Top 5 common scams business owners should self-guard against

To better prepare business owners with the knowledge and tools to mitigate them, we've compiled some of the most common fraud and scam tactics that businesses should be wary of.

Top 5 common scams that business owners should self-guard against


Fraud is becoming more refined and harder to spot than ever before. Although, we’re familiar with fraud tactics on a personal level, there are new scams and familiar fraud tactics creeping their way into businesses. With March being Fraud Prevention Month, CWB has explored five common scams that target businesses and how best to prevent them.

Executive scams

This scam is a variance on what is commonly known as phishing. An email will be sent to someone specific in an organization asking for an urgent wire transfer or some financial information. The email will look very closely to what an actual email from a CEO or another executive in the company would send, right down to the email address. Fraudsters will either hack into the executive’s email or will buy a domain very similar to the name of the company they’re attempting to fraud. There are a few key ways of spotting and preventing CEO scams:

  • Inform your staff on these scams. The more they know about them, the more likely they will check email domains and follow-up with executives when these requests come through.
  • Ensure your computer systems have regularly updated antivirus software and that all passwords are strong to prevent any unwanted access to the system.
  • Create a multi-step authentication system of money transfers requiring signatures from more than one executive.

Cheque fraud

One of the oldest scams remains one of the most prevalent that businesses still face. This involves either creating fake cheques under someone else’s name and account or manipulating legitimate cheques to read different names and cash amounts.

The easiest way to prevent cheque scams is to adopt more modern and secure forms of fund transfers such as pre-authorized debit transactions or business wires.

For those who need to continue using cheques, there are a few things you can do to help protect yourself:

  • Keep all cheques in a safe place and shred any unused cheques from closed accounts.
  • Never accept cheques that look like they have been manipulated or are post-dated for deposit at a future date.
  • If a cheque looks suspicious, reach out to the financial institution where the cheque came from to confirm its legitimacy.
  • Always check your monthly account statements and follow-up on any transactions that seem out of place.

Bank inspector scams

In these scams, fraudsters come into possession of a name and phone number, and call the individual claiming to be a legal authority investigating illegal activity on the victim’s bank account. The fraudster then suggests the victim moves their money into another account either to assist in the investigation or to guarantee its safekeeping.

Though recent reports show that seniors are most often the victims, business owners can easily be targeted as well. Preying on peoples’ desires to help police investigations, this type of fraud is an example of telephone scams that steal millions of dollars from people and businesses all over Canada. There are ways to spot these kinds of calls and protect yourself:

  • Banks and police will never call you and ask for your banking information nor will they ever ask a civilian to participate in an investigation.
  • Bank information should only be given over the phone when you call your financial institution and you provide identity-verifying information that’s been predetermined with your bank.
  • When you’re being requested to withdraw large amounts of money, do so in either a bank draft or a money order.
  • Never hand over large amounts of cash to someone you don’t know.

Ransomware

Just like the name suggests, ransomware involves fraudsters holding digital files and personal information hostage unless a sum of money is paid for its release. What typically occurs is the victim downloads a file either by clicking an ad or opening an email attachment that’s been infected with malware or malicious software. This malware gives hackers access to your computer and all your files. These attacks often target businesses and have crippled major institutions such as the UK’s National Health Service. To ensure none of your digital files or information is held for ransom, there are a few ways to help protect yourself and your business:

  • Software like anti-viruses and email content scanners can help prevent any malware from being downloaded or even delivered to your computer system.
  • Back up files regularly so you have a second source of any digital files that could be locked away.
  • Never pay a ransom demand. There’s never a guarantee that the files will be returned.
  • Change your passwords regularly and ensure they mix upper and lowercase letters, numbers and special characters (such as !, # and $).
  • Don’t click any ads or email attachments that look suspicious.

Counterfeit currency

Counterfeit money continues to be an issue for businesses and individuals in Canada. In 2017, there were four times as many cases of counterfeit money investigated by police as compared to most typical years. Despite efforts by the Bank of Canada to develop bills with features difficult to copy, fraudsters are becoming more sophisticated in their efforts. More often than not, counterfeiters will copy $20 bills, passing them off to businesses quickly and generally during busy times. There are tips and resources available to help businesses and individuals know what to do when they encounter counterfeit currency:

  • The Canadian Bankers Association and the Bank of Canada have published guidelines on what to look for when verifying the validity of a currency note.
  • Counterfeit bills are typically passed off quickly. If you believe the bill is fake, stop and ask, even proposing a trained officer takes a look. Fraudsters normally will try to end the conversation or leave quickly.
  • If you believe you received a fake bill, report it and show it to trained police. If the bill is real, the officer will return it to you.

    Visit CWB’s fraud prevention page to find more information about ways to protect yourself from fraud. If you suspect a phishing scam, please report it to [email protected] or 780.423.8888.

    This article has been reviewed and approved by the Fraud and Special Investigations Service at CWB.