Saving us from scams

Canada does provide safer haven for very nasty folks who target the most vulnerable…Unethical companies are freer to collude, fix prices or take a chance that misleading advertising will make cash registers, not sirens, ring. And unscrupulous telemarketers will fleece the unwary as long as no one exposes them to the acid of consumer education or shuts down their low-investment, high-return boiler-room operations.

The Toronto Star
May 13, 2003

Saving us from scams
Ottawa needs to find funds for the agency protecting Canadians — Americans — from con artists
James Travers

It is not hard to spot those rags in the wash graying the image of the Great White North.

Topping the pile is the decision not to send troops to Iraq. And not far below is SARS, a nasty infection that spread easily to tourism and to Toronto's priceless reputation as a safe place to visit.

But dig a little deeper in the dirty laundry and find something easily missed. Across America, consumers are constantly told their neighbours can't be trusted.

Guess what? This time our continental cousins have a point.

Canada does provide safer haven for very nasty folks who target the most vulnerable. Up to 1,000 fluidly mobile, back-alley clever and startlingly profitable telemarketers are electronically crossing the 49th parallel to suck more than $70 million annually out of the pockets of the old, avaricious and gullible.

Some operators are so sophisticated they sting twice.

In one case an understandably anonymous elderly Cleveland woman was scammed a second time when she was told lost life savings could be recovered by paying $3,000 court costs on a judgment against those who originally conned $175,000 from her.

None of this is breaking news.

In April, 1997, Jean Chrétien and then U.S. president Bill Clinton announced a crackdown. Task forces on both sides of the border are now more aggressively targeting crooked businesses.

What is new and worrying is that one of the front-line organizations fighting phone fraud is starving for funds. It is the Federal Competition Bureau, an Industry Canada orphan trying to survive on scraps.

Unless the Chrétien government quickly finds what amounts to loose change, a bureau that already has far fewer resources than its international counterparts will see its budget tumble from a 2002 high of $45.4 million to $34.2 million next year.

As everyone from the Organization for Economic Co-operation and Development to Parliament's standing committee on industry, science and technology agrees, that isn't nearly enough.

Konrad von Finckenstein, the highly respected, wonderfully dower commissioner, refuses to point fingers.

All he says is that the cut will eliminate 50 of 380 jobs from an operation that is already buckling under the weight of mergers, rapidly changing business practices and a borderless economy.

For his part, Industry Minister Allan Rock shares the consensus that help is needed but says the $3 million already found is all that can be spared.

Giving more would compromise other industry programs and scrounging for new funds is tough at a time when Finance Minister John Manley and the Treasury Board are reallocating $1 billion from existing programs to new priorities.

That's true. But the truth also obscures too-typical Ottawa realities.

Shortening the leash on a watchdog is a relatively low-risk exercise. Most voters and taxpayers are vague about what the bureau does and whom it protects. Even more germane, politicians have little to gain when it successfully hounds the private sector.

What's missing is a champion for interests that are remarkably similar to public interests.

The bureau needs someone who will explain forcefully how consumers are more easily gouged when money and staff are stripped from one of the few federal organizations providing protection.

Unethical companies are freer to collude, fix prices or take a chance that misleading advertising will make cash registers, not sirens, ring. And unscrupulous telemarketers will fleece the unwary as long as no one exposes them to the acid of consumer education or shuts down their low-investment, high-return boiler-room operations.

The good news is that this is one of those rare problems that can easily be fixed.

A government that spends $134 billion annually on programs should be able to find the few missing millions that will let the bureau hold the line, if not tackle its growing backlog.

Longer term, the next government should give the bureau the added independence it needs.

Far from heretical, creating an arm's-length agency would remove lingering concerns that those employed to protect the public are somehow beholden to their political masters. It would also allow the commissioner to lobby for an adequate budget at higher levels than the minister and the deputy.

These changes are urgently required for the same reasons the bureau is overworked.

The global village is now more than a mirage and being a conscientious villager carries certain costs.

Those costs can either be paid up front where they do the most good or later when the currency changes from taxpayers' dollars to a country's damaged reputation. It's Ottawa's choice.

James Travers is a national affairs writer. His column appears Tuesday, Thursday and Saturday. ac.ratseht|srevartj#ac.ratseht|srevartj.


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