4 Common Types of Financial Fraud that Requires Legal Representation

At a high level, financial fraud happens when someone deprives you of access to your own money or capital. Financial fraud can also be when a person or entity intentionally deceives you or misleads you in a way that negatively affects your financial health. Today, fraud is more common than ever, as fraudsters have more ways to target people in Ontario. In 2023, the Royal Canadian Mounted Police (RCMP) reported that financial fraud in Canada had reached record highs, increasing 40% from 2021 to 2022. Despite the historically high levels of fraud, the Canadian Anti-Fraud Centre estimates that only about 5 to 10% of fraud was actually reported. In many cases, financial fraud can leave you feeling stressed, overwhelmed, and often hopeless. But that doesn't have to be the case. By understanding how you can become affected by fraud and filing a civil suit, you can seek justice with a trusted civil litigation lawyer. At Karrass Law, our team is experienced with financial fraud and can provide you with tailored legal advice that allows you to recover financial losses and hold fraudsters accountable.

Here are four types of common financial schemes that Ontarians may fall victim to and how your civil lawyer can help. 

Mortgage Fraud

Mortgage fraud occurs when someone deliberately falsifies facts and information on an application. Designed to mislead lenders by providing an inaccurate representation of who the borrower is, their property value, or their income, mortgage fraud can be damaging and lead to serious consequences in Ontario. Mortgage fraud can be committed with or without the knowledge of the home-buying team. If you have found yourself caught up in mortgage fraud, contact an experienced civil fraud lawyer right away. At Karrass Law, our experts will help you understand the situation, providing you with tailored legal advice. 

How Mortgage Fraud Occurs:

• Inflated Appraisals: Fraudsters artificially increase the value of a property to secure a larger loan.
• Income Misrepresentation: Borrowers falsify income details to qualify for loans they cannot afford.
• Fraudulent Documentation: Fake documents are used to mislead lenders about the borrower's financial situation.

Signs of mortgage fraud include fabrication of paperwork, omissions of information, incorrect information in applications, mortgage amounts that are too good to be true, a lack of communication, upfront payments, cash fees, or pressure to sign paperwork. If you recognize these signs, take caution and talk to our experts at Karrass Law. 

Ponzi Schemes

Ponzi schemes are fraudulent investment operations where returns to investors are paid from the contributions of newer investors rather than from profit earned by a legitimate business operation. At the start, Ponzi schemes maintain the illusion of a profitable and viable business, attracting more investors and sustaining the scheme temporarily. In virtually all cases, the lack of cash flow causes all Ponzi schemes to inevitably collapse in and on themselves. Ponzi schemes are an incredibly common type of financial fraud. If you have been a victim of a Ponzi scheme and would like to take legal action with a civil suit, contact our civil lawyers at Karrass Law. 

How Ponzi Schemes Occur:

• Promises of High Returns with Low Risk: Perpetrators attract investors by promising unusually high returns with minimal risk.
• Overly Consistent Returns: Regardless of market conditions, returns are always consistent, raising suspicion.
• Lack of Transparency: Difficulty in understanding how the investments generate returns and reluctance to provide detailed information about the business operations.

If you suspect you have fallen victim to a Ponzi scheme, it is crucial to seek legal advice from a civil fraud lawyer. At Karrass Law, our civil lawyers in Toronto can help you understand your rights, gather evidence, and file a lawsuit to recover your losses. As experienced civil lawyers specializing in financial fraud, we can provide the tailored legal advice you need to navigate this complex situation.

Credit Card Fraud

Credit card fraud occurs when someone unlawfully accesses and uses another person's credit card details to make purchases or cash withdrawals. This kind of fraud can lead to considerable financial loss and severely impact the victim's credit rating. It can take several forms and often leaves victims feeling vulnerable and stressed as they work to resolve unauthorized transactions and restore their financial health from actual money to their credit score.

How Credit Card Fraud Occurs:

• Skimming: Fraudsters use devices to capture credit card information during legitimate transactions.
• Phishing: Scammers trick individuals into providing their credit card details through fake emails or websites.
• Account Takeover: Fraudsters gain access to a person's credit card account and make unauthorized transactions.

Dealing with the aftermath of credit card fraud can be daunting. A civil litigation lawyer can assist in disputing unauthorized charges and negotiating with credit card companies. Legal advice is crucial in navigating these disputes and ensuring that your financial interests are protected. If you fall victim to credit card fraud, consulting with a civil fraud lawyer at Karrass Law is essential.

Pyramid Schemes

Pyramid schemes involve recruiting members who pay to join, with returns generated from the recruitment fees of subsequent participants. Pyramid schemes can be mixed up with Multi-level marketing and Ponzi schemes. However, pyramid schemes rely heavily on recruitment to drive profits rather than the sale of a legitimate product. Because pyramid schemes depend on heavy financial investments from newcomers, they are unsustainable and eventually fall apart, leaving most participants with significant financial losses.

Recognizing Pyramid Schemes:

• Emphasis on recruiting new members rather than selling a legitimate product or service.
• Promises of high returns based on recruitment.
• Complex and opaque structures make it difficult to understand the business model.

If you have been caught in a pyramid scheme, it is essential to seek legal advice immediately. A civil lawyer can help you understand your options, file a lawsuit, and recover your losses. Karrass Law's team of civil lawyers has the expertise to provide tailored legal advice and representation in these cases.

Fight Financial Fraud with a Civil Lawyer in Toronto

If you find yourself involved with financial schemes like investment fraud or credit card fraud, contact Karrass Law. Our lawyers have many years of experience dealing with fraud cases throughout Ontario. We will offer you meaningful legal advice that helps you navigate the complexities of your financial and legal situation. To learn more about your options, contact our dedicated and skilled team of civil fraud lawyers serving Toronto and all of Ontario. 

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