Fraud costs small businesses

Small Canadian businesses lose thousands of dollars each year to fraud. Education is the key to preventing it.

Fraud cost small Canadian businesses an average of $6,200 each in 2015, according to a recent Canadian Federation of Independent Business (CFIB) report. It found that one-third of small businesses have experienced one or more fraud attempts in the last 12 months, and one in five have fallen victim. Only 8 per cent of defrauded businesses recover their full financial costs.

Aaron Aerts, an economist in the B.C. office of the CFIB, says that one of the most important things small businesses can do is identify frauds. “Staff need to be trained, but most small businesses don’t spend enough time training. It’s much easier to prevent fraud than to follow it up.”

He said that the number one fraud employed against small businesses is payment fraud, where someone tampers with the credit card processing terminal. Another one is attempted e-mail scams. “Always be sure to check out your e-mails, and ask questions,” he says. “Frauds are getting pretty sophisticated.”

Another fraud that small businesses fall victim to is directory fraud, where businesses receive what looks like an invoice for a service, such as a Yellow Pages listing. Aerts advises businesses to be wary of any invoices that look suspicious. “Definitely be aware of directory fraud. The invoices can look legitimate, but they aren’t.”

People phoning small businesses to say that they are not compliant with health and safety or workplace bullying policies are another big fraud, says Aerts. “The caller will say that the business needs to get something in order to comply, and will say they can provide it for a certain amount of money per employee.” Aerts says that businesses end up paying for information that they could get for free from places such as WorkSafe BC. “If you need a written policy regarding, say, workplace bullying you can get a free template from the provincial government website.”

Aerts notes that the “non-compliance” fraud is a very prominent one when it comes to small businesses. “It works because the businesses want to be in compliance but don’t always have the time or manpower to investigate options.”

Many small businesses don’t report fraud because it’s time-consuming and stressful, says Aerts, preferring just to swallow the loss. However, he notes that it’s important to report fraud, and to make sure staff are aware of the various types of fraud out there.

“Don’t just take things for granted. If it smells fishy, check it out.”

For more information about preventing fraud go to  www.cfib.ca/BeFraudFree.

Just Posted

Ashcroft hospital emergency closed sign, 2016. Photo credit: Barbara Roden
Ashcroft Hospital emergency department closed this weekend

Closure due to unexpected limited physician availabiliy, says Interior Health

Residents line up outside the Vernon Recreation Complex for their COVID-19 vaccine Saturday, June 5. (Jennifer Smith - Morning Star)
No appointments necessary for first dose COVID-19 vaccine: Interior Health

People can just show up at clinics, register on the spot and get the shot

Heidi Roy of the Cariboo Jade Shop in Cache Creek with the 3,000 jade boulder, which is now on secure display inside the shop. (Photo credit: Barbara Roden)
Massive jade boulder returns to Cache Creek store six months after daring heist

The 3,000-pound boulder was stolen on Dec. 19, 2020 and found abandoned in the bush a week later

Dr. Albert de Villiers, chief medical health officer for the Interior Health Authority. (Contributed)
Child sex crimes charges against Interior’s top doc won’t impact pandemic response: Dix

Dr. Albert de Villiers is charged with sexual assault and sexual interference

At an outdoor drive-in convocation ceremony, Mount Royal University bestows an honorary Doctor of Laws on Blackfoot Elder and residential school survivor Clarence Wolfleg in Calgary on Tuesday, June 8, 2021. THE CANADIAN PRESS/Jeff McIntosh
‘You didn’t get the best of me’: Residential school survivor gets honorary doctorate

Clarence Wolfleg receives honorary doctorate from Mount Royal University, the highest honour the school gives out

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Flowers and cards are left at a makeshift memorial at a monument outside the former Kamloops Indian Residential School to honour the 215 children whose remains are believed to have been discovered buried near the city in Kamloops, B.C., on Monday, May 31, 2021. THE CANADIAN PRESS/Darryl Dyck
‘Pick a Sunday:’ Indigenous leaders ask Catholics to stay home, push for apology

Indigenous leaders are calling on Catholics to stand in solidarity with residential school survivors by not attending church services

“They will never be forgotten, every child matters,” says Sioux Valley Chief Jennifer Bone in a video statement June 1. (Screen grab)
104 ‘potential graves’ detected at site of former residential school in Manitoba

Sioux Valley Dakota Nation working to identify, repatriate students buried near former Brandon residential school

The Queen Victoria statue at the B.C. legislature was splattered with what looks like red paint on Friday. (Nicole Crescenzi/News Staff)
Queen Victoria statue at B.C. legislature vandalized Friday

Statue splattered with red paint by old growth forest proponents

Most Read