The scheme starts with a phone call and a frightening message.

You’re about to be arrested for tax fraud or deported from the country—unless you head immediately to a Bitcoin ATM and pay a fine or fee.

The person on the other end of the line is neither a Canada Revenue Agency agent nor an immigration officer, but a criminal looking to defraud you, according to a statement from Toronto police on Friday.

Toronto police issued a warning after noticing “a significant increase” in calls from victims who report having been defrauded of thousands of dollars in this way.

The phone calls often come from fake numbers created online through technology that allows the perpetrators to change phone numbers and spoof caller IDs.

This technology makes it challenging for law enforcement to track down the numbers, but the task becomes even more difficult if the schemes operate overseas.

While similar schemes have been around for a number of years, the requested method of payment is changing.

“In the past, [the scammers] would ask people to send wire transfers or to buy iTunes cards,” Det. Sgt. Ian Nichol with the Toronto Police Service’s Financial Crimes Unit told “People would take the number off the card and then send it to the person involved, and it would find its way onto a website where it would be sold for profit.”

Now, scammers are asking victims to make their payments in Bitcoin or other cryptocurrencies.

Bitcoin is an almost perfect instrument of crime, Nichol said.

“One of the advantages of using Bitcoin is that once you pass it along to another e-wallet, it is very difficult—if not impossible—to trace,” Nichol said. “There are some possibilities that we can exploit, but if the wallet happens to be located outside of the country, our chances of identifying the person who is receiving the funds is next to none.”

Toronto police do not have statistics on the number of victims of such crimes, but say that there has been “an uptick” in reports from victims.

In Edmonton, police say that 111 people reported falling victim to the CRA scam from January 2017 to February 2018, and said that fraudsters took more than $300,000 from them. More than 75 per cent of the cash that went to the perpetrators during that time was sent using Bitcoin.

Part of what makes these crimes so difficult to track, Nichol said, is that the vast majority of them go unreported.

“The people who are victimized by it actually believe that they are in some kind of difficulty and don’t question it,” Nichol said. “When they do figure it out, they are less inclined to report it out of embarrassment. Many of them don’t even know that they have been victimized.”

Toronto police stressed that the CRA does not send payment notices or ask for personal information through phone calls, text messages or emails, and added that it will never ask for payment of a fee or fine in Bitcoin or any other cryptocurrency.

“The CRA will never, ever phone you up and threaten to throw you in jail,” Nichol said. “It will never happen.”

Toronto police is asking anyone who may have been a victim of such schemes to contact the police and is advising shop owners with Bitcoin ATM machines to display messages on their machines warning users about the existence of these schemes.