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The Current Transcript for October 24, 2018

Host: David Common

STORIES FROM THIS EPISODE

Prologue

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SOUNDCLIP

This is about seeing this problem and its solution for what it is: a moral and economic imperative to act, if not now, when? If not us, who?

DAVID COMMON: Get on board with a carbon tax or the feds will impose one for your province. Gas is going to cost more propane natural gas but depending on where you live you could get a lot of that money back. The Government says a tax is key to reducing pollution. Critics though say it will do no such thing and besides they allege Canadians can't afford it. First up the environment minister is here in studio to talk tax and pollution. And then we owe big time.

SOUNDCLIP

An important issue we face as you understand how the economy reacts to higher interest rates given the high debt loads being carried by Canadian households.

DC: As the bank of Canada a key lending rate continues to climb from historic lows to an uncomfortable increase for many Canadians, we're talking to people carrying debt, sometimes big debt; cars, home, school, credit cards, lines of credit. How did it all add up and now what? That's up in half an hour. And then:

SOUNDCLIP

You have one 2.8 million US dollars along with 2018 E-Class Mercedes Benz. Congratulations to you.

DC: The Jamaican lottery scam is too good to be true. But a lot of people have fallen for it. What is it that makes it so convincing? And how did authorities find the kingpin? We're also looking at how it's worsened violence in Jamaica. More on that story in an hour. I'm David Common sitting in for Anna Maria Tremonti and this is the Current.

McKenna defends federal government's carbon tax plan amid premiers' opposition

Guest: Catherine McKenna

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SOUNDCLIP

Starting next year, it will no longer be free to pollute anywhere in Canada. We are going to place a price on the pollution that causes climate change from coast to coast to coast. And we're also going to help Canadians adjust to this new reality.

DAVID COMMON: For the unveiling of his government's carbon pricing plan, yesterday Prime Minister Justin Trudeau made his way to a college campus in Etobicoke which happens to be right in Ontario Premier Doug Ford's backyard. The province and the feds have been at odds with each other on the carbon tax file since Doug Ford pulled Ontario out of a cap and trade system this year. But yesterday's announcement fulfilled a promise from Ottawa that provinces without a plan would have won imposed on them. And so residents of Ontario, together with Saskatchewan, Manitoba and New Brunswick can now expect to pay more for gas by next April while also receiving a so-called incentive rebate from the federal government. And even before the announcement was made push back from the provinces was already strong. Here is Saskatchewan premier Scott Moe.

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It is very easy to proclaim that we need a carbon tax from the comfort Greenpeace quarters, or convenient surroundings at the McGill faculty lounge. But where I travel, in Tisdale Saskatchewan, in Estevan Saskatchewan and where I live in Shellbrook Saskatchewan, and I believe for all those involved in the refined petroleum industry here, in the recycling of steel here in this province, for all of those hardworking people, this does seem like nothing more than a show. I've taken money with one hand and given it with the other.

DC: That is Saskatchewan premier Scott Moe. Catherine McKenna is Canada's minister of the environment and climate change and she is with us in our Toronto studio. Hello and welcome.

CATHERINE MCKENNA: Great to be on the show.

DC: What is it that makes you believe charging for pollution will actually reduce it?

CATHERINE MCKENNA: Well I mean as a young person said if it's free to pollute there'll be more of it. And so I mean we're just looking at what works. So in British Columbia they've had a price on pollution for over a decade. Their emissions have gone down. Their economy has been one of the fastest growing in the country and they have a huge clean tech sector. And so we had the award winning economist who won the Nobel Prize in economics he said that the most efficient way, cheapest way, of reducing emissions and also creating good jobs and incentives for people to choose clean solutions is putting a price on pollution. So that's exactly what we're doing. But you know it's really important that people understand that we got it. The people, we want to make life affordable for people. That people. When I talk to Ontarians who have felt the impacts of climate change, just this summer we had extreme weather where people are literally dying. We've had flooding. We have forest fires across the country. There's a huge cost to these extreme weather events both in human cost but also in economic costs. They want to do right by the environment too and they want to ensure that we are smart about tackling climate change. So what we've done is we've looked at, okay, what is something that can do both? One: ensure that we're reducing pollution and two: putting more money in the pockets of Ontarians.

DC: And that I mean. It presents an interesting question because you're using a tax to attempt to change behavior of people, to try to get people and businesses to pollute less. And yet at the same time you're offering a rebate to some of those same people what is my incentive to change my behavior if you're taxing me now but paying me later?

CATHERINE MCKENNA: Well so first of all you will get your climate action incentive before you pay the costs. the Increased energy costs. You'll receive it through the tax system. And in Ontario it will be for a family of four: Three hundred and seven dollars. But that also, you have the opportunity to save more money because you can make the decision that you’re going to invest in in more insulation in your home, or you're going to take public transit, or you're going to use LED light bulbs, or buy a more energy efficient vehicle. These are all choices you can make. So the incentive is there for you to you know look at what are the cleaner solutions and you can save money. And that's why it works because it sends a signal: Okay, if you pollute less you can save more. And at the same time we're making sure that we are supporting families. And we've always said that we would take action on climate change but we would also be making sure that we're making life affordable for people. So this is completely consistent with what we've said we'd do. And [00:06:25] we gave provinces two years to act. We said put a price on pollution. And Ontario had a price on pollution and it was working. It was reducing emissions. And let's be clear what happened when the Ford government came in: not only did it rip up its climate plan and have no plan and it's free to pollute right now. But it's worse than that. Their actions basically increase the amount of pollution by the equivalent of 30 new coal fire plants' units. That's huge. And so they are going in the complete wrong direction, and also, they don't seem to understand the huge economic opportunity of clean solutions. It's 26 trillion dollars. If we can find these solutions which we have great Ontario companies, great Canadian companies, that have ways to help people save money by being more energy efficient, whether it's eco B which is a smart meter in your home or even contractors that I've talked to - they're helping people have much more energy efficient buildings - we can be smarter about how we do things. We can be more energy efficient. And we can save money. And also [00:07:28] at the end of the day it's about the future we want for our kids. And the UN climate report was very clear. We have a decade to act. And I was really proud yesterday when the prime minister said we're not kicking the can down the road. Too many politicians have done that and the costs are extreme. The costs are going to be in the billions of dollars in decades if we don't act. And we have the opportunity to do something smart. So that's what we announced.

DC: You bring up the question of Ontario Premier Doug Ford who backed out of the cap and trade program that Ontario previously had. That's why the federal government is put in this backstop has imposed a carbon tax of its own. Let's talk about Doug Ford because he's been one of the staunchest critics of this plan. He held an anti-carbon tax rally just earlier this month in Calgary and he did so alongside United Conservative Party leader Jason Kenney. Let's listen to that.

SOUNDCLIP

My friends the carbon tax is the worst tax ever, anywhere. [4.9] It does absolutely nothing for the environment. It's just another Trudeau's Liberal tax grab right out of your pockets. It makes gas more expensive, it makes home heating more expensive. The carbon tax cripples jobs. It will shut down factories. It will destroy small businesses and force more young people to leave to find good jobs. It's the most divisive, most regressive tax in Canadian history.

