Business fraud in Canada, ways to prevent scams IG News

IG news Update,

Many Canadians are subject to fraud and scams every year, and to coincide with Fraud Awareness Month in March, takes a look at some red flags for individuals and businesses.

An Ipsos survey shows that many Canadians are falling victim to fraud, with the most common being credit card fraud, email/phishing scams and debit card fraud.

The online survey, commissioned by the Chartered Professional Accountants of Canada, a national body representing accountants, found that 43 per cent of Canadians surveyed have been victims of at least one type of fraud. Ipsos surveyed 2,005 Canadians aged 18 or older between January 3 and 5 this year.

Fifty-four percent of respondents said they reported a fraud situation to their financial institution, while 27 percent told a family member they had been defrauded. Another 22 percent shared the news that they had been victims of fraud with friends.

Some (17 percent) who were scammed contacted the organization where they believed the fraudulent transaction was made.

These findings are of concern to Douglas Kalasnikoff, associate professor at the Edwards School of Business at the University of Saskatchewan, who said if businesses are able to spot red flags and prevent fraud it could help reduce the risk for all Canadians. Can

“Somebody could be scamming your business and you don’t even know it,” he told on Friday. “The company needs to have a good way to monitor how things are going with its various customers.”

In some instances, businesses may not immediately realize that their company is being misrepresented by fraudsters. As more Canadians are becoming aware of scams targeting them, Kalesnikoff says there are a few things to watch from a business perspective.

what are the red flags

Fraudsters can target businesses with the same broad range of tactics as individuals. Some scammers may use threats to intimidate or entice a business into sending money or sharing personal information.

The Canadian Anti-Fraud Center made a list of scams affecting businesses in Canada including extortion threats, bomb threats, falsely billing a company, stealing an executive’s email address for wire fraud, ransomware attacks and many more are included.

Kalesnikoff says one of the most common scams that strike businesses is the temptation to overpay or falsely bill a company. In this instance, an employee may incorrectly pay for a service or product.

“Many times some of the fraud in businesses is done by the employees of the business,” he said.

Kalesnikoff says employees can take inventory, money or make “special arrangements” with the supplier.

“Often, businesses are not only dealing with who they are interacting with externally – with suppliers and customers – but also internally, with employees … Are they potentially committing fraud?” Kelesnikoff said.

This is one of the red flags to see where and with whom the company is negotiating and whether they are taking any threats seriously. To do this, Kalesnikoff suggests that businesses have a feedback system in place.

“By reviewing these surveys, you may be able to figure out (if) there seems to be an issue that customers are concerned about,” he said.

Listening to suppliers and monitoring the reputation of a business can help determine if a company is being misrepresented. Kalesnikoff said that this type of scam can also show financial indicators.

“If you are also paying more than what you should have paid for your goods because someone’s supplier is cheating you… it will reflect in your profitability, how profitable you are,” he said.

what are the preventive measures

Kalesnikoff says a whistleblower hotline is helpful, where other employees can report suspicious activity.

“So a lot of times, companies will know that some fraud is happening because a fellow employee is watching someone else do something,” he said.

However, in order to prevent employees from committing fraud, Kalesnikoff says it has to be set within company ethics.

“For example, let’s say they (the company) put a lot of pressure on their salespeople to make certain sales goals,” he said.

What could happen in this scenario is that employees “could cut corners or make false representations to customers,” Kalesnikoff said. “An organization has to be careful about what kind of compensation plan they have or what kind of motivation they are giving to the employees,” he added.

More businesses in Canada are subject to ransomware attacks, such as Indigo Books & Music Inc., where hackers attempt to extort money or personal information from customers or employees.

As technology becomes more sophisticated, Kalesnikoff says companies must invest money and energy in preventing such cyberattacks.

“It comes down to a real system of making sure you have controls and firewalls and the security of your information,” he said. “And (that) you have an appropriate staff of knowledgeable individuals who are looking at possibilities and making sure that their systems are secure.”

What to do after getting scammed

The Canadian Anti-Fraud Center (CAFC) says the first thing to do after being scammed is to “collect your thoughts” and “keep calm.”

Individuals and businesses are encouraged to collect all information about fraud including copies of documents, receipts and email or text messages.

Then, victims of fraud should contact their financial institution to report the incident so that the account can be flagged and passwords can be changed. CAFC asks people to report fraud to credit bureaus Equifax and TransUnion and to CAFC.

“Businesses should have a fraud response plan,” Kalesnikoff said. “Usually, what you want to be able to do about it is investigate what happened, how it happened, how you can prevent it from happening again.”

Kalesnikoff encourages businesses to monitor social media and be “cognizant” of what’s going on to ensure fraudsters don’t target the company again.

“Listen to what your employees are saying, listen to what customers are saying,” he said.


Contact the Canadian Anti-Fraud Center at 1-888-495-8501 or through the Fraud Reporting System.

Equifax: 1-800-465-7166. After selecting the language, say “cheat” or press 3

TransUnion: 1-800-663-9980 and select option 3 for the Interactive Voice Response (IVR) system to submit your alert.


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