The best way to prevent your business from becoming a victim of fraud is for you and your employees to be informed and vigilant. Get to know the different types of scams and always report instances of fraud to the police, the Canadian Anti-Fraud Centre, or the Competition Bureau.
Scammers have well-developed skills and techniques. They know exactly which strings to pull to trigger emotions and reach our common values. In particular, they rely on the expectations that we will trust what we see, that we will respond to threats with fear, and that we can be fooled because we don’t know their tricks. To counter these expectations, you need to:
- be skeptical of unsolicited calls, spam emails and texts, mailed letters, and faxes—it is increasingly easy for scammers to make emails, logos, and websites look like they were sent from a legitimate source (known as “spoofing”)
- refuse to be victimized by threats to your bottom line, to your credit score, or to your brand and reputation—end the communication right away and call the police
- learn their tricks—your lack of knowledge about the methods scammers use gives them a huge advantage, but this advantage can easily be lessened or removed through education and awareness—this is one of the main reasons why sharing information and experiences with other businesses and within your industry is crucial to the fight against fraud.
Some of the most common techniques that scammers use to lure their targets into falling for their tricks are described below. If you and your employees become familiar with these tricks, you will all be better prepared to ask the right questions the next time you get a cold call or unsolicited email or text.
For this pressure tactic, the scammer offers a special low rate, often implying that it is a “one-time” or “limited time” offer from only that caller, to entice you to pay immediately. The script to create a sense of urgency will include some variation on the following phrases, “I’m glad I caught you today,” and, “this offer ends tomorrow,” or, “I can offer this rate now, but I can’t guarantee it will be offered again,” and so on.
Creative name use
With this technique, the scammer starts by giving you their first or last name (likely made up) to establish a sense of comfort and familiarity, and then claims to be from a company with an impressive name that sounds large—perhaps even national or international. The combined effect of a shared personal detail and a daunting company name can often compel the target to completely set aside any initial inclination to be cautious.
Because it borrows credibility from an outside source, the "authority" technique can be highly persuasive. Some examples of an authority script might include such lines as, "We're registered with the government as the official supplier of…," or "You are required by law to buy this…," or "We are owned and operated by MBA graduates with over 12 years' experience in the industry," and so on.
The "reciprocity" technique involves offering a prize, a special price, or some other privilege in return for you sending money or confirming an order. The script for the reciprocity scam typically follows the pattern of, "We'll give you (this) if you give us (that)."
Foot in the door
The "foot in the door" technique involves getting you to agree to some small purchase and then surprising you with larger commitments later. For example, you accept a free box of paper but then discover later that in doing so you've agreed to an automatic monthly supply of paper.
Pitch a better deal
This technique involves the scammer offering you something very expensive, expecting you to balk at the price. Then when they offer you a cheaper alternative, the second option seems so much more reasonable that you don't pause to check on whether it is actually a good deal or not. You may mistakenly think you got a good deal but later realize you've been tricked.
Initial agreement pressure
Early in the pitch, the scammer asks you a question such as “Do you like to save money?” Then later your response is turned around and reframed as a commitment to make a purchase, with a line something like, “You said you liked to save money!”
With this technique, the scammer places you in a desirable and respected social role in the hope that your ego will prompt you to want to prove them right. The script for this technique might include such lines as, "As a critical member of your organization, you should know…," or "Are you the manager? Then you should have the authority to approve this offer now."
This technique plays on the target’s sense of integrity. If you say you’re not sure you placed an order, the scammer assures you that you did and provides details of the supposed contact during which the order was placed. The details are so specific and given so professionally and with such confidence that it is difficult to disagree without feeling like you are going back on an agreement. The script for the professionalism technique might include a line like, “My records show that I called you on (date), at (time) and confirmed the amount. I’ll include my business card in case you have a problem with the order.”
Untraceable payment methods
Scammers often want payment through wire transfers, gift cards, Bitcoin and other cryptocurrency or digital currency. Basically, any forms of payment that are nearly impossible to reverse or track. Bitcoin is particularly difficult to follow since it’s exchanged with someone online via a phone or computer, without a more secure intermediary like a bank.
- How to report fraud and scams in Canada
- FACT: Fraud awareness for commercial targets
- Taking care of business
- Scams affecting businesses (Canadian Anti-Fraud Centre)
- Using cryptocurrency safely (Canadian Anti-Fraud Centre)