DC: Doug Ford is demonstrably right on some of those points. It will increase the cost of fueling your car. It will increase the cost of heating your home. If you don't do something else to better insulate your home or to change the way in which you do heat your home. For many Canadians that does mean an increased cost and it does feed into the fear that this will somehow impact the economy. [00:09:22] How do you respond to Doug Ford and Jason Kenney, Scott Moe and others who say that this plan is wrong won't cut pollution and will simply take money from people?

CATHERINE MCKENNA: So I mean they're absolutely wrong. So first of all let's be clear. We have said all the money is going back, in the case of Ontario, to Ontarians. And that is in our legislation. So we're going to be very transparent about that. This is about cutting pollution. This isn't about taking money away from people. It's not a shell game. Action on climate change is something we need to do. There is a cost right now. There's a cost in Saskatchewan. If you're a farmer in Saskatchewan going through extreme droughts, that's a cost on you. If you live in Alberta and you have forest fires or the fire you saw in Fort McMurray, that's a huge cost. If you're in Ontario you have this flash flooding or extreme heat where people are dying. That's a cost. So there is a cost to climate change right now. And what we are doing is actually giving money back to Canadians so they can make decisions - they can do whatever they want with the money. But you will have more money than you will pay in increased costs and you'll also have the opportunity and the incentive to save even more money. We need to act on climate change. I think the real question though, when I hear conservative politicians saying this, is what are they going to do? What are they going to do to tackle climate change? Andrew Scheer stood up in the House of Commons with the Conservative Party. They voted to support the Paris Agreement. Andrew Scheer said he's going to have a plan to meet our Paris Agreement targets. We have a comprehensive plan. We have a plan that is growing the economy and --

DC: But even this plan won't meet those Paris targets. Even what you're doing with the carbon tax is not enough to meet those targets to which you've agreed.

CATHERINE MCKENNA: So let's be clear. Our plan is much more than just putting a price on pollution. So it's phasing out coal, investing in renewables, historic investments in public transportation, so for the city of Ottawa, the second phase of LRT will be the largest greenhouse gas reductions in this city's history. We're making investments in clean technology companies. We're taking action across the board. We've said we will meet our Paris Agreement target and we're going to do that with Canadians in a smart way. So right now our economy- We've created more than 500000 jobs with Canadians. We have the lowest unemployment rate in decades. And we're also taking action on climate change in a smart way that's affordable and that's going to put more money in the pockets of Canadians and allow them to be part of the solution. I was just in Hamilton yesterday at Mohawk College. First of all I was in the largest net zero building on a campus in Canada. How amazing is that. That's a building that actually doesn't require any energy. This is this is how we can be smart about what we're doing and all the students were so excited. You know not just about the price on pollution but the opportunity for jobs and to create incentives for businesses that have clean solutions.

DC: But how do you make that sell job? I mean two thirds of Canadians live in the suburbs and that means necessarily many of them are reliant on a car, a car that for many of them they're now going to pay four cents more a litre in gas to fuel. How do you sell them on the idea that this short term cost, this immediate cost, is going to benefit in the long run?

CATHERINE MCKENNA: Well I mean first of all I will say that you will get back more than you will pay.

DC: Then what's my incentive to change my behavior at all?

CATHERINE MCKENNA: Your incentive is to think about OK when you buy your next vehicle maybe I should choose a more energy efficient vehicle. There are a lot of choices when it comes to vehicles and that's not just electric or hybrid. You can choose a much more energy efficient vehicle. You might also decide, okay, I'm going to use public transportation. You can make those choices or not. It is up to you but if you choose to pollute less you will pay less. And that's the basic principle behind this and that's why it works. And my goal really is to do two things. It is to make sure that we have finally a serious plan to tackle climate change - because if not the costs will be I mean catastrophic in terms of economic costs but also in terms of human costs. And we can't kick rid downlinked the can down the road any more. Politicians have continuously done this. But also in the short term people get more money in the pockets.

DC: We spoke to a number of Canadians who wouldn't otherwise have the opportunity to ask you a question. One of them is Jackie Wall she's a mother of two from divans scattering. If you ever been there, Southern corner of Saskatchewan, lots of coal is pulled out of the ground there. A lot of jobs are contingent on it and in the context of that Jackie has some concerns around carbon pricing.

SOUNDCLIP

We live in a community where we have a coal industry. My husband works at the coal mine. There are huge concerns within our community on the job losses that are going to occur and I'm concerned about my husband's job quite frankly. Coal has been a very reliable source, a very inexpensive source of electricity generation. The wind doesn't always blow. This sun doesn't always shine but coal always burns and when we're in Saskatchewan it's 40 below. We do not want to be concerned with not being able to meet the base load power and energy costs soaring.

DC: When you hear something like that, when you hear Jackie's concerns, when you hear about her worries about her husband's job what do you say?

CATHERINE MCKENNA: So I'm absolutely sympathetic people need good jobs. We need to be making sure that we're supporting families. So in Saskatchewan, I know the premier Saskatchewan. He was the former minister of environment. He in fact came to me to climate negotiations one year.

DC: This is Schott Moe?

CATHERINE MCKENNA: Scott Mow. And I said Look put a price on and you can give the money back as a tax cut. But he didn't want to do that. He had two years to figure out a plan. So we're stepping in. And with Saskatchewan families they're going to get a Climate Action Center of 609 dollars because they're you know that is when you look at their energy you look at their costs. That's what we arrived at. And that's going to be more than they pay.

DC: But that does mean in Saskatchewan- and what was the amount again the average family in the Saskatchewan?

CATHERINE MCKENNA: I mean every family of four will receive 609 dollars.

DC: So 609 nine dollars versus the average New Brunswick family will be closer to 250. Why is there that difference?

CATHERINE MCKENNA: Because we said that each and every province any money that was raised in that province goes back to the province. So it just reflects their energy mix and some provinces they will there'll be different impacts. But wherever you live where we've had to step in- and as I say, look we said to provinces go figure it out yourself. Figure out you're made in Saskatchewan plan, your made in New Brunswick plan, your made in Ontario plan and you can decide what you do with the revenues. But it can't be free to pollute. It just can't be because that doesn't create the right incentive. And so they unfortunately, Saskatchewan, didn't do that. Although actually they did do that for heavy emitters. They actually put a price on pollution. So Scott Moe actually partially understands that it can't be free to pollute. But they didn't do a plan that you know met the standard we said. So we said okay, we're going to step in but we're going to give more money to Saskatchewan families and they can decide what they're going to do with it and how you know they're going to reduce their emissions. And we've recognised I mean so we recognise their unique circumstances so farming fuels we've excluded farming fuels because we understand farmers know their unique situation. If you live in a rural or small community you would get a 10 percent supplement to your climate action incentive.

DC: So it would be easily able to access public transport, for instance. You know you bring up the issue of big emitters. Saskatchewan has a plan around big emitters some other provinces do. The federal plan at least around this particular carbon pricing does not address big emitters. Why is that?

