They say running a business is like being a juggler—except now, someone’s trying to steal your juggling balls while you’re mid-performance. And unfortunately, many Canadian businesses have experienced this first-hand with payment fraud becoming an all-too-common threat.
A new study from Payments Canada shows that 20% of Canadian businesses have fallen victim to payment fraud—higher than the 13% fraud rate for consumers. The most common types? Impersonator scams, intercepted e-Transfers, and credit card fraud.
How It Works:
Payment fraud tends to follow a few sneaky routes:
- Impersonator Fraud: Scammers posing as trusted business contacts (via email, phone, or text) trick businesses into sending money to fraudulent accounts.
- Intercepted e-Transfers: Fraudsters manage to reroute a business e-Transfer into their own account.
- Credit Card Fraud: Unauthorized charges made with stolen credit card information.
Businesses are particularly vulnerable due to the amount of sensitive data they handle and the lack of robust protective measures in smaller companies.
Who’s Targeted:
While businesses of all sizes are at risk, large commercial businesses report the highest rate of fraud at 26%. Smaller businesses are not immune either, with 16% affected by payment fraud. Industries relying heavily on digital transactions and e-commerce are prime targets.
Real-Life Example:
A Canadian business recently reported a scam where an impersonator, posing as a familiar supplier, convinced them to send payments to a new bank account. By the time they realized the error, the funds were long gone. And this is not a one-off—45% of businesses have noticed an increase in fraudulent emails and cyber activity aimed at tricking them.
Why You Should Care:
Whether it’s $50 or $50,000, losing money to fraud hits hard. For businesses, especially small ones, a fraud incident could mean damaged relationships with clients, operational downtime, and even loss of reputation. Payment fraud isn’t just a “big business” problem—it’s a threat to everyone.
How to Protect Your Business:
Here’s how to reduce the risk of payment fraud and keep your business safe:
- Verify before you pay: Always double-check the legitimacy of any payment request, especially if there’s a sudden change in banking details.
- Limit sensitive information: Avoid sharing unnecessary details online and only provide business info when required.
- Enable two-factor authentication: Whenever possible, use multi-factor authentication for banking and financial accounts.
- Check e-commerce sites: Always buy from trusted sites and thoroughly check the safety of any platform before making purchases.
- Update your passwords: Store passwords securely and avoid using the same one for multiple accounts.
Quick Tips:
- Did you know? Nearly 45% of businesses noticed an increase in suspicious email activity over the past year. Always be cautious of unsolicited messages asking for payment or account access.
- Pro Tip: If you receive a suspicious message or payment request, call the sender directly using a known number. Don’t trust contact details provided in the suspect message.
Have you ever encountered a payment fraud scam at your business? Tell us your story—your experience could help another business stay safe!
Stay safe, stay informed,
Key Terms Explained:
- Impersonator Fraud: A type of scam where someone pretends to be a trusted person or business in order to steal money or information.
- e-Transfer: An electronic method of sending money from one bank account to another, often targeted by fraudsters.
- Two-Factor Authentication: A security process where two forms of identification (like a password and a code sent to your phone) are needed to access an account.
- Phishing: Fraud attempts made through fake emails, texts, or calls to steal personal or financial information.
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