For the London Free Press – April 28, 2008

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Fraud affects business as well as individuals.

An Environics survey commissioned for the Competition Bureau of Canada revealed that Canadians lost more than $450 million to mass-marketing frauds committed by mail, phone and Internet in 2007.

It’s estimated that 95 per cent of people who are victims of mass-marketing fraud do not report it.

The Canadian Competition Bureau recently launched the Fraud Awareness for Commercial Targets, or FACT, campaign. This is an outreach and educational initiative that provides businesses and not-for-profit groups with the tools to avoid becoming victims of fraud.

Information to help organizations recognize and prevent fraud can be found on the bureau’s website at www.competitionbureau.gc.ca.

Examples of fraud vary. A common scam which targets many businesses is the issuance of fake invoices and fraudulent telemarketing pitches for office supplies. In other situations, office supplies that were never ordered are delivered or goods are paid for but never received.

By placing two to three strategic phone calls, fraudsters can glean enough information to make a business’s employee believe that a business relationship has been established. The merchandise delivered is usually poor quality and very expensive. Generally, there is no way to return the merchandise. Those who refuse to pay often get harassing calls from collection agencies and pay the bill to avoid damaging their business reputation.

Another common scam is the sending of an invoice for an appearance in a directory when applying for a trade-mark. It is done in a way that suggests it is part of the trademark application process. This is so common that the Canadian Intellectual Property Office includes a warning about it on their trademark approval invoices, along with a customer service number to confirm the legitimacy of the invoice.

The FACT Program urges employers to protect their organizations by training staff to offer responses like these:

- I need to see an offer in writing first.

- Send me a copy of our order.

- We only pay with evidence of a signed authorization.

- I need to consult my manager before making any decision.

- I cannot accept a shipment without written proof that we’ve ordered it.

- I’m not interested. Remove us from your contact list.

Businesses and consumers are encouraged not to make business arrangements over the phone and to hang up if the company soliciting business appears not to be legitimate.

This problem is not unique to Canada. At the international level, a Fraud Prevention Forum has been adopted. Thirty countries form ICPEN, the International Consumer Protection and Enforcement Network, which hosted Fraud Prevention Month activities.

Building on a previous co-operation agreement between Canada and the United States called the OECD (Organization for Economic Co-operation and Development), the competition bureau this month signed a co-operation arrangement with the U.S. Postal Inspection Service in Washington. The goal is to improve competition law enforcement to fight mass-marketing fraud and other deceptive marketing practices with a cross-border component.