CATHERINE MCKENNA: Well we do have a plan to make big big polluters pay. The yesterday's announcement was really focused on how do we address fuels across the system. Our plan is exactly, actually it's very similar to what Saskatchewan is doing Alberta, Quebec, California, Europe which is you make big polluters pay but you also make sure that you've done it in a smart way that you've got an incentive for them to reduce emissions but also to keep good jobs here in Canada. Because these are companies that do compete internationally and so you have to have a smart plan and you know as I say I mean Scott Moe talks about being against a price on pollution and he's actually brought one in recognizing that it does work.

DC: We were talking about bigger businesses. If I want to talk about smaller businesses and this is a concern coming from a small business owner in Ontario, Mina Bashta who owns a pharmacy in Newmarket.

SOUNDCLIP

One of the concerns that I have is the impact that it would have on my expenses. I drive about four to five hours per day for my work, I do consulting work across the city. What kind of impact would it have on my business in terms of my cost being able to deliver the products that we have, at the same price, without having to increase them and who will incur these prices?

DC: What do you say to someone like Mina Bashta. Lots of people are going to be in that same boat.

CATHERINE MCKENNA: So 90 percent of the money that is being raised in Ontario will go directly to individuals. So he will be better off. He will receive the Climate Action incentive. But for small businesses we also realize we want them to be part of the solution. So we will, over the next five years, be taking part of the revenues and it's going to be the largest investment, close to 1 billion dollars, to support small businesses so that they can save money, be more efficient. So we recognize the unique circumstance of small businesses. They are the backbone of our economy. We need to be working with them. And I've had a chance to talk to a lot and visit a lot of small businesses. There's a company called VeriForm, a manufacturing company out of Cambridge. And it's interesting to talk to small businesses. So they looked at how could they reduce their emissions. They reduce their emissions by 80 percent. And it wasn't like solar panels they did. They actually used automation they made sure that they were just being smarter about even how they use fans instead of blowing air down they blew it up. And they just took a comprehensive approach and they saved a million dollars. And the owner was interesting. He said to me like I care about climate change. But even if I didn't I would have done this because we're just being smarter and more efficient. And so we're going to be supporting small businesses to help them figure out how do they realize savings, how do they be part of the solution it comes to climate action. And that can be as simple as if you're a restaurant, so a lot of small businesses are restaurants, having a much more energy efficient fridge. And so there's ways we can do things and we're here, we're all in this together. You know whether you are rich or poor, whether you're from the north or south of Canada, whether you're on the left of the spectrum of the right spectrum, climate change is impacting all of us. We all need to be part of the solution and we need to position Canada to have the jobs of today but also the jobs of the future.

DC: We've only got a few seconds here left. Are you prepared to fight the federal election campaign next year on this? It seems to be a defining issue.

CATHERINE MCKENNA: Absolutely. You know what we're fighting for? We're fighting for our kids. We're fighting for good jobs. We're fighting for Canadians. We have an opportunity to do right by the environment do right by the planet and also ensure that we are positioning ourselves well. So that's what- Yes. I got into politics because it matters.

DC: We'll leave it there. Catherine McKenna thanks very much for coming in today.

CATHERINE MCKENNA: Great thanks.

DC: Catherine McKenna is Canada's Minister of Environment and Climate Change. She was in our Toronto studio. CBC News is next. And then wist interest rates climbing all that debt that Canadians are carrying truly starting to feel heavier. We're going to be talking, quite candidly, about debt. It's part of a CBC News series detonation look at the debt that's coming in around school, education debt, lines of credit, credit cards, huge mortgage debt. And it's just been growing and growing and growing over the past three decades. We are going to be talking about that right after the news. I'm David Common sitting in for Anna Maria Tremonti. You're listening this morning to The Current.

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Expert advice on how to stop 'using our houses like ATM machines'

Guests: Helen Van Dongen, Doug Hoyes, Joe Donaghey

DC: Hello I'm David common in for Anna Maria Tremonti and you are listening to The Current.

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DC: Still to come: Across Canada and the U.S. people are getting calls telling them that they're the big winner of a lottery prize. But there is just one hitch; they've got to send some money to Jamaica to cover the taxes and claim their winnings. Scams such as this one have become one of the biggest criminal enterprises in Jamaica, generating hundreds of thousands of dollars to finance gang warfare on the Caribbean island. We're going inside that practice in half an hour. First though, tighter times on the horizon in Canada's debt nation.

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DC: After years of low interest rates and cheap debt it seems the times are changing. The Bank of Canada has raised its lending rate a quarter of a point today. It's the fifth increase since last July. That brings it up now to one and three quarters of a percent. Every time that number creeps up it means bigger payments for Canadians carrying debt. And a lot of Canadians are carrying a lot of debt these days. The amount of household debt in this country has been on the rise for the past three decades. At the end of last year Canadians owed just over two trillion dollars. Now when rates rise, even by just a little bit, it can mean the difference between just scraping by and feeling the pain of real financial troubles for many Canadians. This week CBC News is running a special series called Debt Nation in part to get past the stigma of talking about debt and to examine the way that it's impacting many of our lives. Today, we're going to look at the ripple effects of Canada's debt problem with those who have been directly affected by it. Joe Donaghey is a recent university graduate now working in a community of St. Anthony in Newfoundland and Labrador and facing the prospect of paying off his $47,000 student loan among other debts. He joins us this morning from St. Anthony. Helen Van Dongen is an event planner from Toronto who encountered a crippling debt problem managed to dig herself out of it. She joins us in our Toronto studio. Also here in Toronto is Doug Hoyes, a licensed Insolvency Trustee with Hoyes Meclis and Associates Incorporated and the author of Straight Talk on your Money. He's here with us. Hello to all three of you.

HELEN VAN DONGEN: Good morning.

JOE DONAGHEY: Hello.

DC: Well Joe I want to start with you your story is a lot like I think a lot of recent university grads. You've got a pretty big debt. How big is that debt right now? Just the student side of it.

DC: The student side is 47,000 before interest.

DC: And I'm wondering what your prospects are for actually paying that back.

JOE DONAGHEY: I'm not sure actually. I'll start paying back in November first. And I think my minimum payment they want is 570 a month. That's 10 years.

DC: So how does that compare to how much money you make. Like how much money will you be left with to live on at the end of the month relative to any other payments you have; car payments, insurance, eating, that kind of thing?

JOE DONAGHEY: With everything it's about $100-150 extra a month.

DC: That leaves you with very little in terms of any disposable income.

JOE DONAGHEY: Exactly.

DC: You have a car you're in a small remote area. What happens if your car breaks down?

JOE DONAGHEY: I don't know. I don't know.

DC: It would go on credit presumably.

JOE DONAGHEY: Yes of course of going credit. I mean I have a fairly new car so I'm hoping, hoping nothing happens.

DC: Doug Hoyes when you hear a story like Joe Donaghey here, how typical is that when you look at someone young, who has a large amount of debt and will be left with very little at the end of every month to just pay for any other expenses?

