If you want to protect your business from setbacks like these, it\u2019s critical to think about proactive steps \u2014 like training your staff to recognize fraud attempts, and opting for payment methods that can help prevent your business from being exposed to unnecessary risk. <\/p>\n\n\n\n
To help you renew your focus on fraud prevention, below are six examples of common scams that target Canadian small- and medium-sized businesses. Underneath each type of scam, click to reveal some ways to help avoid falling victim. What steps do you need to take to protect your business? Keep reading to find out.<\/p>\n\n\n\n <\/p>\n\n\n\n Many email accounts are compromised without the owner knowing it. That means fraudsters have stolen the password, and they can log in and lay in wait for messages that would be lucrative to intercept \u2014 like a notification of a money transfer, which they may try to divert into their own accounts.<\/p>\n\n\n\n To help prevent email account takeover, change your email passwords regularly (every few months is recommended) and use multi-factor authentication for your accounts. Try to observe if there are any missing emails or problems with your email account. It’s possible that email forwarding has been configured without your awareness, causing your emails to be redirected to another account \u2014 so check your mail forwarding settings every once in a while.<\/p>\n <\/p>\n For added security around money transfers, set up Interac e-Transfer Autodeposit<\/a>. It can help you avoid the risk of having your funds intercepted and diverted<\/a> by fraudsters through your email accounts, because the funds are directly deposited into your bank account with no additional steps.<\/p>\n <\/p>\n If you don\u2019t have Interac e-Transfer Autodeposit set up, always protect your transactions with strong security questions and answers that can\u2019t easily be guessed or found \u2013 and make sure you share them via a safe channel (in other words, a channel that\u2019s different from the one you send the transfer on).<\/p>\n<\/div><\/li> <\/ul>\n <\/div>\n <\/div>\n <\/div>\n<\/section>\n\n\n <\/p>\n\n\n\n \u201cPhishing\u201d refers to messages that try to trick the recipient into providing sensitive information that can be used for fraudulent purposes. For example, the fraudster sends you a link in an email that looks like it comes from your financial institution, and it sends you to what looks like a login page for their online banking service. If you enter your account login and password, you\u2019re actually handing it over to the fraudster.<\/p>\n\n\n\n Whenever a message appears to be from your financial institution, stop and scrutinize<\/a> it carefully \u2014 look for URLs in the email address that don\u2019t match the official one. Fraudsters try to make their messages look legitimate by using company logos and colours, but they often make mistakes, leading to telltale signs of fraud<\/a> \u2014 like errors or strange typos in the text of an email notification. Another common error in phishing emails is the \u201c$\u201d sign appearing after the amount, instead of before it.<\/p>\n <\/p>\n When you receive an unsolicited email, avoid clicking any links. If you\u2019re in doubt about its authenticity, get in touch with the organization in question (like your bank or credit union). Don\u2019t reply to the email; use another channel to get in touch (the phone, for example) and ask them whether there is indeed a message for you or an action you need to take.<\/p>\n<\/div><\/li> <\/ul>\n <\/div>\n <\/div>\n <\/div>\n<\/section>\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n Chargeback fraud happens when a cardholder identifies a genuine credit card purchase as fraudulent and disputes it, resulting in a refund (in other words, a chargeback for the merchant) \u2014 for a service or item that they actually did purchase.<\/p>\n\n\n\n Sometimes an honest mistake is involved \u2014 for example, a parent disputes a charge when their child made the purchase without telling them. In these cases, chargeback fraud is called \u201cfriendly fraud.\u201d A mistake can also happen if the customer doesn\u2019t recognize your business\u2019s name (or forgets about the purchase) when they look at their credit card statement, and disputes what they think is a fraudulent charge.<\/p>\n\n\n\n Purchases made with stolen cards can result in chargebacks down the line, when cardholders report the fraudulent purchases. Avoid risky transactions, like taking credit card information over the phone, because it can be difficult to confirm who\u2019s actually on the other end of the line. Other scenarios that can hint at a stolen card being used are shopping sprees, and sales from customers who provide a few different declined account numbers before finding one that works.<\/p>\n <\/p>\n As for preventing friendly fraud, make sure your business name as it appears in credit card transactions is one that customers would recognize \u2014 so that they don\u2019t mistakenly dispute a charge for something they purchased.<\/p>\n <\/p>\n In the bigger picture, why not avoid chargebacks altogether by encouraging customers to use a payment method that doesn\u2019t involve any, like Interac Debit<\/a>?