Basketball isn’t the only madness people are discussing this March.
Tracking numbers, studying people as they go about their profession, thinking of all the money on the line… these apply to fraud and cybersecurity as much as basketball bets.
At least 10% of Canada’s population will experience fraud in their lifetime—about as many people as play basketball in North America! While it may feel like your team is headed to the finish line this tax season, be prepared to be knocked out of your bracket with some cold, hard truths about how quickly the bad guys can access and abuse the technology that should be getting you ahead.
Today’s blog looks at the role of technology adoption as a precursor to fraud. All you need to do to access the rest of this article is to type your driver’s license number and date of birth into this link here!
Okay—I promise the next test won’t be so simple.
Technology and Mainspread Fraud
Staying on the March Madness theme, 10 popular types of fraud activities include one overarching factor—technology.
Regarding digital types of fraud, Canada has included identity theft, credit card fraud, government benefits fraud, phishing scams, synthetic account fraud, data breach hacks, ransomware, malware, skimming devices, bank fraud, loan fraud and now, even AI fraud that can emulate voices.
So much for tech healing the world.
Why should you read this? If you’re one of the 9 in 10 who hasn’t been hit yet, it’s just a matter of time. True story: I had an online credit card scam just last week and had to cancel my cards—painful.
When it comes to tapping your phone in unfamiliar places, signing into a suspicious website with the same ol’ password you use for banking, or trusting that technology is here to back you no matter what, think twice.
Consider this mind-blowing fraud that landed overseas crooks over $35 million by deepfaking a man’s colleagues. Even if your team doesn’t use the complex machinery and procedures that this large company does, consider how many basic touchpoints you and this case share—email communications, video chatting, and sharing passwords with only authorized personnel. The employee did their best and still got swindled. It only took one moment of trust in the wrong set of pixels.
The rapid rise in fraud is technology-enabled, just as our businesses are. Sadly, it’s up to you to stay one step ahead. Not just through new equipment leases, but through continuous cyber education.
Consequences of Fraud for Canadian Businesses
The truth is that fraud is a crime that often impacts people or businesses that can’t do much about it.
You can report it, as only 5-10% of business owners do. Maybe you’re lucky and get your money back. But honestly, it’s often considered a white-collar crime, and our business law enforcement teams have their hands full with way more egregious violent offenders. That latte’s worth of money being drained daily from your account for two years may just have to wait.
It’s also often described as a victimless crime since an insurance company frequently gets involved and compensates your company for its losses. However, you’re anything but lossless when it comes to financial penalties against you as the victim. When your rates for, access to, and process to qualify with insurance become higher, scarcer, and more demanding, you are doubly the victim of the crime that has been committed against you.
Most business people are susceptible to fraud, estimated to consume 5% of revenues annually. When you consider that margins are already being crushed by interest rates, utilities, wages, stagflation, and import costs, 5% is a lot to tack on. Prime Capital as a fiscal partner is just one area where consistent cash flow through leasing will allow you to spot anomalies.
Barriers to Reporting Fraud
Why don’t we report fraud as much as we should? Have we simply come to accept the good of technology (ease of access, low cost, streamlined) for the bad (lack of privacy, hidden fees, inability to “log off?”) Or are we simply embarrassed about our failures?
I have a good friend who nearly fell to one of the scammers posing as her grandson on the phone last year, begging his grandma not to tell his mom he needed money for bail after a friend “got him busted.” Of course, this never happened. Grandma called a lawyer friend instead, but she is the exception. Ironically, her being “old fashioned” led to her success in the situation, so I can’t say a Generation Z worker would fare the same.
Maybe we see fraud in the same way we see other cases of lawbreaking—like being hit in a parking lot. It’s a freak accident, something that couldn’t have been prevented, a one-off. However, that’s simply not true. As we let more tech into our lives, we have to be sure to close behind us the doors these tools open.
Like dear Uncle Ben said, with great power comes great responsibility.
Navigating Fraud With Your Lender
Not long ago, a payment processing business had a severe fraud issue with crooks impersonating the website. I can’t speak to how large the losses are to date, but they were big enough to cause a lot of consternation among many financial providers in the country. My team and I were there on the ground floor to pick up what was left of our clients and their confidence in tech (and themselves.)
No one should be embarrassed because a criminal took advantage of them. We will all have at least one regretful moment, wondering why we weren’t more careful with that last email.
But a life lived with having to be vigilant every second is simply exhausting. What choices do we have?
Working with a reputable partner is the middle ground you need between growth and protecting your digital assets.
Protecting Your Finances With Expert Advice
Are you looking for a financial partner you can trust? We’re building strategies that bake safety and contingency into your books. Cash-flow overview, long-term planning, and a personalized review of what makes your accounting tick are just a few ways Prime Capital is building better local businesses.
Get in touch today, and keep an eye out for our next March blog, which will include specifics on how to recognize and prevent cybersecurity threats and fraud. (Expert financial advice? Yes, but expert March Madness picks are not guaranteed.)
