F
raud is a multi-million dollar problem for Canadian
businesses and the risk of falling victim to financial
fraud is growing. Simply searching “financial fraud” on
the web generates over 154 million results!
As an experienced commercial banker, I’ve heard many
stories over the years from clients and accounting
colleagues about fraud that has occurred within their
organizations and in their personal lives. Many of these
instances involve counterfeit or altered cheques, payment
or wire transfer fraud, and, in recent years, online fraud.
Online Payment and Wire Transfer Fraud
The increasing prevalence of online fraud is particularly
noteworthy. One specific area of growth involves criminals
hacking into organizations’ email applications. Examples
of this type of fraud include:
that appears to be
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• A CFO received an emailThe email instructedfromCFO
organization’s president.
the
to immediately arrange a transfer of company funds
to a third party for a new project. Generally, this type
of fraudulent email contains specific instructions on
wiring the funds and banking details. At first glance,
the email appeared to be legitimate. However, the CFO
took the extra step to contact the president by phone.
This conversation confirmed no such instructions were
sent, preventing the fraud.
• A controller received an email from the company
owner similar to the message described above. When
reading the email, the controller sensed that something
didn’t seem right – the company owner had never
addressed past emails with the salutation “dear.” Rather
than transferring the funds immediately, the controller
contacted the owner and confirmed that the message
was attempted fraud.
These cases are more common than one might think.
The lesson here is to make certain all email payment
instructions are verified directly with the source. It is