DOUG HOYES: Well it's very typical if you look at the cost of postsecondary education today unless you had rich parents or got some kind of full ride scholarship. It's very common to graduate from college or university with 20-30-40-50 thousand dollars in debt exactly as Joe has described. And that's fine if you end up getting a job making huge bucks. But the situation Joe described is very common. Yes. He's in a good situation in that he's got a job but as he said well, okay, maybe I've got 100-150 bucks left over at the end of the month. So what happens if I have to go and buy a new pair of boots when winter starts. Well I've got no cushion whatsoever. And so it's very precarious when you're carrying debt. I mean unfortunately there's not a whole lot someone in Joe's position can do. If you want to go to school and you don't have other resources, you're going to have to use debt to do it. So you've got to be very careful when you when you graduate.

DC: Joe, I sort of wonder do you feel alone, or do you think you're one of a large number of people who are like this?

JOE DONAGHEY: I know it's fairly common among students to get into debt. I've done I guess maybe seven years of postsecondary education. And each year I took out student loans. Now I'm not sure that that's so common. I mean I'm sure everyone have student loans but maybe not as much as I do.

DC: When you look back on those seven years, is there anything that you think now you could have done differently or was this just the option to do what you wanted and needed to do?

JOE DONAGHEY: Well looking back I wished I started paying it off as soon as I could, but that is usually- you know you have your summer job and you save up money for the next school year. But working you know on a fast food place, making maybe you get 15 or 20 hours a week that just barely covers your rent. So there is extra to put towards your debts. So I wouldn't be in a situation I am in now.

DC: Helen Van Dongen. You're here in studio with us and you found yourself in a lot of debt but it was later in life. Can you walk me through your story?

HELEN VAN DONGEN: Sure. I'm in my 50s. I've been an event planner for almost 30 years mostly employed corporately large organizations, logos you would recognize on my business card. And five years ago this month actually my team was reorganized. And without a team to lead, I found myself unemployed. And it's been five years of trying to find a similar job to what I had. And I think those jobs are dwindling in number. And the people who are in them at the moment are hanging onto them with both hands for good reason. So I've found myself having to work as an independent planner; contract to contract; taking client work where I can. And there have been a fair number of fallow periods when your on the planning side of the fence rather than the selling side of the fence. Sometimes you don't have the skills sharp enough to be able to go out and find the next piece of work when the current one comes to a close. So I've struggled frankly to maintain a level of cash flow that could manage the commitments that I had financially.

DC: And what were those? What were the debt side things? Was it something like a mortgage?

HELEN VAN DONGEN: I certainly had a mortgage. I had a car and professional societies to pay dues to. And a dog and a cat to feed and frankly friends to keep in touch with and keep up with.

DC: You are using past tense here though.

HELEN VAN DONGEN: I am using past tense. In one respect I'm certainly a good news story. I decided after hitting that 140,000 dollar figure in debt just earlier this year that what I really needed to do was sell the condo that I had. And in Toronto real estate market I was very grateful that I had something that was of value. It wiped out the mortgage. It wiped out two lines of credit and two credit cards that totaled 140 k.

DC: But it also wiped out an asset as you are closer to the retirement side than the entering the workforce side.

HELEN VAN DONGEN: Absolutely. I no longer have that asset. I have a small cushion only 25,000 dollars that remained after I'd paid everything off and my RSPsare gone except for one small locked RSP that I can't touch. So I now joke with my friends that I'm going to have to retire about three weeks before I die because I don't think there's going to be enough money there to have the kind of retirement that I might have wanted.

DC: It's a bit of a black joke kind of dark humor. Doug Hoyes, when you hear stories like that, we talk about struggling students and have talked about struggling students for a long time. But the the average age I think to declare bankruptcy in this country is 45, mid 40s now. When you hear this kind of story, when you hear Helens kind of story, is that increasingly typical?

DOUG HOYES: Yes and I think Helen addressed the issue of precarious employment which is something we see a lot more. It used to be that you know I got a job at the factory. I worked there for 40 years and I retired. Well that's just not a thing anymore. It's very common for people to switch jobs frequently throughout their careers. Exactly as Helen described it. Well I had a good job but then the corporate overlords decided to eliminate my department. I got restructured out.

DC: And that happens a lot to people in their 50s in particular.

DOUG HOYES: Yes because you're at the upper end of the pay scale at that point. So there's more bang for the buck to get rid of someone making at the higher end than two people making at the lower end. And so it's very common. We had this perception that if I work for a big firm, and Helen just said she worked for a bunch of big firms, that's security. Well no actually in today's day and age that's actually a much more risky thing because the big firms are the ones who do the mass layoffs, the big restructurings. That's not the little firms that do that. And so as a result you can find yourself later in life without the security that you thought you had.

DC: Helen you were describing some of the ways that has impacted your life. You sold your house. Do you still have a car?

HELEN VAN DONGEN: I have a car that have actually made the decision to sell the car.

DC: You made the decision to sell the car. You've changed a lot of the financial aspects of your life. I wonder though how has it impacted you psychologically to first have seen this debt grow grow grow and now been able to eliminate it but at a cost to your own financial future?

HELEN VAN DONGEN: Well while the debt was growing and I was struggling to find employment that was long enough and would pay me enough to be able to manage that debt along the way, it was pretty stressful. You know sleepless nights and you're kind of afraid to look in the mailbox when the bills come in. But having made the decision to do what I did and make the change that would free me of the albatross around my neck, the relief that came with that was commensurate. Now my concerns are all around what's going to happen when the contract I currently on comes to an end. How long will it be between the end of that contract and the beginning of another one. And so I'm finding that I have to be more resourceful about how I think about the skills I have to sell and what shape other opportunities might come in. And I've had to be frank with friends about what's going on in my life how I may not be able to buy the you know a couple of hundred dollar concert ticket to go with them to an event. How lunches out are not going to be in the fancy restaurants downtown.

DC: Do you feel having those conversations. I mean it's one thing to say no to a fancy lunch but another to explain I'm saddled with a lot of debt and I don't necessarily see an easy path out of it.

HELEN VAN DONGEN: With my close friends it hasn't been difficult, which I guess by definition that's why they are close friends. But with my sort of broader circle professionally, I don't talk about it. We either agree to meet for a coffee or we go for a drink perhaps rather than buying a meal together. Because I'm a planner I'm often hosted for lunches and events by people so I don't have to reach into my pocket all the time. But you can't do that ethically without business to bring to someone. So you have to balance that and negotiate ways around it where you don't have to put up a big sign over your head that looks like I'm a financial failure and I can't play in that sandbox anymore.

DC: You know, Doug, as our producers were lining up today's program we had a lot of difficulty finding people who are facing debt right now and in some cases crippling debt. We had great difficulty getting them to come on the radio and talk using their names about their situation. There's a lot of shame I think that's attached to this. But it is not at all unusual and perhaps that shame might be misplaced. I wonder because these people come right in front of you multiple times a day what your observations are?

