5 Scams You (Might) Have Already Been Defrauded By

February 6, 2018 Caitlin McElwain

In Canada, about six retailers out of 10 are the victims of at least one fraud each year.1 And contrary to what you may think, employees are not the source of most frauds. Here are five types of retail fraud you should be on the lookout for and five ways to protect yourself.

1. “Overpayment” to a client

A client calls to get some information on your products and services. You do your job as a salesperson, and the client gives you a nice big order. The client makes a mistake, however, and hands you a cheque for an amount that exceeds the agreed-upon amount. No problem. You cash the cheque and refund the excess amount to the client through a bank transfer. Unfortunately, the cheque bounces for non-sufficient funds (NSF), but you’ve already “refunded” the client with cold, hard cash.

To protect yourself against this type of fraud: Do not refund anything until you receive confirmation that the cheque has cleared. Or simply reject the first cheque and ask the client to write another one.

2. False advertisements and false directories

This is a classic technique for defrauding small- and medium-size enterprises (SMEs): An individual contacts you to update your information for some free advertising or a free directory. What merchant would say no to free advertising? The catch is that your business will also be registered in a very expensive paid directory! The fraudster will be able to “prove” that you placed the order, by producing the telephone statement where the call is recorded and by referring to any information you provided that has not been made public. The fraudster will even be able to show you your registration or your real advertisement in a directory...that no one sees.

To protect yourself against this type of fraud: Deal only with recognized publications and check the real identity of the salespeople who contact you by phone.

3. Overpriced office supplies

You receive a call from your office supply company. The salesperson wants to talk about a special offer or confirm an order. The caller is, in fact, a fraudster who will bill you for office supplies at exorbitant prices.

To protect yourself against this type of fraud: Verify that the order is real, and never provide your banking information to anyone who calls you. If he claims to work for a recognized company, ask for his name and call the company back yourself once you’ve confirmed the phone number on the company’s website.

4. Counterfeit money

It’s the busiest time of the day, clients are lined up and you don’t know where to turn. A client hands you a large banknote to pay for a small purchase, and you give back the change without checking if the banknote was a fake. If it is, you cannot deposit the note at a bank or get reimbursed for it. Counterfeiting is more widespread than we think: in 2013, over $500,000 in fake banknotes was seized in Canada.2

To protect yourself against this type of fraud: Check the banknotes for every transaction settled in cash, and train your employees to know what to look for. The Bank of Canada provides simple instructions on how to detect counterfeit banknotes. It only takes a few seconds to confirm that a banknote is legal tender.

5. Anti-virus software
A technician from the company that makes your anti-virus software, another software or even your operating system calls you because a problem has been detected. Just your luck – the solution is free! All you have to do is download a small application that the technician will use to fix the bug in only a few minutes. The truth is, there’s nothing wrong with your computer, and once you download the application, the fraudster will have access to highly sensitive data, like your bank account password.

To protect yourself against this type of fraud: Be cautious of anyone who calls you about a computer problem, even if something is actually wrong with your computer. IT security firms or software companies do not make this type of phone call.


1 According to Statistics Canada, 57% of retailers were the victims of fraud in 2008. http://www.statcan.gc.ca/pub/85-571-x/2009001/part-partie1-eng.htm


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