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Business / Service Scams

Business fraud consists of dishonest and illegal activities committed by individuals or companies in order to make a profit.

Some examples are:

  • Charity fraud
  • Internet fraud
  • Non-delivery of merchandise
  • Non-payment of funds
  • Overpayment scheme
  • Re-shipping scheme
  • Counterfeit products
  • Business email compromise
  • Business accounts compromised
  • Fake invoices/purchase orders
  • Computer fraud

The fraudsters target victims at any level of an organization using ‘spoofed’ email accounts to make it look like an employee or client is sending the email. The employee’s account information is then changed to allow the fraudster to redirect paychecks and to have employee access to company information or false purchases are made on clients accounts.

The below table provides information for frauds/scams reported to EPS in 2017 that were investigated at a divisional level. They do not include the intricate high-end frauds which are classified under ‘Financial Crime’. Further explanations can be found below the table.

 

Business/Service Scams # of Victims Money Lost 
Computer Fraud Unknown
E-mail Account Fraud 3  $ 546 975.00
Fraudulent Purchase Order / Invoices 11   $ 163 984.80
Insurance Fraud 2  $ 22 000.00
Online Purchase - Identity Fraud  $ 42 679.00 
Total  21  $ 775,638.80

 

Computer Fraud
The money lost in computer frauds referenced above is unknown due to the nature of the occurrences.

  • ‘Key-logger’ being used in an attempt to access business bank accounts and to acquire employee information (names, SIN numbers);
  • Computer parts being swapped out of newly purchased computers and sold online, with the computer then being returned for a full refund;
  • A business server being taken over after ransomware was installed.

E-mail Account Fraud

  • E-mail accounts were hacked into and funds were directed to an offshore account;
  • Financial institution phishing emails were used to get banking information and funds were withdrawn from account;
  • Money deposited into account was intercepted and transferred to another account.

Fraudulent Purchase Order / Invoices

  • False purchase orders were received using genuine customer accounts;
  • Telephone orders/purchases were fraudulently done using existing customer accounts.   

Insurance Fraud

  • Consisted of creating a fraudulent bill of sale for non-existent vehicle then claimed vehicle was stolen in order to collect insurance money for the non-existent stolen vehicle.

Online Purchase - Identity Fraud

  • Vehicle purchase transaction initiated online using fraudulent identification and was successful, default on payments shortly afterwards.

 

When we look at frauds committed in the business and service industries there is a lot of under-reporting. Perhaps this is due to people being of the mindset that they should have known better or seen the signs that it was too good to be true, so they absorb the cost instead of reporting it. Of the occurrences that are reported, it is sometimes difficult to differentiate as to which ones are criminal in nature or civil. If there is no overt indication that the occurrence is criminal, the individual is referred to Service Alberta CIU to review and possibly investigate.


If you've been a victim call the Edmonton Police Service immediately at 780-423-4567 or #377 from your mobile phone. If you're a victim of fraud, do not be afraid to come forward. You are not alone. We are here to help you.

To report a fraud, please contact the Canadian Anti-Fraud Centre online or at 1-888-495-8501.