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Fraud Prevention

Beware of new telephone scams

AUTHOR: Paul SPare, CPA, CA

The following article appears originally on the CRA website and was posted originally on June 10th, 2015.

The Canada Revenue Agency (CRA) is noting an increase in telephone scams where the caller claims to be from the CRA but is not, and is asking Canadians to beware—these calls are fraudulent and could result in identity and financial theft.

Some recent telephone scams involve threatening taxpayers or using aggressive and forceful language to scare them into paying fictitious debt to the CRA. Victims receive a phone call from a person claiming to work for the CRA and saying that taxes are owed. The caller requests immediate payment by credit card or convinces the victims to purchase a prepaid credit card and to call back immediately with the information. The taxpayer is often threatened with court charges, jail or deportation.

If you get such a call, hang up and report it to the Canadian Anti-Fraud Centre.

These types of communication are not from the CRA. When the CRA calls you, it has established procedures in place to make sure your personal information is protected. If you want to confirm the authenticity of a CRA telephone number, call the CRA by using the numbers on its Telephone numbers page. The number for business-related calls is 1-800-959-5525. The number for calls about individual concerns is 1-800-959-8281.

To help you identify possible scams, use the following guidelines:

The CRA:

  • never requests prepaid credit cards;
  • never asks for information about your passport, health card, or driver's licence;
  • never shares your taxpayer information with another person, unless you have provided the appropriate authorization; and
  • never leaves personal information on your answering machine or asks you to leave a message containing your personal information on an answering machine.

When in doubt, ask yourself the following:

  • Is there a reason that the CRA may be calling? Do I have a tax balance outstanding?
  • Is the requester asking for information I would not include with my tax return?
  • Is the requester asking for information I know the CRA already has on file for me?
  • How did the requester get my email address or telephone number?
  • Am I confident I know who is asking for the information?

The CRA has strong practices to protect the confidentiality of taxpayer information. The confidence and trust that individuals and businesses have in the CRA is a cornerstone of Canada's tax system. For more information about the security of taxpayer information and other examples of fraudulent communications, go to www.cra.gc.ca/security.

Canadian Anti-Fraud Centre

For information on scams or to report deceptive telemarketing contact the Canadian Anti-Fraud Centre online atwww.antifraudcentre-centreantifraude.ca or toll free at 1-888-495-8501.If you believe you may be the victim of fraud or have given personal or financial information unwittingly, contact your local police service.

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Eight Tips for Preventing Fraud in Not-For-Profit Organizations

AUTHOR: April Wheeler, CPA, CGA, B.COMM

Many organizations feel that, due to their small size, they are not susceptible to fraud. Unfortunately, this is not true.

Even the smallest of organizations have been, and can be, targets of fraud.

In fact, smaller organizations have disproportionately large losses from asset misappropriation, and are much less likely to recover from a fraud. This is due to the fact that they often employ friends, family and other “trusted individuals,” and rely on trust rather than internal controls to minimize their exposure to fraud. Trust, without verification in the form of internal controls, is ineffective and provides the opportunity for employees to commit fraud.

There are several simple and inexpensive steps that every not-for-profit organization can implement to prevent fraud. They are as follows:

  • Perform background checks on employees – Obtain information on a potential employee from an independent third party. About 15% of employees who commit fraud are repeat offenders.
  • Create an environment where honesty is practiced.
  • Maintain current and accurate accounting records – Accurate accounting records makes hiding fraudulent activity more difficult.
  • Periodically test to determine whether the internal controls are being followed – This lets employees know that others are watching and may deter them.
  • Insist employees take time off and cross-train employees – This will reduce an organization’s reliance on one individual and make it more difficult for an individual to hide fraudulent activities.
  • Physically secure the organization’s premises and assets.
  • Limit access to accounting software – Access should be limited to job functions and include offsite back-ups.
  • Use electronic payments – This will eliminate the use of cheques and reduce the likelihood of an individual passing a fraudulent cheque through the system.

Fraud and employee theft will always be concerns for an organization. Nothing can eliminate the possibility of an organization being a victim of fraud. However, a few simple policies and controls can minimize this risk by reducing the opportunities for fraud to be committed.