<\/p>\n<\/div><\/li> <\/ul>\n <\/div>\n <\/div>\n <\/div>\n<\/section>\n\n\n <\/p>\n\n\n\n In a special twist on phishing, scammers pretend to be a colleague of the target and tell them to do something that would harm the business \u2014 like sending money to the fraudsters. Canadian businesses reported $26-million worth of financial damage<\/a> to the RCMP due to business e-mail compromise in 2020.<\/p>\n\n\n\n To lend an air of authority to the request, scammers often create a fake email account to impersonate the company\u2019s leader (or they get access to the real account), so they can pretend to be the boss. This is called a \u201cCEO scam.\u201d<\/p>\n\n\n\n In another variation on the business email compromise scam<\/a>, the fraudster poses as an employee who wants to change their direct deposit payment information. If successful, the fraudster tricks the company into depositing the funds into an account they control.<\/p>\n\n\n\n Ensure your computer systems are secure, keep antivirus software up to date, and encourage all employees to use strong passwords to protect their email accounts from hackers. Make it a policy that employees must double-check that all major transactions are genuinely authorized, using a different channel from the original communication. (For example, by asking their manager face-to-face.)<\/p>\n <\/p>\n Take special care to ensure that you, as the business owner, and\/or any other company leaders, have multi-factor authentication protecting your inboxes (as everyone in your organization should). That will make it more difficult for people to hack into your account and impersonate you.<\/p>\n<\/div><\/li> <\/ul>\n <\/div>\n <\/div>\n <\/div>\n<\/section>\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n This is an older form of fraud that businesses are unfortunately still dealing with. Cheque fraud comes in a few different forms. Counterfeit cheques are made to look like real bank cheques. They\u2019re often convincing facsimiles, but some of the small details may be wrong. If you deposit them, they won\u2019t clear, meaning you won\u2019t receive the funds. Forged cheques are legitimate cheques that have been stolen, and are signed by the fraudster rather than the true account holder.<\/p>\n\n\n\n There are also overpayment scams, in which the fraudster posing as a customer writes a (counterfeit or forged) cheque for more than what he owes (sometimes under the guise of \u201cpaying up front\u201d), and then requests payment for the difference. When the cheque finally bounces, the business loses the funds.<\/p>\n\n\n\n Note that fraudsters can use money orders and bank drafts to attempt similar scams.<\/p>\n\n\n\n If you do accept cheques as payment, it\u2019s best to do so only with customers you know well. You\u2019ll also ideally be able to wait for the cheque to clear before you do any work or hand over any merchandise.<\/p>\n <\/p>\n When you\u2019re holding the cheque, look for signs of counterfeiting, like a lack of watermarks or other security features.<\/p>\n <\/p>\n If your business issues cheques, look at your banking account daily to make sure there aren\u2019t unauthorized outgoing payments. If so, it could be a sign that your cheques have been stolen.<\/p>\n <\/p>\n Of course, the simplest way to avoid cheque fraud is to not accept cheques in the first place. Make it your company\u2019s policy to send and receive money more securely by using a digital service like Interac e-Transfer for Business.<\/a><\/p>\n<\/div><\/li> <\/ul>\n <\/div>\n <\/div>\n <\/div>\n<\/section>\n\n\n <\/p>\n\n\n\n This scam is straightforward but it sometimes works: Fraudsters will send fake invoices to companies hoping they won\u2019t realize the trick and will simply pay them.<\/p>\n\n\n\n A variation on the scheme involves fraudsters pretending to be existing vendors, claiming that their account information has changed \u2014 they ask you to send money to their new account (which, of course, is actually the fraudster\u2019s account).<\/p>\n\n\n\n![\"\"](\"https:\/\/www.interac.ca\/wp-content\/smush-webp\/2024\/11\/INT_Safety-for-Small-Businesses_Safety-for-Small-Businesses_1080x1350_1_Safety-for-Small-Businesses_1-1-1024x662.png.webp\")
<\/figure>\n\n\n\n1. Email account takeover<\/h3>\n\n\n\n
\n
Click to find out how to guard your business against email interception fraud<\/h6><\/a>
2. Phishing scams<\/h3>\n\n\n\n
\n
Click to find out how to guard your business against phishing<\/h6><\/a>
![\"\"](\"https:\/\/www.interac.ca\/wp-content\/smush-webp\/2024\/11\/INT__Safety-for-Small-Businesses_2-1024x662.png.webp\")
<\/figure>\n\n\n\n3. Chargeback fraud (including \u201cfriendly fraud\u201d)<\/h3>\n\n\n\n
\n
Click to find out how to guard your business against chargeback fraud<\/h6><\/a>
4. Business Email Compromise<\/h3>\n\n\n\n
\n
Click to find out how to guard your business against business email compromise , including CEO scams<\/h6><\/a>
![\"\"](\"https:\/\/www.interac.ca\/wp-content\/smush-webp\/2024\/11\/INT__Safety-for-Small-Businesses_3-1024x662.png.webp\")
<\/figure>\n\n\n\n5. Cheque fraud<\/h3>\n\n\n\n
\n
Click to find out how to guard your business against cheque fraud<\/h6><\/a>
6. Phony invoices and payment change schemes<\/h3>\n\n\n\n