DOUG HOYES: Yeah it's it's embarrassing. And the reason it's embarrassing is the only way you can possibly have debt today is if in the past things were better. So I can't borrow money from a bank unless I have a decent job. So in the past I had a good job. I was able to qualify for a mortgage, finance a car, get a line of credit, get a credit card, but now I can't make those payments well that's because things have gotten worse. And that's the the toughest pill to swallow that I was doing really good but now I'm not. And so it's that well you know what's going to happen in the future. I mean as Helen said it's stressful thinking what's going to happen in the future. I know what it was like. If you never had any money your whole life and you have no money today. That's the way it's always been. But when things were better and now they're not as good and you don't see something improving in the future that's the most damaging part.

DC: But there's also I mean just aspects of the financial system so we've gone through a decade of very cheap money to borrow. That is changing now and will continue to change and that's putting a lot of pressure on people who have set up their mortgages in the hopes that low mortgage rates would remain for even longer. But you also have things like seven year car loans where you're underwater for years and years and years of that, you trade that car and you get in an accident something happens. You're going to continue to owe more money on that loan even though you don't have the vehicle anymore. How much does the system set you up to be in complications?

DOUG HOYES: Oh it's huge. It's huge. And so as a consumer you have to understand how the system works. You've got to understand what a seven or eight year car loan means especially if you're only going to have a car for five years. You've got to understand. So it's on the news today we were talking about a quarter point increase in the bank of Canada prime rate. Okay. What does that mean in real terms. Well if you've got a mortgage or a variable rate line of credit go do the math to figure out what that means in dollar terms for you. I mean a 400 thousand dollar mortgage, 20 year amortization a quarter point increase is probably something like 50 bucks a month. My math may be off but that's kind of the ballpark. Okay it's happened four times already. That's 200 bucks. It's going to happen again today. Now we're up to you know 250 bucks. Well how many people in the last year have had an increase in their paycheck by more than 250 bucks. Probably not everybody that's the impact of higher interest rates. So you have to understand what it is doing to you and do kind of things like Helen has done and said 'Well maybe I've got to downsize, give up the car.' Things like that.

DC: Then that has profound implications for your life. You know from the later point in life. Let's go to the beginning of a professional life. Joe Donaghey I want to come back to you. You're still young. How old are you now?

JOE DONAGHEY: I am 27.

DC: You're 27. You got the student debt. Thousands of dollars of it. You have a plan to try to pay that back. It's going to cost you the bulk of your income over the next couple of years certainly. How concerned are you that you just won't be able to pay it back?

JOE DONAGHEY: I'm I am lucky right now as I have a two year contract. So at least I have a steady income for the next two years. After that I don't know. I have two choices. One is to go you know move back to a city and find like a fast food job. Or my second option is to go back to school and do my groundwork. But then, at the same time you know get more into debt. So I am of course I'm concerned and worried about what happens after my contract ends. I'm not going to say I mean I have, right now I have a payment plan I'm like, all the bills and everything, it lines up with how much I get paid every two weeks that all goes out the window.

DC: When you're trying to something like that, do you ever think you'd be able to buy a house?

JOE DONAGHEY: No I don't think so. Also I don't know I want to. Because I mean personally I think my 47,000 dollars of student debt is a lot of money. But I mean that's cheap for house right.

DC: Yes. It' certainly is.

JOE DONAGHEY: I just can't fathom having the much amount of debt at a point in my life, especially how I feel now with this amount.

DOUG HOYES: Doug Hoyes do want to talk about mortgage debt? Because there is this sense that many Canadians are simply carrying too much. We have a stress test now that has excluded some people from the market. But it's a recent advent. And so there are a lot of people who didn't face it who now may well be facing a lot of stress.

DOUG HOYES: You're right. It's a recent event the historically mortgage rates were a lot higher than they've been. And anybody who bought a house over the last five or 10 years, even if you bought way too big a house, took on way too big a mortgage. It almost hasn't mattered because while the price went up. So I've been able to sell and pay off the mortgage and it's all good. Well what's going to happen with people who bought a home last year close to the peak. Interest rates are now creeping up. As a result, house prices are you know potentially under a lot of pressure. And if I do need to move to another city and sell my house or if I do get laid off and I want to sell my house am I going to be able to do that and actually get out with some money. I mean it worked out well for Helen because she had bought her condo a while ago and it had gone up in value. That may not be the case for everyone. We've been using our houses as ATM machines. Okay I need some money, I can refinance, get a secured line of credit, get a HELOC. And as a result we've been able to continue to consume beyond our means. That is not going to continue forever if house prices get under any kind of pressure. So we can't continue to live like that forever.

DC: Helen Van Dongen, and there are certainly people who are listening certainly who are looking at your situation seeing themselves. What advice would you have, given where you are, to those who are looking at large amounts of debt, in your case it was 140,000 dollars. What do you do>

HELEN VAN DONGEN: Well you can't hide from it. If you do they'll find you and the bank will call and at the worst situation they'll take your home away from you. If you can't pay your mortgage they'll shut off the lights. You know bad stuff can happen. So recognizing that things are bad, admitting that to yourself first I think is the first step in finding a solution. Reach out to professionals there are debt counselors available that cost no money and can help you restructure. If you already have financial advisers in your life, talk to them, be straight with them. Don't hide anything. Make sure your family knows. If you're married and have children and those responsibilities weigh on you and you worry about what they'll think about you if you can't provide that to can be a trap. Certainly while I respect Doug's profession you don't want to end up across the desk from him if at all possible. So I think taking charge early can keep you from the worst situations that can happen. I have a friend who's facing foreclosure on her home because she's stuck her head in the sand and it can be scary to open bills when they come in the mail.

DC: You're saying better to do as you've done and sell that big asset before someone comes knocking and says you have to.

HELEN VAN DONGEN: Absolutely if you've got a way to dig yourself out unpalatable though it might be. I'm not delighted I don't own my home anymore but I had to do it in order that I was the one in control.

DC: Joe Donaghey we tracked you down after you posted about your debt on Reddit. I wonder if you can tell us a bit about that, why you were reaching out for advice.

JOE DONAGHEY: I just wanted any input and hopefully find other people who are in similar situations and see what they have done and any advice they have for me.

DC: Did you get any?

JOE DONAGHEY: Yeah I got a few. Somebody who used to work for the student loan center commented and gave me a bunch of advice.

DC: So what were the kinds of things they suggested?

JOE DONAGHEY: A lot of it was get rid of the small things like I have a subscription to CAA You know get rid of that and stuff like that and some other things. So I was looking to the comments here just to talk to an adviser or call up you know the student loan center and talked to someone there because they are the best person I guess, they have the most knowledge to help you with that. And you know most of the time the can work with you. Right. They're like lowering your interest payments for a bit or you know subsidized payments or something just to talk to somebody and seek help.

DC: Doug we've only got seconds here left. But what is the one thing people who find themselves in escalating debt ought to do now?

DOUG HOYES: I totally agree. Reach out for help as debt problems don't go away. They get worse. So reach out for help.

