HOME improvement scams take the number one spot on the Better Business Bureau’s (BBB) list of top scams affecting Canadians during the coronavirus (COVID-19) crisis. Canadians reported losses of over $50,000 to this scam for the period March 1 to May 31 on BBB Scam Tracker.
During these stressful times, BBB urges consumers to be on high alert to avoid losing money and exposing private information.
Below are the top scams along with tips to help identify and avoid them.
Home Improvement Scams: reported loss – $52,011
Home improvement scams can start with a knock on the door, a flyer or an ad. The contractor may offer a low price or a short timeframe. Be wary of high-pressure sales tactics, up-front fees and fly-by-night businesses. Con artists will take homeowners’ money and deliver substandard work, or no work at all. One common hook is when the scammer claims to be working in your neighbourhood on another project and has leftover supplies.
Once started, a rogue contractor may “find” issues that significantly raise the price. If you object, they threaten to walk away and leave a half-finished project. They may even accept your upfront deposit and then never return to do the job.
To avoid falling for home improvement scams:
* Say no to cash-only deals, high-pressure sales tactics, high upfront payments, handshake deals without a contract and on-site inspections. Always get a written contract where the price, materials, the responsibilities of all parties and the timeline for the job are clearly stated. The more details, the better.
* Always ask for references and check them out. If you can, get references from past customers, both older references to check on the quality of the work and newer references to make sure current employees are up to the task. Also review their business profile on bbb.org to see what other customers have experienced.
* Know the law. Work with local businesses that have proper identification, licensing and insurance. Confirm that your vendor will get related permits and make sure you know who is responsible for what according to your local laws and that your vendor is ready to comply.
Puppy Scams: reported loss – $21,820
With many people working from home, it seems like a great opportunity to bring a pet into the family. However, in many of the reports to BBB Scam Tracker, the victims came across fake advertisements on fraudulent websites for puppies that do not exist or belong to other legitimate owners and are never shipped. Victims were often told that they needed to send money for special climate-controlled crates, insurance and a (non-existent) COVID-19 vaccine. There also were several instances where the consumer wanted to see or pick up the animal but was told that was not possible due to COVID-19 restrictions.
If you are looking to add a furry friend to your family:
* Start by contacting a local shelter. Especially during this time of quarantine, many shelters are looking for fosters to help relieve the animal’s stress and reduce overcrowding at their facilities. If you absolutely wish to have a purebred animal, we suggest that you shop with local breeders. That way, you can ensure that they are in business and that the puppy actually exists.
* Try not to buy a pet without seeing it in person. Remember that your decision to bring a puppy into the home is a long-term commitment and it should begin with an authentic connection. However, if you cannot see the puppy in person, ask for references and call them. Do not send money by Western Union, MoneyGram, or through cash apps and gift cards.
Advance Fee Loans: reported loss – $20,000
Consumers should be on the lookout for advance fee loan scams, where you receive an email or phone call, or see a flyer or online ad, offering you a great deal on a car, mortgage, payday, or other type of loan. The catch is that there is some kind of upfront fee, such as a “processing fee” or insurance to get the loan or to lock in the low interest rate. Once you hand over the payment, the “lender” vanishes along with the money.
BBB is reminding consumers that requiring advance fees for loans is illegal in Canada.
* Walk away from any loan offer with vague or unclear fees charged before you get the money. There are often fees charged for loans such as application fees, appraisals and credit report fees. A real lender will post those fees prominently and collect them from the money they are lending you. A scam lender may try to collect them as a condition for you getting money.
* Legitimate lenders never guarantee a loan in advance. They will check your credit score through one of the major credit bureaus and request additional documents like proof of income and employment before providing an interest rate and/or loan amount. They will never ask you to pay an upfront fee. Fees are also never paid via unusual means such as iTunes cards, or by wiring money. Walk away from any offer that comes with guarantees and/or requires unusual payment methods. Unusual payment methods and payments to an individual are a big tip off.
* Always do your research. Lenders and loan brokers must register where they do business. To check registration in Canada, contact the Office of the Superintendent of Financial Institutions.
Fake Government Grants: reported loss – $12,550
Free government money that you never have to repay may sound extremely enticing, but this pitch is a common con used by scammers. This scam promises you free money in the form of a government grant and all you have to do is pay a one-time processing fee. Scammers typically contact victims by phone, email and posts on social media, stating that the government is awarding “free grants”. You are told that your application is guaranteed to be accepted, and you will never have to repay the money. However, many victims report that other fees will inevitably follow, and they may all seem very official. Whatever the story, one thing is certain; you will never see the money you were promised.
* Free money does not come easy. Obtaining a government grant is an involved process, and one where the grant seeker pursues the funds, not the other way around. If someone is actively soliciting you to give you money, this is a clear red flag that you are dealing with an imposter.
* Do not pay any money for a “free” government grant. If you have to pay money to claim a “free” government grant, it is not free. A real government agency will not ask you to pay an advanced processing fee.
Online Purchases: reported loss – $6,000
Online shopping continues to be a popular quarantine activity, as busy consumers take advantage of online sales and free shipping. Sometimes consumers find what they ordered is not what they get. Many ads pop up with enticing gadgets, cute merchandise or items with a subliminal “I gotta have it” message, making it hard not to at least click on it to check it out. Unfortunately, many of these companies are fraudulent retailers, with websites created in the last two to three months, targeting consumers stuck at home. After the order is placed, consumers are left with nothing or a cheap knock-off.
* Before entering any personal or financial information, ensure the site is secure. Check that the URL (web address) starts with “https://” and includes a lock icon on the purchase or shopping cart page.
* Know the advertiser. While some of the best deals are only available online, it is easy for a fake site to mimic a famous retailer’s website. Make sure you are shopping on a legitimate site. One place to start is by checking for contact information and a physical address. Also, search for the retailers on BBB.org before you shop.
Employment Scams: reported loss – $5,739
Many businesses were faced with downscaling their operations and laying off staff, leaving thousands of people job hunting. For those seeking flexible and temporary employment, be on the lookout for employment scams which may be disguised as a great new career with flexibility, especially for job seekers with children. You may be giving away personal information or money to scammers.
* Always be wary of positions that do not require special training or licensing. If the job posting is for a well-known brand, check the real company’s job page to see if the position is posted there. Look online – if the job comes up in other cities with the exact same post, it is likely a scam.
* Watch out for job offers without an interview. A real company will want to talk to a candidate before hiring to ensure they have all the right traits for the job.
* Also, do not fall for an overpayment scam. No legitimate job would ever overpay an employee and ask for money to be wired elsewhere. Be careful if a company promises you great opportunities or big income as long as you pay for coaching, training, certifications or directories.
If you have spotted a scam, even if you have not lost any money, report it to BBB.org/ScamTracker. Your report can prevent others from being victimized.