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Protect your business from fraud — Five myths about fraud

Myth 1: Fraud isn't a real problem for my business

Fact: Actually, it is.

According to PwC Canada’s Global Economic Crime and Fraud Survey 2020, 47% of Canadian organizations had experienced some form of fraud in the previous 24 months. BDO Canada estimates that fraud cost Canadian businesses more than $30 million in 2017.

The impact of falling for fraud can hurt your business in terms of lost money, compromised confidential information, and wasted time. It can also impact your customers if your services are interrupted or their personal information is compromised. Fraud can ultimately hurt your reputation, your brand, and your bottom line, but there are steps you can take to protect your business.

Myth 2: Scammers are obvious

Fact: Scammers can be very convincing, and they fool a LOT of people.

In 2020, the Canadian Anti-Fraud Centre reported that Canadian consumers and businesses suffered losses of more than $104.2 million to fraud. Don’t blame yourself for not catching on if it happens to you. Fraudsters often use the following tactics against businesses because they have worked over and over:

Learning about different types of scams and understanding the methods and behaviours that scammers use are the best ways to avoid being scammed. Arming yourself with good information will go a long way toward protecting your business.

Myth 3: Scammers aren't interested in small and medium-sized businesses

Fact: The Canadian Federation of Independent Business found that one small business out of every five had been victimized by fraud in 2019, at an average cost of $6,200 each.

Considering that up to one third of small businesses experience one or more fraud attempts each year, it is worth putting effective preventative measures in place and giving employees specific training on how to recognize, reject, and report fraud.

Myth 4: It's not worth reporting fraud

Fact: It is extremely important to report fraud of any kind, and your report remains confidential.

There are many reasons why businesses choose not to report fraud. They may fear it will jeopardize their reputation or require too many resources relative to the loss, or that it is just too minor to warrant involving the police. In fact, any fraud report to law enforcement in Canada remains confidential, and even seemingly minor efforts to scam a small business can provide authorities with important information.

Reporting fraud provides the authorities with one of their best resources for identifying current scams, seeing who is being targeted, gathering evidence to disrupt or shut down the fraudulent operation, and protecting businesses in Canada from being victimized by fraud.

Law enforcement may not be able to act immediately, but all reports can be used for investigations, to identify trends, and to warn others (through alerts and other public education). Reports can also be shared with other law enforcement partners.

Myth 5: Fraud is a one-time thing

Fact: Actually, this isn't the case.

Statistics show that once you’ve been scammed, the chance of your business being targeted again is higher. Once a business (or consumer) has fallen for a scam, you’re both likely to be placed on “sucker lists". So, while it may be tempting to write off the impact of one scam as part of the cost of business and move on, we strongly recommend that you pause and think about what measures you might take to reduce the likelihood of being scammed again. For example, training your employees to recognize fraud can provide a first line of defence against being caught either in the same scam again, or in a new and different one. Scammers don’t differentiate their targets when it comes to taking your money. There’s a scam out there for everyone.

Examples of actual scams

The following examples show the extent to which fraudsters will go to target people at their business. To protect individual privacy, the names of the individuals and companies have been changed.

Further reading

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