Crackdown in Mumbai has Big Impact on CRA Tax Scam

October 20, 2016

Vancouver, BC – A recent bust of a call centre in Mumbai, India seems to have led to a dramatic drop in the dreaded Canada Revenue Agency Tax Scam. The scam took the top spot in this year’s National Top 10 Scams list and BBB is pleased to see the impact the raid in India appears to be having.

“This scam has affected just about everyone at one time or another,” says Evan Kelly, Senior Communications Advisor for BBB serving Mainland BC. “Fortunately this scam wasn’t the leader in terms of loss, but almost everyone I’ve talked to say they received those dreaded and threatening calls, sometimes in the middle of the night.”

At the beginning of October, Mumbai police arrested 70 people and are questioning hundreds more who were part of a call centre targeting North Americans. The perpetrators bilked millions of dollars from unsuspecting victims in Canada and the US and has been a growing problem for several years.

The number of complaints have gone way down.

For the week of Oct. 3 to Oct. 9, the Canadian Anti-Fraud Centre received 358 complaints, but for the week following the bust in India, the number of complaints dropped to just 25.

“By all accounts, the reports on BBB’s Scam Tracker have also slowed. This is great news for Canadians. We heard that it had a big impact on the similar IRS scam in the US and were hoping the same would happen here. Turns out that’s exactly what is happening,” adds Kelly. “Hopefully this continues and isn’t just the tip of an iceberg.”

How the Scam Works:

These scams are most often perpetrated by phone and take two basic forms. In the first version, the CRA "agent" says you owe back taxes and pressures you into paying by prepaid VISA card or wire transfer. If you don’t comply, the scammer threatens you with arrest, fines, or deportation. In the other version, scammers claim they are issuing tax refunds and will ask you for personal information under the guise of transferring a refund. This information can later be used for identity theft. 

These imposters often go to great lengths to appear credible. The scammer may provide a fake badge number and name. Your caller ID will often indicate that the call is coming from Ottawa or a reputable police agency. In many instances, these scams are initiated with a very serious and official sounding “robocall” recording.

Tips to Spot This Scam: 

  • You are pressured to act immediately. Scammers typically try to push you into action before you have had time to think. The CRA will give you the chance to ask questions or appeal what you owe, and their first contact with you will always be by mail, not phone or email. 
  • Payment must be made by wire transfer, prepaid debit card, or other non-traditional payment methods. These methods are largely untraceable and non-reversible. The CRA will never demand these forms of payment.
  • The CRA does not send out “robocalls.” If you get one, just ignore it.
  • The CRA will never solicit personal information over the phone or online.

The Council of Better Business Bureaus Press Release is available here.