DC: Thanks very much. Well that is all the time we have for our discussion on debt. Joe Donaghey joined us from St. Anthony Newfoundland Labrador where he works for a music outreach program. Here in the studio in Toronto: Helen Van Dongen an event planner and Doug Hoyes who is a licensed Insolvency Trustee with Hoyes Nicolette's and Associates and the author of Straight Talk on your Money. You can follow our Debt Nations series all week on CBC News. Now coming up in just a moment phone scams are a huge source of money for Jamaican gangs. They're often targeting seniors seniors in the U.S. and in Canada. In our next half hour we're going to be speaking with an American prosecutor who just put one of Jamaica's phone scam masterminds behind bars. The whole story of how he did it and what more we need to know about that growing scam. I'm David Common sitting in for Anna Maria Tremonti. You're listening to The Current.

[Music: Theme]

Sentencing of Jamaican phone scam mastermind a milestone for U.S. prosecutors

Guests: Jonathan O’Konek, Jovan Scott Lewis, Jessica Gunson

DC: I'm David Common in for Anna Maria Tremonti and you're listening to The Current.

SOUNDCLIP

[Sound: Phone ringing].

VOICE 1: To you think you could go to Bismarck one day? And open an account with Bismarck?

Oh God.

The money is [unintelligible] it is not mine.

[Sound: Phone ringing]

VOICE 1: What happened about the cheque? Did they say the cheque cleared?

VOICE 2: No

VOICE 1: What did they say?

VOICE 2: They said that the other bank put a hold on the cheque so they had to send it back.

VOICE 1: That's the 5,000? The 5,000, they sent it back?

VOICE 2: Yes. They sent it back to the other bank.

[Music]

[Sound: Phone ringing]

VOICE 2: I don't know. [Sobs] I can't do this anymore.

DC: An Elderly woman in North Dakota and a telephone scammer from Jamaica. Those recordings were made by the FBI, as part of an investigation into what's become a rival to the drug trade is one of Jamaica's most lucrative criminal enterprises. The scammers work in different ways but generally target people and especially seniors by telling them they've won a lottery prize, but they just need to cover the costs of the taxes to claim that prize. The woman in those recordings sent nearly 300,000 dollars to Jamaica. The FBI believes there are hundreds more victims just like her and some of those victims are Canadians. Last week a man described as one of the kingpins of the Jamaican phone scam operation was sentenced to six years in federal prison and ordered to pay a million and a half dollars U.S. in restitution. Lavrick Willocks was prosecuted by Assistant U.S. Attorney Jonathan O'Konek who worked closely with the FBI to uncover a case that spanned five U.S. states and defrauded over 95 individuals. We've reached Mr. O'Konek in Bismarck North Dakota. Hello.

JONATHAN O'KONEK: Good morning.

DC: How did they actually do that? They called up and said you won the lottery, but there's a catch?

JONATHAN O'KONEK: Right. So this is an advanced fee scam. So what they would do is have people who are very good at making phone calls, people who are very persuasive. They would get lead lists, you could get like from Publisher's Clearinghouse but in turn these individuals would use them to find people, generally elderly, who they could convince that 'you've potentially put in for Publisher's Clearinghouse. We're calling you to let you know the ‘you've won’ - let's say - three and a half million dollars'. And then from there, once they got information they essentially roped them in to giving a small amount of money and then larger amounts periodically until some individuals give up their life savings.

DC: And this guy who's now been sentenced to time in a federal penitentiary that the kingpin of it all who's he?

JONATHAN O'KONEK: He's a Lavrick Willocks. So he worked out of Montego Bay with some other individuals in his family where he would essentially get lead lists from people in the United States to essentially give those lead list to callers or dialers who would make phone calls to victims. And we've got victims from North Dakota where we got involved in 2012, Arizona, Texas and North Carolina. And once these individuals made phone calls they would ask, usually elderly people, to go and either write checks or send Western Union or Moneygram wires in amounts you know either from a hundred dollars to thousands of dollars, in some cases hundreds of thousands of dollars, to what they called runners who would essentially pick up money from Western Union areas and take it to another person who might be a money mule who would physically bring thousands if not hundreds of thousands of dollars from America to Jamaica.

DC: This is a massive coordinated scheme when you're talking about it. But I got to go back to this whole notion of lead lists. I mean this is something you hear about in the world of sales, of 'I'm selling blenders. I try to sell to people most likely to buy those blenders'. Who are you trying to target? Where do you get these lead lists and who are on those lists when you're trying to scam?

JONATHAN O'KONEK: So they'll get the lead list just like from anybody else. If somebody enters into a contest they sign up for a lottery or they potentially could purchase a credit card. There's a list of names obviously and sales that people will sell to different businesses. This is a similar case except there is no lottery. So Sanjay Williams - who was the individual who received 20 years in federal prison for essentially being the lead list mastermind in the United States - he would engage in a business where he would get these list of individuals, sell them sometimes for five dollars a name, to people in Jamaica who would then make these calls. And what they would do essentially is start out by saying 'you give us five dollars you can enter into this raffle, lottery' or they would sometimes just tell them from cold calling that this was a prize that you had won. And as for some of the individuals in the last trial we had in September it would take thousands of phone calls to get what they call a client or a person who would be a victim.

DC: So once they convinced someone, we've heard from victims saying that the scammers were were relentless. How did that come out?

JONATHAN O'KONEK: So they would call all times of the day and night. So once they got their hooks and somebody they would exploit them to the max they would initially call them be very friendly asked them to send a couple of hundred dollars. And then it became well the fees actually are a thousand dollars or there's something from the FDIC or the IRS taxes. And they would go on to, if people questioned why they were sending this type of money or this amount of money, they would - Lavrick Willocks and others, would get other people on the phone with them. Those individuals would pretend to be from the FBI from the IRS, visiting them to keep things. In some cases they would have people take taxes and show up at their door.

DC: So you had people in the U.S. who were acting in support of this scam, who'd actually go and threaten people at the door?

JONATHAN O'KONEK: Sometimes yes. They would actually have, one of the last trials we did, an individual that showed up at a victim's door explaining that they were with an individual that was known to the victim as the person who was working on their lottery winnings. And that person, the victim, took that as a threat. And those are just types of activities they would do to get money because they would continue to get as much as they could even if it meant having them open new bank accounts, or even send money to other victims to help essentially get those victims to be part of the scam.

DC: This started when? It was 2007-2008 that that time frame?

JONATHAN O'KONEK: In early 2010 is when is when this really took off. The whole Jamaican lottery scam kind of started when there were telemarketing companies out in Jamaica and a lot of the Jamaican citizens would work at those telemarketing companies. Our office got involved in 2012 after the individual who was on the recording in [unintelligible] North Dakota was the victim of this scam and lost over 300,000 thousand dollars.

DC: How does that happen? How does someone hand over $ 300,000?

