Fraud Alert: Beware of this new threat from cyber-thieves!

One out of every five small businesses has been victimized by fraud. Find out how to protect your business from some of the most common types of fraud.

Porting Scams

Your phone rings…the next thing that will happen is that your phone line will go on hold and then the line will suddenly go dead. Now they’ve got you…

You get a text message which reads: "Rogers has received a request to transfer your phone number to another Service Provider. If you did not authorize, contact Rogers urgently..." and goes on to provide a toll-free telephone number. It seems like a little fishy, but it can’t hurt just calling the number to make sure, right? Wrong!

Once you dial that number, cyber-thieves are able to use your phone account to change your email passwords and access your banking information. With access to your phone number and the ability to receive and send messages, thieves can override what's known as two-factor authentication used to secure accounts. Two-factor authentication allows a consumer to receive a text message with a code to prove they are the authorized account holder.

Credit Card Fraud

Credit card fraud is one of the most common types of fraud that you can face.

Card present fraud is when the credit card is physically present during the transaction. According to Stats Canada, most retail fraud is done in person. 

Card not present fraud simply means the credit card is not physically present during the transaction this includes transaction is done over the phone or online. According to the RCMP, this is one of the fastest growing types of fraud in Canada.

Tips to protect your business from credit card fraud

• Know your rights and responsibilities when accepting credit cards
• Create awareness. Train your staff to recognize fraud with the help of our free poster (see related documents on the right).
• Adopt a policy that credit cards transactions will NOT be taken over the phone.
• Look into e-commerce solutions that provide proper security for online transactions.
• Require customers picking up product to provide ID or the credit card that was used to authorize the transaction.
• Refuse to take credit card payments where the chip and PIN can’t be used.
• Always ensure your POS systems are chip-enabled. You can do so by contacting your Acquirer/Payment Process.

Internal Fraud

Internal fraud is also known as occupational fraud, workplace fraud, and employee fraud can encompass a range of activities from outright theft, falsifying accounts, to even abusing flexible working hours.
Three ways to protect your business

• Use pre-employment checks: Set yourself off on the right foot from the beginning. Upon hire, criminal background checks are not always necessary, but make sure to always verify references. You may also wish to see certificates/diplomas of courses completed to verify that the potential employee has the qualifications they claim to have.
• Monitor your employees’ performance: Use communication to be aware of workload, stress levels and goal reaching. Set internal management policies that help employees understand their expectations and that you have an awareness of daily ins and outs of the business.
• Identify the most valuable assets of your company and think how to protect them: This could be sales information, internal processes and procedures, intellectual property, proprietary software, customer information, etc. A privacy policy can help prevent information leaks and a non-competition clause in an employment contract can protect your business if an employee moves on.

Directory fraud, false invoicing and office supply scams

According to the Competition Bureau’s Little Black Book of Scams, directory fraud, also known as unsolicited advertising, is one of the most common types of fraud committed against small businesses.

How to spot the fraud:

• Carefully inspect the name of companies on invoices: they might seem familiar but often will have a slight variation.
• Check for addresses that don’t make sense, like international listings.
• Check for invoice references or numbers. If it doesn’t have one, it could be a scam.
• Do not call the number on the invoice you have received; instead, do a separate search for the actual company’s phone number before contacting them.
• Ensure there are no demands for payment in the fine print.
• Be vigilant in training staff to be aware of these types of scams.
• Don’t give out information about your business unless you know how it will be used.
• Never agree to anything over the phone – always get it in writing.
• Do not open parcels you aren’t expecting or from companies you don’t recognize.
• If someone is trying to collect on an invoice you suspect is fraudulent, request a copy of the contract or agreement the company is referencing. If they cannot produce a contract with your written signature on it, their claims are invalid. Sometimes companies will forge the signature of employees or former employees, many of which do not even have signing authority for the business. No signature; no contract; nothing owed.

The Competition Bureau of Canada published The Little Black Book of Scams to help you avoid becoming a victim of scams. Scammers will try to collect personal or financial information from you and your business using phone calls, in-person visits, e-mails, or software. The booklet provides hints on how to identify scams and contact information for reporting them to the correct authorities.