Instead of tricking victims into sending money, some organized crime groups have moved into advanced malware and are taking control of devices and accounts, then draining them.Rafa Jodar/iStockPhoto / Getty Images
Jeremy Douglas is the deputy director of operations of the United Nations Office on Drugs and Crime (UNODC) and former UNODC chief of staff and strategy adviser.
Vern White is a retired senator who served as a member of the National Security and Intelligence Committee of Parliamentarians, as chief of police in Ottawa and Durham region, and as assistant commissioner of the RCMP.
Scams and fraud have exploded worldwide.
In Toronto, one couple lost $50,000 in a single hour earlier this year, and all it took was a convincing e-mail, a follow‑up phone call, and a moment of urgency. By the time they reached their bank, the money was gone. In Victoria, a retiree on a fixed income lost $30,000 on a fake investment they believed was legitimate until they needed to withdraw some funds.
Cases like these are on the rise from coast to coast, leaving a growing trail of victims of an increasingly sophisticated form of organized crime. Fraud is an industry at this point, and with global losses linked to online fraud surging to the hundreds of billions of dollars annually, it is expanding and evolving in ways that make it increasingly difficult to counter.
What has changed is not only the volume of scams, but their complexity. The operations targeting Canadians today are not lone actors sending clumsy phishing e-mails; they are large‑scale organized criminal enterprises running co-ordinated fraud schemes around the clock, mainly based overseas in regions and countries where Canada’s capacity to respond is limited. These networks combine advanced techniques, artificial intelligence and psychological manipulation. They are designed to extract money quickly and efficiently. And increasingly, they are focusing on Canada.
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Instead of tricking victims into sending money or making investments, some organized crime groups have even moved into advanced malware and are taking control of devices and accounts, then draining them. To get victims to engage, download a software or interact with a website, messages and calls appear to come from trusted institutions, including banks, government and tax authorities, even law enforcement. Victims are told their accounts are at risk and are pressed to act immediately.
Once victims engage with a front website or a link sent from what they believe is a legitimate source, malicious software is installed, which then accesses contacts, e-mails, messages, banking information, photos and passwords. Accounts can be drained in minutes.
AI is accelerating this threat, making scripts, interfaces and interactions more convincing. Responses are instant and realistic. Scams that once unfolded over days now happen in hours.
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The government, financial institutions and tech companies are taking steps to confront this new reality, but the overall response remains uneven and fragmented. One recent example illustrates the challenge: A major Canadian bank recently contacted some customers to verify and update information, and while the correspondence and the number were legitimate, it was almost indistinguishable from a scam. Had it been fraudulent, the damage could have been immediate and severe.
This is the environment Canadians now face: Legitimate communications look suspicious, and scams look legitimate. Individuals cannot navigate this alone.
Canada has been caught in the crosshairs of organized crime in the recent past, with devastating results. The drug trade was disrupted almost overnight by fentanyl, with Canada among the countries caught on the back foot and watching helplessly as countless citizens were lost to addiction. And as different as the drug trade is, there are lessons that can be applied in the response to scams.
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First and foremost, large‑scale and sophisticated fraud must be treated as a public safety and security priority. Practically, Canada needs to expand international co-operation to take on organized crime networks that operate overseas, and it needs better and faster information-gathering and intelligence-sharing between banks, police and tech companies. This needs to be coupled up with a co-ordinated prevention effort that educates Canadians about the risks they face.
While fraud and fentanyl are different issues, Canada also needed some similar things – international co-operation, private-sector collaboration, prevention – to be successful against fentanyl. But the largely reactive and fragmented approach, much of it based on what may have worked against the traditional drug trade, meant that this was often too little, too late.
Without a co-ordinated and aggressive response, organized fraud will continue to evolve and accelerate, and at some point Canada will not be able to get ahead of the challenge. It happened with the opioid crisis – and it cannot be allowed to happen again.