Getting money back after being scammed is extraordinary feat, anti-fraud experts say

Of the more than $14.3 million in restitution orders issued in Nova Scotia in the last five years, less than $1.3 million has been paid, according to data from the provincial Department of Justice.

“I genuinely don’t see a lot of people who have been successful in getting their cases taken seriously by the courts from a criminal perspective,” said Vanessa Iafolla, principal at Halifax-based Anti-Fraud Intelligence Consulting.

“The statistics are pretty damning with respect to the effectiveness of restitution orders, and not just in Nova Scotia, but across the country.”

Restitution orders are issued so an offender is required to pay their victim for any financial losses suffered because of their crime. The federal Department of Justice says the order would be part of an offender’s sentence, and can be stand-alone or part of a probation order or conditional sentence.

lafolla said a restitution order is more likely to be paid if it’s tied to another order, like probation. But since they are paid directly to the victim and not to the state, it’s on the victim to secure the payment.

Data from the province shows that from fiscal 2019-2020 to fiscal 2023-2024 until the end of August, a total of 1,966 restitution orders were issued by the courts. Of those, 1,277 were stand-alone orders, meaning the only condition was to make the payment to the victim. 

The remaining were attached to probation orders, conditional sentences or were connected to youth sentences. The provincial Justice Department declined a request for an interview.

For those who embark on the journey to get financial restitution, getting their money back is often a Herculean task, Iafolla said, particularly because “fraudsters can be quite good at hiding their funds, moving things around, making it difficult to track, and it’s hard to know even where to go.”

As such, fraud victims are divided into a two-tiered system of justice, she said. Those with financial resources are more likely to get restitution orders paid, but majority of victims are unlikely to ever see their money again.

“If you can buy your justice, you’re good to go. But if you can’t, good luck.”

Signs of financial fraud

Her sentiment is echoed by Sgt. Andrew Joyce of the Nova Scotia RCMP.

Joyce, a member of the force’s financial crime unit, said the RCMP has been working to alert the public on how to spot potential financial scams. He said fraud cases have been on the rise in recent years, with $3 million lost in Nova Scotia alone in 2022.

“That’s the frauds that are reported,” he said. “There’s some studies out there that suggest that the actual [number of] victims is five times that.”

He said some red flags include unsolicited contact, extreme urgency, requests for upfront payments in the form of gift cards or cryptocurrency, and threats that require financial payments to avoid.

Joyce said people should also be wary of romance scams and understand that fraudsters can use artificial intelligence to mimic people’s voices and their likeness.

“As far as getting conviction, charges and putting people in jail as police, we’ve been doing a terrible job,” Joyce said.

According to the Canadian Anti-Fraud Centre’s annual report for 2021, there were $379 million in total reported losses, which was an increase of 130 per cent compared to the previous year and “the highest total reported annual losses in CAFC’s history.”

That same year, the centre recovered about $3.4 million lost to fraud with help from the RCMP and the Competition Bureau Canada.

Joyce said while police work to get justice for victims of fraud, getting lost funds back is often “impossible.”

“People’s lives are just turned upside down in a lot of cases and I’ve just seen too many heartbreaking cases,” he said.

“I know even when I retire from the RCMP, I’m going to be getting on my horse and preaching as best as I can to try to enable persons from not falling victim to these [fraudsters] that are very good at what they do.”

Addressing weak points

In Iafolla’s estimation, the restitution order system is in need of an overhaul. She said attaching restitution to other orders could help.

“If that restitution order is accompanied by a sentence that includes possible time incarcerated if you don’t provide restitution within a specific period of time, that can encourage people to comply,” she said.

She said another gap that needs to be addressed is the fact that it’s the responsibility of the victim to enforce repayment.

“Fraud is the most prevalent victimization in Canada right now,” she said.

“There’s no teeth in that [restitution] order in many cases, right? Nothing is there to back that up to say, ‘Hey, you have to pay this person back … and if you don’t do this, there are consequences for you.'”

In Iafolla’s view, the criminal justice system in Nova Scotia and across the country fails to offer support or infrastructure to victims who try getting their money back.

“That’s not real justice,” she said.