March is Fraud Prevention Month: Brush up on a scam that just won’t go away!

March 29, 2018 - Tags: Managing

This guest blog post is provided by the Competition Bureau, an independent law enforcement agency that ensures Canadian businesses and consumers prosper in a competitive and innovative marketplace. Headed by the Commissioner of Competition, the Bureau is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act and the Precious Metals Marking Act.

The pace of business keeps accelerating. As more business takes place online, things move much faster than before.  

While we continuously find new ways of doing business, the same old scams are still out there. Take the directory scam as an example. Fraudsters use traditional means like phone calls, faxes and letters to find their victims. They are always looking for opportunities to steal your hard-earned money.

In a typical directory scam, fraudsters send your company a proposal for a listing in an online directory. They usually speak to an employee and ask them to confirm details such as your address, telephone number and other information. They then followup with an invoice to your accounting department. Unaware that your company never actually ordered or authorized the service, the accounting department pays the bill.

In another variation of this scam, the fraudsters pretend to be your usual wholesale supplier. They send you a letter, give you a call or send you a legitimate-looking email that requests information due to a change in payment arrangements. Not realizing that this is a fake request, many companies fall victim by providing their banking details.

Things you can do to avoid this old scam:

  • Educate yourself, your employees and your co-workers. You need to be cautious about unsolicited calls and emails.
  • Use the Competition Bureau's FACT: Fraud awareness for commercial targets to learn more about scams that may target your business and to find how to protect yourself.
  • Beware of calls or emails from individuals presenting an urgent situation requiring immediate attention.
  • Create a list of companies that you do business with and include a calendar of payments as well as your suppliers' detailed contact information.
  • Before paying an invoice, find your supplier's contact information through a trusted source and get in touch with them to confirm that the request is legitimate.
  • Limit the number of staff who can approve purchases and pay invoices.
  • Clearly define procedures for verification, payment and management of accounts and invoices.

If you've been scammed or targeted by a fraudster, it is essential that you report it. Always seek advice and provide as many details as possible to the authorities. This will give them the means necessary to take action.

Find more information about this scam and other scams that target businesses in the Competition Bureau's Little Black Book of Scams, 2nd edition and on the Canadian Anti-Fraud Centre's website.

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