a National Newspaper Award and was twice nominated for the Michener Award for her work with the Report on Business. More

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