Staying One Step Ahead: How Canadian Small Business Owners Can Outsmart Fraudsters

While fraud cases may be on the decline, they’re far from over. To mark Fraud Prevention Month, we spoke with Yale Holder, Vice President of Customer Experience at Moneris, about the latest fraud trends affecting Canadian businesses and how small business owners can better protect themselves. With new data showing a 15% drop in reported fraud cases in 2024, there’s reason to be optimistic—but also cautious. From refund abuse to stolen devices, Holder shares expert insights on how to stay ahead of the evolving threat and keep commerce safe for everyone. —Vita Daily

Fraud Prevention Month is a great reminder for businesses to stay vigilant. What are the most common types of fraud that businesses in Canada are facing today?

Moneris is a leader in Canadian commerce solutions, and as a trusted partner to merchants across the country we know protecting your business is just as important as growing it. It’s for this reason we track types of fraud, raising awareness of the trends we’re seeing and the fraud tips and tools available to protect businesses.

Across Canada, the most common type of fraud reported is called mail order/telephone order fraud, or MOTO fraud, and it contributed to 62% of all reported cases in 2024. This happens when a merchant takes card details over the phone or by mail and manually enters it. When a cardholder disputes a charge completed by MOTO, the business is left with the loss. Following proper card acceptance procedures is the best way to minimize or stop this kind of fraud.

Next, abuse of the refund process accounted for almost 30% of all fraud cases. This includes refund on stolen devices, abuse of the refund process and employee-led refund fraud. Cases involving the refund process grew by 11% year-over-year. Fraud is often a crime of opportunity. The refund process can become a vulnerability if businesses aren’t careful. 

Moneris reported a 15% decrease in fraud cases in 2024. What do you think contributed to this decline, and what steps can businesses take to keep this trend going?

While seeing a drop in fraud cases is encouraging, it is a result we are cautiously optimistic about. Cases can often go unreported, and fraudulent activity is almost always higher than the data indicates. Staying ahead of fraudsters means staying on top of fraud trends. To keep fraud cases on the decline, business should remain vigilant and aware of what types of fraud to look out for, and stay up to date on the latest tools, resources and prevention tactics available. 

Small businesses often feel the impact of fraud more significantly. What are some practical, cost-effective strategies that small business owners can implement to protect themselves?

Like I mentioned earlier, MOTO fraud can be stopped by following proper card acceptance procedures. Instead of taking credit card details manually, use a secure online payment gateway like Moneris Checkout, which integrates with a variety of fraud prevention tools. 3D Secure 2.0 is a great example, which shifts chargeback liability to the card issuer.

To protect against refund fraud, businesses should apply passwords to their terminals and use administrative restrictions that are limited to only authorized employees. They should also take steps to protect their devices, such as:

• Not leaving devices unattended.
• Observing customers when they are doing their transaction – it should be a simple tap to pay, or card insert with PIN entry. If a customer is taking longer than normal to process a transaction on a payment device, employees should intervene.
• Processing transactions in-sight of security monitoring systems.
• Storing devices out of sight when their businesses are closed for the day.  
• Documenting and periodically checking devices to make sure they’re accounted for and not tampered with or swapped with a decoy. 
• Keeping count of devices and their serial numbers.
• Closely checking the state of their devices (does it appear damaged or tampered with)?
• Making a daily checklist for responsible payment device management as part of their business’ opening or closing procedure.

British Columbia accounted for 8% of total fraud cases in Canada last year. Are there any regional fraud trends that businesses should be particularly aware of?

Across Canada, fraud involving the refund process is the second most common type of fraud behind MOTO. In British Columbia, card present fraud, where a stolen or counterfeit credit or debit card is used in-person, surpasses refund fraud as the second most common type of fraud. Businesses should make sure to always follow proper card acceptance procedures and use a secure payment gateway to protect against both these types of fraud.

How does Moneris help Canadian businesses stay ahead of fraud, and what tools or resources do you recommend for businesses looking to strengthen their fraud prevention strategies?

This Fraud Prevention Month, Moneris has launched a full awareness campaign to help educate businesses on fraud types and prevention tactics, as well as the fraud prevention tools that are available. Follow Moneris on social and keep an eye out for our “What the Fraud” campaign and check out our webpage dedicated to resources for businesses to protect themselves against fraud.

With more consumers shopping Canadian, what role does fraud prevention play in maintaining trust and confidence in local businesses?

Fraud losses affect both businesses and consumers and can have adverse effects on a smooth shopping experience to prevent this we encourage small and local businesses to use secure payment gateways and implement fraud prevention protocols to protect themselves. Protecting local businesses from fraud also safeguards and supports local economies across Canada. With more consumers looking to buy Canadian, fraud prevention tips and tools can make sure Canadian consumers have options when it comes to supporting the Canadian economy.

Fraud prevention measures are constantly evolving. What emerging fraud threats should businesses be on the lookout for in 2025?

Scammers’ tactics are always evolving, making fraud harder to spot without careful attention.

Fraudsters use tricks like impersonation, urgency and intimidation to deceive businesses. They may pose as trusted contacts, pressure employees to act fast or hide scams in routine transactions.

While fraud trends are constantly evolving, following proper card acceptance procedures remains one of the best ways to minimize or stop almost any type of fraud.

For business owners who may not have experienced fraud yet, why is it important to be proactive rather than reactive when it comes to fraud prevention?

Over the last six months, one in five Canadian Businesses experience a payment fraud and over those 36% suffered an average financial loss of close to $8,000. This can be significant for small businesses. Being proactive against fraud can help businesses avoid significant financial consequences and operational disruptions that may impact customer trust and weaken long-term stability.

What’s important to remember is that reporting fraud helps prevent future scams. Even small cases can provide key leads to stopping larger fraud networks. If you’ve been a victim of fraud, notify the authorities and your commerce provider. For our merchants, Moneris is always here to offer support.