By Charles Lefebvre

Police continue to warn residents about frauds and scams

Jan 19, 2018 | 4:42 PM

MEDICINE HAT, AB — The Medicine Hat Police Service is reminding residents to be vigilant after recent reports of a new scam operating in the city.

On Thursday, police put out the second news release about the “gifting circle” scam, which they say has been spotted in the city.

“It just recently, before Christmas, began showing up in Medicine Hat,” said Constable Kurtis LaDouceur, fraud investigator with the Medicine Hat Police Service’s Major Crimes Unit.

The scam sees a recruiter asking eight victims to pay a “gift” of $5,000 to the recruiter, who then leaves with the $40,000. The next level must then recruit another eight people to pay $5,000 each.

If the process continues, everyone would make $40,000, and after just seven levels, more than $2.5 million is paid by victims.

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The model inevitably collapses, and typically, the recruiter will leave with the initial $40,000 and go to a new territory to defraud another victims. Since there is no legitimate project or service, the model is considered a pyramid scheme, which is illegal in Canada.

“It’s not that common, because it relies on the fraudster meeting with people,” said LaDouceur. “A lot of the frauds are over telephone and the internet. This is a large-scale fraud involving quite a bit of money, and they need to meet with people.

LaDouceur adds another thing that makes the fraud unique is the recruiting, noting many victims will recruit friends and family, who they know and trust.

“That’s why it’s so hard to identify and warn people about this scam, because it’s not initially coming from the fraudster, it’s coming from friends and family,” he said.

LaDouceur declined to say if anyone from Medicine Hat was a victim of the scam, but noted “several concerned citizens” made police aware of the scam operating in the city. He adds fraudsters are skilled at social engineering to take advantage of their victims.

“They can talk and they can sell, and it’s on no fault of the victim, but if you get a fraudster, and they can read the person, use social engineering to find out what to say and how to say it at any given time to take advantage of anybody,” he said.

“I can’t repeat myself enough, but it is not the fault of the victim. There’s a lot of onus on the victim, and that’s not right. These people do it until they get a bite, and they’re relentless. Everybody knows somebody whose fallen for a scam at one time or another.

With the gifting scam, the Canada Revenue Agency Scam and other frauds, LaDouceur says frauds operate on a continuous basis in Medicine Hat, and he’s reminding residents to always ask questions, especially in regards to easy money ventures.

“If you receive a link for banking or a phone number, don’t just trust that phone number or link, find that phone number and find that link yourself,” he said.

Anyone with questions or concerns can contact the MHPS at 403-529-8481.