Avoiding Scammers

Thursday, March 21, 2024

Education is the best way to keep your farm business safe.

By Emily Croft

Farms, like every other business, are at risk of being targeted by scammers. It can feel challenging to determine what is safe, as more business transactions move to a remote platform – over the phone or the internet.

The Canadian Anti-Fraud Centre (CAFC) stated that losses from reported frauds increased from $165 million in 2020 to $379 million in 2021. These numbers don't include losses from the many instances of fraud which weren't reported.

"Fraud is across the board, generally unreported. It's estimated that only five to 10 per cent of cases are reported," explains Jeff Horncastle, Client and Communications outreach officer at CAFC.

"It's a huge problem that is likely into billions of dollars lost."

As the cost of equipment and commodities increase, and more money changes hands, there may even be scammers who specifically focus on the agriculture industry.

How can farmers protect themselves and their businesses from fraudsters?

What's out there?

Over the past few years, the farm community has seen common reports of scams involving equipment, hay, grants, and more.

In Ontario, the OPP has reported an increase in merchandise frauds involving farm equipment.

John Armit, acting detective sergeant with the Anti-Rackets Branch of the OPP, says that this uptick in reports was seen before harvest in the summer of 2023.

"What happens is the fraudster grabs an image from an auction or trading website in the U.S. and will copy the information and put it on a Canadian website," explains Armit, who suggests a careful, cautious approach for Canadian farmers looking at equipment in the U.S.

"That same image and info is now on Canadian platforms, and Canadian farmers who are looking to purchase will see it and contact them. They are now in direct communication with the fraudster.

"We've seen money wired to the United States, and once the money is sent, the communication is ceased or there is suddenly some excuse for why the equipment can't come to Canada."

Armit says that equipment listed below market value should be a major red flag when shopping. He also recommends that, if possible, farmers make an effort to see equipment in person before making purchases.

Horncastle notes that fraud is a risk to all farmers.

"With these challenging times in the economy, I would say most farmers are at risk because everyone is trying to save a bit of money. Anyone could be targeted," says Horncastle.

Armit says that another common scam being reported in Canada is spear phishing, or business email compromise.

In this scam, fraudsters will collect information about their victim in advance. They may use malware to create a rule to forward emails to their own account, and they may infiltrate or mimic the victim's own email. The goal is to send more convincing communications.

"The fraudsters might send an email to that person asking for a change in banking info," explains Armit, describing how business email compromise occurs.

"What happens is that someone clicks on malware, which directs copies of emails to a different address. Scammers can monitor emails and then can send an invoice with banking info and the victim would send payment to the new account."

Joel Bouvier, director of Cyber Security at Farm Credit Canada, says that there are a wide variety of scams that can affect farmers.

"It could be anything. We've seen fraudulent equipment and supplies sales, some invoice scams, online bidding and auction scams suggesting you might receive a discount if you pay direct, grant scams, or government rebate scams," says Bouvier.

Farms that use a lot of technology, such as hog and dairy farms, may also be at high risk. Sometimes the high-tech systems can be taken over, disrupting operations.

"It's becoming more pervasive. It used to be targeted at larger organizations, but now we see it happening to small farming operations too," explains Bouvier.

"There are hackers out there that specifically target agriculture. They are just putting stuff out there and hoping someone will take the bait."

As these attempts become more common, what warning signs should farmers watch for while conducting their business?

Keeping your farm safe

All members of the farm must be trained in what to look for when avoiding scams.

"There are a few common things people can look for," explains Bouvier.

"Ask yourself if this is too good to be true. Is it too good of a deal? One of the common footprints of fraud is that they are playing on emotions and trying to get a knee-jerk reaction or playing on self-interest. That's the deal portion."

It's also important to verify sources to avoid scams. As an example, producers can research the seller and location of equipment, or investigate email senders.

"I always tell people to be their own detective – look online and do your research. The big red flag for farmers would be any unsolicited emails, phone calls, or texts. When the info does come to you, slow down and conduct your own research," says Armit.

