Industry Committee on Sept. 29th, 2022

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

You can go ahead now Mr. Généreux, for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

The Canadian Anti-Fraud Centre has reported that it has received over 50,000 fraud reports since the beginning of the year, amounting to estimated losses of $285 million.

But Statistics Canada believes that fraud is consistently underestimated because only 13% of offences are reported to the police.

I don't know how Statistics Canada determines that only 13% of fraud is reported, but if this percentage is accurate and represents 50,000 fraud reports and $285 million, then we're potentially talking about $1 billion extorted by fraud. Are my calculations correct? Is my estimate right?

[Ian Scott]

Yes.

I'll let Mr. Garneau answer.

[Alain Garneau]

Your estimate is accurate, if the rule of three is anything to go by.

As we said, it's not our role to obtain this information, but the figures match what we have been hearing from other law enforcement agencies. Generally speaking, only about 10% to 15% of victims complain.

As Mr. Harroun said, there are several reasons. The victims may be embarrassed or feel remorse, or perhaps have the impression that they'll never see that money again. That's why so many people don't complain. They decide to live with what happened to them, treat it as a lesson learned, and move on.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You're talking about people who are victims of fraud, not just attempted fraud. Am I correct in saying that the monetary estimate of all this fraudulent activity amounts to much more than has been reported?

We're talking about telephone fraud. Today, on the smart phones that we've had for 25 years now, we regularly get lots of text messages, which wasn't possible on landline phones.

On the basis of these numbers, are you seeing an increase in fraud attempts? You must have seen an acceleration or increase in such attempts, not only in te form of telemarketing by telephone, but also, I would imagine, via text messages. Do you deal with that as well?

[Alain Garneau]

As Mr. Scott mentioned, Canada's anti-spam legislation governs everything to do with spam, email and text messages. The CRTC also deals with it, but with a different team than mine.

To answer your question, it always amounts to the same thing. Whether the fraud attempt is by means of a telephone call or in a written text message, the goal is the same, which is to obtain someone's personal information to sell it, or to use it to defraud someone or make money from it.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Since the start of our meeting, the Canada Revenue Agency has been mentioned of number of times, including by two of my colleagues, Mr. Dong and Ms. Lapointe.

According to you, are fraudsters most frequently pretending to be from the Agency?

[Alain Garneau]

There are trends. For example, at income tax time, there is likely to be a significant increase in fraud attempts that use the Canada Revenue Agency as a cover. However, other agencies were also frequently used, such as Border Services Canada for imaginary Amazon parcels held at the border. There are all kinds of scams.

Before coming to this meeting, Mr. Scott spoke about what is called the "Mandarin scam". These were fraudulent calls that were originally only in Mandarin. Most people who answered and heard someone at the other end of the line speaking in Mandarin would usually simply hang up because it wasn't their language. The scam was clearly focused on people whose culture or language was from Asia. But Mr. Scott told us that he had received one of these calls recently, but that on this occasion he had been given the option of hearing the message in English or in Mandarin. So things have been evolving.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Harroun, since the start of the meeting, you have been referring to information and education. You said that you give talks and provide lot of education.

I'm from a remote region rather than from downtown in a Canadian city. What methods do you use to make specialists in this subject more aware? I've never seen you in La Pocatière or Rivière-du-Loup, for example. Do you make use of local or regional media.? What tools do you use to provide this type of education?

I've already seen some ads, but I can no longer remember whether they were from the CRTC. I believe that the Canada Revenue Agency had its own ads on matters like fraud.

[Ian Scott]

We are all involved. As you were saying, the Canada Revenue Agency makes its own ads. We post messages on our website, and Mr. Harroun works with entrepreneurs and businesses from everywhere. So I believe our messages are disseminated evenly across Canada.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I don't wish to offend you, Mr. Scott, but I rarely go to your website. The general population needs to be informed on more traditional media, especially elderly people, as Ms. Lapointe mentioned earlier.

I get calls from people in my riding who still have a landline at home and use neither the Internet nor a smart phone. These people need to be informed via traditional media. Is that something you still do?

[Ian Scott]

Yes.

Mr. Garneau, Would you like to add anything?

[Alain Garneau]

I'd like to go back to Mr. Harroun's explanation.

For us to consider something to qualify as telemarketing, the call has to have a business purpose. Whether the company is legitimate or not, it must offer a product or service. If the call is criminal in nature, it amounts to saying that the person is using the telecommunications network to commit a crime, which is not a part of the CRTC's mandate.

By analogy, it would amount to saying that if a person was driving a Dodge van while committing an armed robbery, the automobile dealer would be asked to do something about it. Do you get what I'm saying? When a crime is committed, even if the medium used is the telecommunications network, our mandate does not go beyond the civil level.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

What you're telling me Is that you don't consider yourselves to be responsible for telling the general population, and elderly people in particular, that there may be fraudulent activity by telephone or via text messages. Do you see what I'm saying?

Part of the population is still at risk, and I'm curious to know what percentage of the complaints to the police are by people 55 years and over. I am pretty well convinced that it's a very large number. It's a category of the population that is probably at much higher risk than young people, who are more savvy and in a better position to determine whether a call is fraudulent or not. I get calls like these just like everyone else, even if they're not in Mandarin, and I can tell the difference.

