Fraud Prevention Month is an annual campaign that seeks to help you recognize, reject and report fraud.
This year’s theme, Tricks of the trade: What’s in a fraudster’s toolbox? will help Canadians recognize the increasingly sophisticated tricks and tools scammers use to entrap victims.
Protect your business from fraud – what Canadian businesses should watch for
The best way to prevent your business from becoming a victim of fraud is for you and your employees to be informed and vigilant. Get to know the different types of scams and always report instances of fraud to the police, the Canadian Anti-Fraud Centre, or the Competition Bureau.
Scammers have well-developed skills and techniques. They know exactly which strings to pull to trigger emotions and reach our common values. In particular, they rely on the expectations that we will trust what we see, that we will respond to threats with fear, and that we can be fooled because we don’t know their tricks. To counter these expectations, you need to:
- Be skeptical of unsolicited calls, spam emails and texts, mailed letters, and faxes – it is increasingly easy for scammers to make emails, logos and websites look like they were sent from a legitimate source (known as “spoofing”)
- Refuse to be victimized by threats to your bottom line, to your credit score, or to your brand and reputation – end the communication right away and call the police
- Learn their tricks – lack of knowledge about the methods scammers use gives them a huge advantage, but this advantage can easily be lessened or removed through education and awareness – this is one of the main reasons why sharing information and experiences with other businesses and within your industry could be crucial to the fight against fraud.
Some of the most common techniques scammers use to lure their targets into falling for their tricks are described below. If you and your employees become familiar with these tricks, you will all be better prepared to ask the right questions the next time you get a cold call or unsolicited email or text.
|Urgency||The scammer offers a special low rate, often implying that it is a “one-time” or “limited time” offer from only that caller, to entice you to pay immediately.
|Creative name use||The scammer gives you their first or last name (likely made up) to establish a sense of comfort and familiarity, and then claims to be from a company with an impressive name that sounds large.
|Authority||Scammers borrow credibility from an outside source. Some examples of an authority script: “we’re registered with the government as the official supplier of…” or “you are required by law to buy this…”.
|Reciprocity||This technique involves offering a prize, a special price, or some other privilege in return for you sending money or confirming an order.
|Foot in the door||This involves getting you to agree to some small purchase and then surprising you with larger commitments later.
|Pitch a better deal||This involves the scammer offering you something very expensive, expecting you to balk at the price. They when they offer you a cheaper alternative, the second option seems so much more reasonable that you don’t pause to check on whether it is actually a good deal or not.
|Initial agreement pressure||Early in the pitch, the scammer asks you a question such as “do you like to save money?” then later your response is turned around and reframed as a commitment to make a purchase: “you said you liked to save money!”
|“Altercasting”||The scammer places you in a desirable and respected social role in the hope that your ego will prompt you to want to prove them right. “As a critical member of the organization, you should know…” or “are you the manager? Then you should have the authority to approve this offer now.”
|Professionalism||This technique plays on the target’s sense of integrity. If you say you’re not sure you placed an order, the scammer assures you that you did and provides details of the supposed contact during which the order was placed. The details are so specific and given with such confidence that it is difficult to disagree.
|Untraceable payment methods||Scammers often want payment through wire transfers, gift cards, Bitcoin and other cryptocurrency or digital currency. Basically, any forms of payment that are nearly impossible to reverse or track.|
At Arbutus Financial, we follow the guidelines of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to help ensure neither us nor our clients are the victims of fraud.
FINTRAC is Canada’s financial intelligence unit. Its mandate is to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control.
FINTRAC guidance and resources for businesses https://fintrac-canafe.canada.ca/guidance-directives/1-eng
What are the key obligations?
The obligations under the PCMLTFA and associated regulations requires certain businesses to have the following elements in place:
- Compliance program
- Know your client
- Transactions reporting
- Record keeping
- Money services business registration
If you would like to discuss these topics in greater detail or have any questions, please reach out to a member of your Arbutus Financial Team.