Horncastle agrees. "You can look up the URL or domain that fraudsters are using for links or emails. There are also ways to verify when a website was created.

"If you're getting emails asking you to download attachments or click on links, take time to look at where it's coming from."

Bouvier asks, "if an email appears to be coming from a known person, does it follow typical interactions with that company? Independently verify with that person if they are asking you to phone somewhere or send money. Don't just trust it."

Training is another important aspect of keeping farms safe from fraud. There are a few tips for avoiding scammers and increasing the security of farm businesses.

"The first step is just training themselves and their employees to be able to recognize the warning signs of phishing," says Bouvier.

"Never give out personal info, and if it's a known person contacting you, make sure you verify."

Keeping technology protected and clean will also reduce the risk of being a scam victim.

"Password hygiene on your accounts is important. Use complex passwords and multifactor authentication in case someone has your password," says Bouvier.

"Don't reuse passwords on your accounts. Anti-virus and anti-malware software can also help protect your devices, and if it finds something malicious, it can actually help block them."

Bouvier recommends keeping devices updated, noting that out-of-date software can be exploited by scammers.

There are also a few programs that are designed to reduce the risk of fraud.

Get Cyber Safe is a national program which increases awareness of cyber safety. It features information about securing accounts, devices, and connections.

The Canada Digital Adoption Program (CDAP) is also a nationally administered program offering grants for improving technology. Businesses can apply for the Boost Your Business Technology grant for up to $15,000 in funding. One eligible application for this funding is boosting business cyber security.

What if you've been scammed?

You don't need to be the victim of a scam to report something suspicious.

"If something is suspicious, it's important to report it," says Horncastle.

"You don't have to be a victim to report it. Flag it to the platform it's on and report it to the Canadian Anti-Fraud Centre with the contact info and payment info they are requesting. Never send money or personal info if you believe something is suspicious."

If you do find yourself the victim of a scam, don't be embarrassed.

"A lot of the time people are embarrassed, so they don't react right away. Don't be embarrassed – it happens," says Bouvier.

Armit shared a publication by the Canadian Anti-Fraud Centre detailing six steps to take if you find yourself a victim of a fraud or scam.

Step 1: Gather the information relevant to the fraud, including documents, receipts, and communications.
Step 2: Report the scam to local law enforcement and keep a log of communications and your file number.
Step 3: Report the scam to the Canadian Anti-Fraud Centre by phone or on their website.
Step 4: Report the incident to the financial institution to where the money was sent and to the payment service provider.
Step 5: If fraud took place online, flag it on the respective platform as "Report Abuse" or "Report an Ad" on the fraudulent advertisement or listing.
Step 6: Place a flag on your bank accounts, and report the fraud to the credit bureaus, Equifax and Trans-Union, to avoid any more money being stolen or lines of credit being opened in your name.

Bouvier suggests having these steps listed as part of a farm protocol before a scam occurs.

"Make a plan for what happens when the worst occurs. This ensures that critical response decisions are not driven by emotions during high-pressure moments."

Is it possible for producers to get their money back after being scammed?

Horncastle says it's unlikely, but it depends on a few factors.

"The chances are slim, but it does depend on how the money was sent. If you used a financial institution or wire transfer, reach out to the bank about getting the money back, if possible," explains Horncastle.

Bouvier says it can also depend on where the scammer is based, as many are located outside of Canada.

Armit explains, "The big challenge is the globalization of these frauds, which makes it challenging jurisdictionally for Canadian authorities to arrest overseas. The fraudsters have gotten proficient at using money mules and professional launderers."

With these challenges, education and prevention are the best tools to avoid fraud.

As scammers become more creative and the risks of fraud increase, prevention is becoming critical for the safety of farm businesses. Taking the time to become educated in cyber security and fraud prevention and taking extra precautions when making purchases or exchanging information or money can help reduce your risk. BP