JONATHAN O'KONEK: It's something when people believe strongly enough that they've won something, once you paid that initial part of the thing is a fee, they believe it so strongly that they will continue to give more and more because they have already essentially put so much money. Much like if you're waiting in line for I guess an amusement ride if you've waited a few hours, you have a time vested money vested into getting on to that ride. Additionally some of the individuals they are mostly elderly. They don't know. They're not as tech savvy and the scammers know this and they know that they have people that they'll talk to, it is part of the scam. They will convince them that if they tell anybody that they might lose the entire amount of the winnings. And so there's a certain level of both money that's already been invested, fear, shame and in a certain sense this belief that you've won something and you want to provide for your family because you've been waiting for this your entire life. And it's a combination of those factors that lead people to really send money to individuals who are scamming them.

DC: This clearly enriched a small number of people. But I wonder what it did in terms of Jamaica as a country. Has it impacted that nation relative to the gang activity that it already has?

JONATHAN O'KONEK: Yes there have obviously been reports of individuals who are fighting over these lead lists, you know, to get the best leads, to get the names where they can make fewer calls. And that has led to violence because of the amount of money that can be made. In Jamaica they have responded by passing laws that are able to better fight this. Before they didn't have any sort of law that was able to really target this specific crime. And so that after they passed the lottery scam Act and created a [unintelligible] organized crime division to target Jamaican scammers. This was something that was rampant in Jamaica and been causing violence.

DC: You put a guy in jail now, the guy who was at the top of this Pyramid's. Is going to have any effect or is this scam going to continue?

JONATHAN O'KONEK: Well we are hopeful that it has an effect that shows if you are targeting individuals in North Dakota, the United States and all over the world. There will be consequences because generally speaking these types of offenses due to the international nature oftentimes they may or may not be prosecuted. But we're hopeful that this will have an effect to deter individuals. However you can't prosecute the problem just like with drugs or any other illicit activity. It really comes down to education. Talk to your grandmother. Talk to your mom, your family members, let them know that this is something to watch out for. And also to educate the people in Jamaica or the people in the United States who are runners who might get caught up in this that you're hurting individuals and there are consequences when you engage in that type of activity.

DC: Jonathan O'Konek thanks very much for speaking with us today.

JONATHAN O'KONEK: Thank you sir. That is Assistant U.S. Attorney Jonathan O'konek who was the prosecutor in the case of lottery scamming kingpin Laverick Wilkes. We reached him in Bismarck North Dakota. Now my next guest has spent time with the phone scammers, not as a victim and not as a police officer. Jovan Scott Lewis is an professor in the departments of African-American studies in geography at the University of California in Berkeley. He spent more than a year researching lottery scamming in Montego Bay Jamaica. That's where he's originally from and where there has been a state of emergency in effect for nine months, in response to a surge in violent crime. Mr. Lewis joins us from Berkeley California. Hello.

JOVAN SCOTT LEWIS: Hi. Good morning. Thanks for having me.

DC: You actually were talking to these people who were carrying out this scam. How do you even make contact?

JOVAN SCOTT LEWIS: When I began my research in 2011, and this is just shortly after as Mr. O'Konek identified the kind of taking off period of the scam. And at that time, it was a practice that was actively done out in the open. And so it was relatively easy to identify scammers at the time. And I suppose also being a Jamaican made my access to them relatively easy.

DC: What did you learn about them? Who are they?

JOVAN SCOTT LEWIS: Well at the time most of the lottery scammers that I encountered at least were you know usually unemployed or underemployed young men who had engaged in casual labor, some of whom had gone through the various kind of vocational training programs in Jamaica, mostly in the tourism industry. But also a few had, again as Mr. O'Konek identified, gone through the vocational training programs to work in call centers that at the time were beginning to really flourish in Montego Bay specifically.

DC: Was this some level of desperation because it was an opportunity, even if it was an illegitimate one, or was this just a big opportunity to make big money?

JOVAN SCOTT LEWIS: I think it was it was both. I mean so what's interesting about Jamaica is that Jamaica has roughly about a 20 percent poverty rate, as a middle income country, and especially in Montego Bay having the kind of regular tourist encounter, there is a kind of familiarity with Western wealth that makes a kind of ambition for that kind of lifestyle a very common experience. And so there is a knowledge as to what lifestyle could be had. And because many because of the call centers and the access to the victims it made it quite possible.

DC: You got people flooding your beaches in the winter who have a middle class lifestyle, an enjoyable lifestyle. You're saying they wanted that for themselves. What did they use the money for?

JOVAN SCOTT LEWIS: So with the individual that I worked with, that I'm going to be quite conscious of my language here, many of them basically they would buy cars for themselves, and not necessarily flashy cars but in many cases stacked up cars if you will; Toyotas that kind of thing. For the individuals that I came to know many of them would invest in their children's education. Of course there was the kind of conspicuous consumption that has been identified to some extent, luxury items to some degree, jewelry but nothing nothing to the degree that we would come to see much later as a scam began to flourish much more broadly.

DC: Your research has this rare in fact really unique window on the growth of this scam and the life of the scammers who is behind it. But I hear you being careful about some of your language. What were you thinking at the time in terms of the ethics of the research and how much you should be a party to.

JOVAN SCOTT LEWIS: Right. I mean I was very cautious about that. And you know I thought about ethics all the time. You know as a social scientist ethics are issues that we take very carefully into consideration, especially as an anthropologist where we typically tend to work in communities where there is impoverishment, where we are dealing with people with a particular kind of racial or even colonial histories. We have to hold all of these things in our mind as we begin to assess what the practices that they are engaging mean to them but also to us. And so for me there was a real question and so I made sure that you know once there was anything that became uncomfortable with I excused myself.

DC: You know you're exploring a bunch of things. I do wonder on some level if you ever felt it was your place to call the authorities.

JOVAN SCOTT LEWIS: Well that's what was so interesting about the time is that in Jamaica there really wasn't the kind of prosecutorial response to lottery scamming. In the period between 2009, which is when the [unintelligible] that I knew began scamming and so therefore before I arrived in Jamaica with my shield work up until 2012 and they acted largely with impunity. But there was a kind of revolving door practice if you will, where they would get arrested, they would get bail and largely they would walk free in a day or two. And so there was a general sense in Jamaica at the time that this was maybe at most becoming a nuisance but not necessarily a problem to the degree that was later to be seen to become.

DC: You were also talking about the violence, the legacy of colonialism and how that plays into the circumstances that were created. Just tell me a bit more about that.

JOVAN SCOTT LEWIS: Right so what was interesting is that at the time there was this developing rhetoric amongst scammer's, around the time of 2012 where they were beginning to see the scam in fact as a form of reparations for slavery and for the many years of colonialism. And what we've seen is that in other places where scamming has been studied, say Nigeria for example, similar similar discourses have been utilized. As far as the violence, what's very interesting about the history of violence and scamming in particular is that from my research identified the violence beginning really around this 2012-2013 period when the Jamaica lottery task force is formed, where the United States government begins to become increasingly interested in lottery scam. That leads to a kind of constriction of the availability of lead lists. And so once you have a diminishing availability of lead lists, scarcity rather, you begin to see an uptake in violence over access to those lead lists.

DC: As it became more sophisticated, the possibility of violence.