What I want to know is whether you use a special approach or particular terminology to reach these people.

[Steven Harroun]

I understand what you're aiming at, and it's what I want too.

On an airplane recently, I was speaking with an elderly woman, and I asked her if whether it might be helpful to have students discuss these things with older people, or whether some other approach of this kind could be used for people who go to a community centre and who speak neither French nor English. The goal here is prevention, and in the end, I would like all Canadians to benefit.

If I can prevent Canadians from falling victim to these things, I've done my job. It's not about an AMP. It's not about compliance. At the end of the day, it's about education if you have not fallen victim.

[Ian Scott]

Perhaps I can very briefly add something, Mr. Chairman.

Your point is well taken, and I think we can do better. We do things on public radio and so on, but you're right, and I'm taking note that using conventional media and using other vehicles to get those same messages out is a desirable thing. We can and should do better.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Généreux. I like the way you reminded us that elderly people were more vulnerable, but that savvy young people know how to recognize scams and don't answer, just as you don't. I've always thought of you as a savvy young person Mr. Généreux.

Mr. Gaheer, you now have the floor for five minutes.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

Thank you to the witnesses for making time for the committee.

I do want to underscore, for the sake of the committee, one more time how important this issue is and that it's not just nuisance calls. I know of cases from before I entered politics of seniors from ethnic backgrounds, from minority backgrounds being targeted in their native language. They were told that within an hour, they had to deposit x amount of money, and that otherwise they would lose their citizenship or lose their permanent resident card, and they actually did that. I know of one particular case in which the individual actually then committed suicide because of the embarrassment of the entire ordeal, so it's a very serious issue.

Mr. Scott, you spoke a little bit about the international co-operation that happens between your organization and your international counterparts. Do you want to elaborate a bit more? I feel as though we're bringing a lot of people into the country every single year and we need to take care of them and protect them because they're vulnerable. What is the co-operation that's happening?

[Ian Scott]

First, I want to reiterate that, as I believe you are the second member to make this point, this isn't just about nuisance, and you're absolutely right that this is very serious. The numbers the member quoted, in terms of potential amounts associated with fraud, are huge, and the societal impact is huge. That's why we are seized of this issue, so you have no disagreement from us.

What we try to do, as I said earlier, with international organizations is to share best practices, leverage our knowledge and co-operate. I'll give you a quick example. We recently signed a new memorandum of understanding with the Australian regulator, and in part that's because the frequency of these calls is now increasing in Australia. They are sometimes different in tactics, but the overall sort of patterns are similar. To the extent that we're allowed, we'll share with them information on investigative techniques, enforcement techniques and the intelligence we gather as to how to most proactively deal with it.

I'll give you a second example. The new recently named chair at the FCC and I have met twice now. One of her main areas of focus, as it was for her predecessor, is robocalls, as they tend to refer to them in the U.S. We're working together. For example, we're going to try to enhance our call tracing activities so we can identify and trace calls and say, “Okay, they're coming into Canada from the United States or from another country.” Likewise, we can work with the United States and say, “If it's coming in from the United States, where did it start?” Then we can get to the next door, so to speak. Then they are working to close those doors with their providers. So it's a combination of sharing intelligence and tactics that are working as well as identifying patterns.

The last point I'll make is that when we talk about criminal activity—and there is criminal activity in certain of these situations—then it's a question of finding the ability to pursue those matters whether in the United States or in an Asian country or wherever, because at the source, it may be in another country, and we have to get enforcement actions taken there, and that's a challenge.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

That actually feeds into my next question. I'm going on the examples that I know of. There were centres set up in Pakistan where an entire call centre is dedicated just to making fraud calls. It's turned into a money-making operation.

In the countries you've spoken about where there is co-operation, so far I think you've mentioned America and you've mentioned Australia. Is there any co-operation that happens with South Asian countries, for example?

[Ian Scott]

First of all, I wouldn't point to one particular country or another. There are many countries. The majority of telemarketing generally between Canada and the United States is across borders, not from abroad. I want to be clear: We're talking about co-operating—

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I'm sorry. The reason I bring it up is that my constituents are affected by that region. That's why I brought it up.

[Ian Scott]

I understand. I'm just always hesitant to say that there are calls coming from a particular part of the world. They come from a lot of parts. Nefarious actors can be located anywhere and use technology from anywhere, but you're quite right: There are examples there and elsewhere.

There are two different things here. We're working with like-minded agencies. Yes, we've dealt with the Indian telecoms regulator, for example. I don't know if we've had direct engagement with, for example, Pakistan's authority, but we also work within organizations such as the International Institute of Communications, which has regulators from around the world. We're hosting a meeting of them here in Ottawa in November. We raise those issues there.

There's a difference between sharing information and practices with fellow regulatory agencies and the other thing you're talking about: enforcing the law. That, we have to hand over to law enforcement agencies and the justice department to pursue and to encourage their international counterparts to pursue. That's beyond our jurisdiction and our reach, so to speak.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

As a lawyer, I do understand that the executive is in charge of enforcement. From what you're saying, it seems that the CRTC lacks teeth to go after this fully, and it's law enforcement that has to come in and get the job done. I think this question was asked before as well: Is there communication back and forth? If information is passed on about a specific complaint, do you get a report back of what happened in, let's say, a month's time, six months' time or a year?