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Viewing cable 06MONTREAL255, MONTREAL-BASED TELEMARKETING SCHEMES TARGET
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
06MONTREAL255 | 2006-03-01 20:26 | 2011-04-28 00:00 | UNCLASSIFIED | Consulate Montreal |
VZCZCXRO5335
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHMT #0255/01 0602026
ZNR UUUUU ZZH
R 012026Z MAR 06 ZDK
FM AMCONSUL MONTREAL
TO RUEHC/SECSTATE WASHDC 9387
INFO RUCNCAN/ALCAN COLLECTIVE
UNCLAS SECTION 01 OF 03 MONTREAL 000255
SIPDIS
SIPDIS
E.O. 12958: N/A
TAGS: KCRM PREL ECON CASC CA
SUBJECT: MONTREAL-BASED TELEMARKETING SCHEMES TARGET
AMCITS
MONTREAL 00000255 001.2 OF 003
This message is Sensitive but Unclassified
¶1. (U) Summary. Montreal's relatively cheap labor and
energy costs combined with strict privacy laws and lax
telemarketing regulations have made it an attractive
location for contact centers of all kinds, and the city
now finds itself second only to Toronto for the dubious
title of "telemarketing scam capital of North America."
Fraudulent telemarketing operations based in Canada
cause an estimated annual loss of $700 million and
frequently target elderly U.S. Citizens. Project COLT
brings together Canadian and U.S. law enforcement
officials to identify and dismantle fraudulent call
centers and return funds to telemarketing victims. End
Summary.
--------------------------------
Attractive short-term employment
--------------------------------
¶2. (U) Help wanted adds in Montreal newspapers are
dominated by announcements of job openings in
telemarketing, and many students turn to these as a
source of quick income. Call center employment tends
to have an extremely high turnover rate, and legal and
illegal call center operations are constantly seeking
new employees. "Students welcome," reads one ad,
"Instant verifications. Eight positions to fill." Many
English-speaking immigrants, who may find that their
previous job competencies are not recognized in Quebec,
or that their lack of French language skills
disqualifies them for many jobs, often turn to
telemarketing as a last resort. These advertisements
tend to lead job seekers to a "boiler room," an office
building crammed with computers and phones, on which
telemarketers peddle their virtual wares, frequently to
U.S. citizens.
---------------------------------------
Collecting names. and making the "pitch"
---------------------------------------
¶3. (U) So called "leads brokers" compile lists of the
names, addresses, telephone numbers (and, frequently,
bank account information) of U.S. residents. These
"leads lists" vary in price depending on the amount of
information contained on each potential target, with
the most expensive lists containing bank and credit
card information as well as other personal data about
those listed. Leads brokers sometimes compile these
lists by placing generic ads at the back of U.S.
magazines (with captions such as "International
Lottery: Enter Now") asking readers to submit their
name, address, and phone number. Leads brokers then
sell these lists to telemarketers who call those listed
and, with a variety of pitching techniques, tell
customers that they have won a lottery or some other
prize.
¶4. (U) Often, illegal telemarketers choose to aim
their "pitch" at elderly U.S. citizens, who may be less
likely to question the information given by the
telemarketer. In some instances, the telemarketer will
tell the U.S. citizen that they have won an
international lottery or some other prize that requires
"customs clearance" before it can reach them. The
telemarketer requests that the target send a certain
amount of money (via Western Union) to a particular
address, promising that the cash prize or boat will be
delivered to the person shortly thereafter. Once the
target has sent in their money, and does not receive
any prize, they may try to follow-up on their payment.
But in most (if not all) cases, the money has already
been picked up by someone involved in the scheme and it
is already to late to recover the funds.
¶5. (U) A telemarketing scheme relies on distinct but
interlinked agents to complete different aspects of the
transaction. For many of these illegal telemarketing
schemes, each of the actors other than the Montreal-
based call center is located in the U.S. From the
leads brokers compiling the lists of potential victims
to the actual telemarketers on phones pitching their
services, to the brokers who close the deals and take
bank or other payment information, to the "third party
processors" who actually take the money out of people's
accounts, the multiple layers of action makes it much
harder for law enforcers to point blame. Like a
"circle with spokes" each part of the telemarketing
scheme feeds off the others and is required for the
process to finish. And yet the members of each
particular group can claim a certain amount of
MONTREAL 00000255 002.2 OF 003
ignorance as to the ultimate impact of their actions.
