It’s already the 20th anniversary of Fraud Prevention Month. It’s a crucial month for raising awareness among organizations about the new strategies used by fraudsters, which are becoming increasingly sophisticated and generally caused by internal perpetrators.
According to the Canadian Anti-Fraud Centre (CAFC), in 2023 alone, Canadians lost a staggering $567 million – an increase of $37 million from 2022 and $187 million from 2021. Despite this rise in financial losses, the rate of frauds being reported remains low, with only 5% to 10% reported.
This represents a significant growth trend that shows no signs of stopping soon. Awareness is crucial for companies to keep pace in this fight, by fostering a climate of vigilance in their daily operations and raising awareness about the importance of adhering to protocols, practices, and security standards.
It is therefore essential to combine awareness efforts with the implementation of new technologies within companies to better mitigate internal fraud cases.
Know Your Customer and Employee
You may be surprised by how much fraud is committed internally, be it through employees who unknowingly let the enemy through the gate via social engineering or phishing frauds, or those who consciously decide to do damage from within. These incidents can be curbed by insider risk monitoring and identity verification and management controls, as well as through partnerships or alliances with trusted third parties who can help implement internal identity-proofing strategies and technologies.
More prevention, less reaction:
Transforming teams to being more prevention-focused in creating processes protects them from preventable risks exposed to every team today.
Implementing background checks in your hiring process is indeed a crucial step towards ensuring security within your organization. However, in today’s dynamic and constantly evolving landscape, it’s imperative for security-minded leaders to recognize that ongoing background checks for employees who handle sensitive information are not just a good practice, but a necessity. These checks serve as a vital layer of defense against various risks, including insider threats, data breaches, and compliance violations.
By conducting ongoing background checks, organizations can proactively mitigate potential risks that could jeopardize the safety of their employees, clients, and overall operations. In an era marked by rapid technological advancements and increasingly sophisticated cyber threats, the need for continuous vigilance has never been more critical.
Moreover, maintaining a proactive approach to background checks not only fosters a culture of security within the organization but also helps in upholding trust and credibility with clients and stakeholders. It demonstrates a commitment to safeguarding sensitive information and adhering to regulatory requirements, thereby enhancing the organization’s reputation and resilience in the face of evolving threats.
In essence, while adding background checks to the hiring process is a commendable first step, embracing the practice of ongoing background checks is essential for staying ahead of emerging risks and safeguarding the interests of all stakeholders in today’s ever-changing economic landscape.
Over 76 per cent of Canadians surveyed believe financial hardships may increase the likelihood of people committing fraud and theft.
Province Analysis for Canadian Debt & Delinquency Rates
(Equifax Canada Report Reveals Increased Financial Strain as Credit Delinquencies Continue to Rise – March 5 , 2024)
| Province |
Average Debt (Q4 2023) |
Average Debt Change (Q4 2023 vs. Q4 2022) |
Delinquency Rate (%) (Q4 2023) |
Delinquency Rate Change (Q4 2023 vs. Q4 2022) |
| Ontario |
$21,831 |
1.66% |
1.32% |
34.79% |
| Quebec |
$18,629 |
0.73% |
0.93% |
35.25% |
| Nova Scotia |
$20,839 |
0.64% |
1.52% |
15.74% |
| New Brunswick |
$20,979 |
-4.28% |
1.59% |
22.51% |
| PEI |
$22,876 |
2.36% |
1.07% |
17.32% |
| Newfoundland |
$23,930 |
4.00% |
1.49% |
15.25% |
| Eastern Region |
$21,647 |
-0.14% |
1.50% |
17.76% |
| Alberta |
$24,356 |
-1.49% |
1.63% |
19.18% |
| Manitoba |
$17,683 |
3.57% |
1.64% |
22.74% |
| Saskatchewan |
$22,743 |
1.41% |
1.59% |
18.59% |
| British Columbia |
$21,796 |
-0.06% |
1.19% |
30.47% |
| Western Region |
$22,388 |
-0.16% |
1.43% |
23.30% |
| Canada |
$21,296 |
0.83% |
1.30% |
28.93% |
Background checks should go beyond traditional processes and adapt to technological changes and emerging threats.
During this Fraud Prevention Month, consider how your company can enhance its security processes during hiring and in its daily employee operations.
“The rise in identity fraud rates illustrates the urgent need for enhanced security measures and greater vigilance across all sectors.”