JOVAN SCOTT LEWIS: Absolutely. And so what we don't hear about is the fact that in Jamaica you have school age children buying international calling cards for example through Digicel and using that and dialing random phone numbers on their mobile phones and trying to scam people.

DC: I mean that's interesting in and of itself because what we're saying is it becomes normalized throughout society. It's not just a small criminal organization or a handful of criminal organizations. You're saying it's a situation where this is normal.

JOVAN SCOTT LEWIS: No. I'm not saying it was normal. What I'm saying is that at a point it becomes read as a very easy mode of earning capital in the country. If you are unemployed or underemployed and if you have access to a mobile phone and you have access to phone numbers and you therefore have time, you can make phone calls. Now with that being said I didn't just work with lottery scammers during this time, I also got the impressions of everyday Jamaica. And in many ways Jamaican society, at least in Montego Bay I should say, was not supportive of the scam. And so that's why I wouldn't use the language of normalization.

DC: This is your home. This is this is where you grew up. What goes through your mind?

JOVAN SCOTT LEWIS: It's somewhat sad because what is interesting is the fact that you know in 2011 it was noted that Jamaicans scamming or lottery scam in Jamaica brought in over 200 million U.S. dollars into the Jamaican economy. Now could we say the same for the more formal development programs or apparatuses in the country and perhaps not. Right? Not in the same meaningful direct way. So, to my mind, that's one of the sad parts of this story. The other sad part, and that is the major sad part, is the fact that there are these victims on the other end of the phone line, who in many ways are having their lives completely disrupted if not destroyed. And that's what I would call the kind of broader circuits of impoverishment.

DC: You're saying that this is not an anomaly of the system but a product of it.

JOVAN SCOTT LEWIS: The absolutely.

DC: Jovan Scott Lewis thanks very much for joining us.

JOVAN SCOTT LEWIS: Thank you very much for having me.

DC: Jovan Scott Lewis is an assistant professor in the departments of African-American studies and geography at the University of California Berkeley. And we reached him in Berkeley California. Now the Jamaican phone scam has also targeted Canadians. Agnes Frechette is a 72 year old in Winnipeg who was one of those Canadians at the receiving end of the phone calls.

SOUNDCLIP

He told me exactly where he found me. And because of him knowing nothing about me, I let him talk to me for about a whole week. He talked to me and he was very nice on the phone.

DC: But then, Agnes Racette says those things took a turn when the scammer kept calling pressuring her to send more and more money.

SOUNDCLIP

He said that I was not listening to him and I never came back with the money fast enough for him. So he was going to punish me and you find yourself getting weaker everyday and you don't want to tell anybody because it's so embarrassing.

DC: Agnes says she ended up losing her life savings to the scammers. She sent them $6,000 by a Western Union to Jamaica and says she has not recovered financially. Jessica Gunson tracks these phone calls. She is the acting call centre and intake unit manager at the Canadian antifraud centre, which is an RCMP led operation jointly operated with the Ontario Provincial Police and the Competition Bureau of Canada. It collects information and criminal intelligence on various types of fraud. Jessica Gunson is in North Bay Ontario. Hello.

JESSICA GUNSON: Good morning.

DC: You've heard that tape and it's heart wrenching from Agnes Frechette. How common is her experience?

JESSICA GUNSON: Unfortunate I think it's more common than what is reported to our center. And our call takers here unfortunately speak with people like Agnus every single day who have lost their life savings. It is very sad and something that she said that really stuck out for me is that it was embarrassing. And I think that's a common trend with victims of fraud is that they are embarrassed or ashamed that they've fallen for the scam and they don't know who to turn to.

DC: But there must also be a limit to what you can do. These are these are often crimes being perpetuated from other countries. It's hard to just reach the arm of the law or cross boundaries.

JESSICA GUNSON: Absolutely there's great challenges there. And that's why it's important that offices like ours that will collect information from victims of fraud and Newfoundland to victims of fraud in Vancouver that may be falling for the same scam. What this allows is for us to go through that information collected from all the reports that we receive here from consumers. So listen this is a real problem. But here's where the focus seems to be.

DC: Whether it's the lotto scam that began in Jamaica, as we've heard, in 2010 or the CIA, the Canada Revenue Agency scam or the tech support scam there's all sorts of them that are targeting Canadians. What are the chances that those Canadian victims will ever see any of their money?

JESSICA GUNSON: Well unfortunately the chances are slim because the fraudsters are very good at insulating themselves. They will use technology to their advantage, [unintelligible] payments by Bitcoin. So in cases where investigators could follow the money that now adds a layer.

DC: Makes it that much harder.

JESSICA GUNSON: Very very difficult.

DC: You know there's a financial impact but there's also a psychological impact. We're hearing about people who were being threatened at their door. They feel scared. What happens to those who are victimized by this after it's over?

JESSICA GUNSON: If they're suffering in silence and it sounds [unintelligible] if we look back to Agnus, how she sounded so very much alone and desperate and didn't know where to turn. Consumers may lose their money but there's also that emotional component to it. It can economically impact their lifestyle, moving forward.

DC: You can't financially recover.

JESSICA GUNSON: Exactly. How am I going to eat? Where am I going to live? What if my children find out? Sometimes we're dealing with a cognitive impairment with victims of fraud and they don't realize that they're being scammed. So again another challenge.

DC: I can hear people talking in the background as you talk to me. Are those calls coming into the antifraud center?

JESSICA GUNSON: Yes unfortunately I couldn't find an empty office. The voices that you hear those are all fraud specialist call takers here speaking with potential victims or victims of fraud.

DC: When you think about those calls that are coming in now, do we have a sense, just the lotto scam that's just one of the scams that's out there, we have a sense of how much has been taken just from Canadians?

JESSICA GUNSON: So when we backtrack we know that there was back in 2010, when these kind of started with that connection to Jamaica, the numbers were much higher. We have seen that steadily decrease since then.

DC: What does that mean though? Does it mean fewer people are reporting or that people are getting savvier and not handing over money? Do we know what it means?

JESSICA GUNSON: We don't we hope that, when I try to be optimistic here, we hope that consumers are recognizing the scams and realizing that this is not real. So that when they are faced with a scam they know to hang up the phone delete the e-mail. Fraudsters, they're like the stray dog in your neighborhood. Once you feed them once they're going to continue to come back and they're going to ask for more food.

DC: Jessica Gunson thanks very much for the conversation.

JESSICA GUNSON: My pleasure.

DC: Jessica Gunson is the acting call center an intake unit manager at the Canadian Anti Fraud Center and we reached her in North Bay Ontario. Well that is our program for today. Stay tuned to Radio One for Q. Poet Kwame Alexander is on the show. And remember you can always take the current with you to go on the CBC Radio app. It's free from the App Store or Google Play. Finally after our discussion about rising interest rates and living with debt let's end with some music from Lou Reed. Here he is covering the Woody Guthrie song the debt I Owe. I'm David Common in for Anna Maria Tremonti. Thanks very much for listening to The Current.

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[Song: The Debt I Owe]

Thursday October 24, 2018 Full Transcript

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