Fraud prevention 101: counterfeiting and identity theft

ss_barista_56396683So you’re the proud new owner of a business and you’ve just completed your first sale.

To commemorate the moment, you decide to display the bank note from your very first transaction.

But then you notice something strange about the currency: it’s light as a feather and it doesn’t have the texture you normally associate with Canadian cash.

Your very first customer passed you a bogus bill! You’re out of pocket for the value of the goods. You feel duped, asking yourself, “How could I have been so gullible?”

Maybe it’s a good thing this happened so soon, because at least now you are wise to some of the ways of the world of fraudsters.

Whether you own a mom-and-pop store and deal only in cash, or you conduct business online and only do e-commerce, fraud awaits the uninitiated.

Here are some tips to help your business prevent two common types of fraud: counterfeiting and identity theft.


  • Use your instincts and trust your senses: if something feels or looks off, it’s probably because it is.
  • Consider a cash verification unit, such as an ultraviolet scanner.
  • Familiarize yourself with at least two or three security features present on Canadian currency (raised ink on portraits/numerals; colour changes on the hologram strips; serial numbers that do not repeat; fine-line detail in the face and hair of portrait).
  • If you think a customer is attempting to pass a counterfeit bill, stop the transaction and ask for another bill. Ultimately, you should record all of the details associated with the transaction and contact the police.
  • The Bank of Canada has useful information about counterfeiting that will help inform your judgment.
  • Report the incident to your local RCMP Financial Crimes Unit.
  • Train everyone who handles cash in your business on how to identify counterfeit bills and how to handle a customer who’s attempting to use it.

Identity theft

Your customers are the lifeblood of your small business and you need to take steps to protect their personal data and financial information. If your business’ data security is found to be faulty, you could be liable for a security breach that leads to identity theft of your customers’ information.

  • Only collect essential data and obtain consent for the information you collect.ss_internetsafety_vector_217872910
  • Don’t store unneeded data.
  • Encrypt data on networks, laptops and remote access devices.
  • Update security software frequently.
  • Save information to networks, not hard drives.
  • Use locks, alarms and video cameras to control access to customer data.
  • Conduct employee background checks.
  • Terminate network access when employees leave the organization.
  • Limit access to sensitive data.
  • Report suspected incidents of information theft to the Competition Bureau and/or your local RCMP division.

Additional resources on fraud prevention

  1. CFIB. Learn how to identify genuine bank notes
  2. Competition Bureau. Little Black Book of Scams
  3. Canadian Anti-Fraud-Centre.
  4. Royal Canadian Mounted Police.

One thought on “Fraud prevention 101: counterfeiting and identity theft

  1. Pingback: Can You Accept that Spockified Bill at Register? | My Startup Canada

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