The RCMP reports mass-marketing fraud costs Canadians 10 billion dollars a year, and 80 per cent is committed by organized crime. (iStock)

Mass marketing fraud costs Canadians $10 billion each year, according to the RCMP's commercial crime branch.

The head of fraud investigations at the RCMP's national headquarters said that number has been growing steadily since 2007.

"The indications are from exchanging information with the banks, with private sector groups that are now starting to share more of their fraud data with us, the overall impression from all of those sectors suggests it's going up each year," Insp. Kerry Petryshyn said in an interview with CBC News.

The scams that lure in Canadians range from prize offers that require calls to a 1-900 line and end up costing consumers more than the value of their purported winnings, to the letter from a Nigerian millionaire who offers a huge payment for helping spirit money out of the African nation.

Many of the schemes are sophisticated and appear legitimate, such as offers of loans to people with bad or no credit. To borrow the money consumers have to pay an upfront fee, then the promised loan money never arrives.

'These experienced fraudsters know the victims they're targeting'—Insp. Kerry Petryshyn, RCMP Major Fraud Unit

A recent scheme offered Ontario drivers cut-rate car insurance and then sent fake insurance cards to victims, convincing them they were insured when they were not.

The RCMP believes most of the fraud in Canada is being conducted by organized crime.

"So these organized crime groups and these experienced fraudsters know the victims they're targeting, and they're very specific on who they target and they're already prepared with their scripts and their approach and how they're going to deal with that particular group," Petryshyn said.

International boundaries make investigation difficult

A major hurdle for police in targeting mass-marketing fraud is the international nature of the crime, where scammers can operate from one country and steal from victims all over the world.

Canada is now a member of the International Mass-Marketing Fraud Working Group which includes police agencies from the Netherlands, Nigeria, the U.K., the U.S. and Australia.

Petryshyn said the arrangement hasn't substantially increased the number of prosecutions but it has been successful in breaking the links between the scammers and their victims.

Since 2008, the Canadian Anti-Fraud Centre (CAFC) has shut down 45,000 email accounts being used by scammers, along with 10,000 telephone numbers.

So far this year, the centre has also convinced credit card companies to close 150 merchant accounts that were being used to bilk customers.

Most fraud not reported

In 2009, the CAFC received more than 25,000 complaints — a rate of about 430 calls a day.

But that's a drop in the bucket, according to Petryshyn, who estimates only between one and five per cent of fraud victims are willing to come forward.

'We perpetuate the myth that the victims of fraud were stupid.' —RCMP Insp. Kerry Petryshyn

"We perpetuate the myth that the victims of fraud were stupid. And nobody wants to admit that, so nobody wants to report it," he said.

Petryshyn said fraud victims include doctors, lawyers, police officers and experienced business people.

He believes the best way to combat fraud is to learn how to recognize it.

"Do some research, because education is your best weapon against these fraudsters," he stressed.