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Fraud Hits One in Five Canadian Small Businesses

Wolf im SchafspelzFraudsters have scammed 20 percent of Canadian small businesses in the past year, according to a report from the Canadian Federation of Independent Business, which takes more than 27,000 calls each year from small business owners.

“Fraud is a serious threat to unsuspecting small businesses and an ongoing challenge for our economy,” said Plamen Petkov, CFIB vice-president, Ontario and Business Resources. Small businesses impacted by fraud last year lost, on average, $6,200 to scammers. More than half of those business owners say the stress and hassle were worse than the financial losses, citing lost time, stress, and a negative impact on staff morale.

“Knowing what to look for is the key to prevention,” Petkov said.

CFIB identified some of the most common scams, warning signs, and tips to avoid them.

Credit Card Fraud

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What to watch for:
1. Larger than normal orders
2. Orders that include more than one of the same item
3. Orders made up of only “big-ticket” items
4. Customers insisting on rush shipping
5. Shipping to international addresses, especially when that is not a normal transaction for the business
6. Customers using multiple credit cards, but shipping to the same address
7. Orders on the same card, shipping to multiple addresses

What to do:
1. Use chip and PIN whenever possible.
2. Don’t be afraid to ask for ID—remember you are protecting the customer too.
3. Verify card security features (raised numbers and text, hologram, signature).

Directory Fraud

What to watch for:
1. Addresses that don’t make sense
2. Invoices that don’t include reference numbers

What to do:
1. Do not call the number on the invoice you have received
2. Do a separate search for the actual company’s phone number
3. Call them and reference the invoice number; they will be able to confirm whether or not the invoice is valid
4. Ensure there are no demands for payment in the fine print.

To read the full report, visit

Have you run into any fraudsters? Tell us about your experiences in the comments below.

Katie Hendrick
Katie Hendrick is the editor-in-chief of Canadian Florist.

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