And, in many cases (according to post law enforcement
officials) the individuals working the phones in a
telemarketing outfit might not even recognize that they
are part of an illegal scheme.
---------------------------------------
"You have won an international lottery"
---------------------------------------
¶6. (U) In some cases, telemarketers take on the
identity of U.S. attorneys and call people who have
already been victims of telemarketing schemes that they
can help them "recover the money" that they have
lost-for a fee. In other cases, call centers will
target people with bad credit and offer them credit
cards or loans with the stipulation that the victim
must first supply bank information or check information
in order to qualify for the loan or credit card. Other
telemarketers will use the names of well-known
charities or pretend to be raising money for police or
firefighter organizations in order to solicit funds
from victims. They may also claim to be investors
seeking funds for "lucrative" real estate or banking
programs or offer a "renewal" of an existing magazine
subscription.
¶7. (SBU) Some people have called telemarketing
schemes like these the "ultimate transborder crime"
because of how mobile the call centers themselves are,
and how well the telemarketing companies themselves are
able to insulate themselves from blame. The fact that
telemarketing is a multi-jurisdictional crime that can
elicit attention from multiple levels of government and
multiple law enforcement agencies can also make it
harder to U.S. officials to track which agency has
collected which documents from different telemarketing
operations to act as evidence in a court case. One
telemarketing operation might elicit attention from the
office of ICE, the FBI, the US Postal Service, the
Federal Trade Commission, the Secret Service, and the
State Attorney General's Office.
-------------------------
Montreal-based Operations
-------------------------
¶8. (SBU) In general, according to law enforcement
officials at post, organized crime groups (including
the outlaw motorcycle gang, Hells Angels) have a hand
in running the larger telemarketing call centers in
Montreal. The telemarketing call center structures run
from the largest and most well-organized with more than
30 employees, to looser networks of individuals on cell
phones connected only by a hierarchy of anonymity in
which each employee only knows the person directly
above him or her in the hierarchy, to the single agent
with a cellphone making calls on his or her own and
collecting money by Western Union or cash.
¶9. (SBU) The differences between U.S. and Canadian
privacy laws and labor costs can help explain why many
telemarketing schemes would choose to locate their call
center operations in Montreal. Quebec is a relatively
liberal province when compared to the rest of Canada
and has strict privacy laws that make it difficult for
Canadian law enforcement officials to get access to an
individual's subscriber information (information that
is more easily obtained in the U.S. and that can be
used as evidence against alleged telemarketers). In
the US, telemarketing scammers can be charged with mail
fraud, wire fraud, and money laundering. In Quebec
regulations are significantly more lax. The Royal
Canadian Mounted Police (RCMP) has the mandate within
Canada to pursue illegal telemarketers, but in many
cases lacks the resources to pursue and convict suspect
operations.
---------------------------------------
US-Canadian law enforcement cooperation
---------------------------------------
¶10. (U) ProQ Colt started in 1998 as collaboration
between U.S. law enforcement and RCMP officers
targeting illegal telemarketing operations. The task
force brings together ICE Special Agents, the FBI and
the U.S. Postal Inspection Service with the RCMP,
Suret du Quebec, and the Service de Police de la Ville
the Montreal (SPVM). The U.S. Consulate in Montreal
has a Special Agent from ICE dedicated full-time to
working with RCMP officials to identify and disrupt
illegal telemarketing schemes in Montreal. In 2005,
MONTREAL 00000255 003.2 OF 003
project COLT received 1026 complaints from victims of
these phone scams and led to the arrest of 42 persons
in the U.S. and Canada. Since its inception Project
Colt has resulted in the return of more than $15
million to U.S. and Canadian victims.
MARSHALL