'Head office' scam targeting Ottawa-area businesses

https://www.cbc.ca/news/canada/ottawa/head-office-scam-ottawa-businesses-1.5454397

Businesses in Ottawa, Pembroke, Petawawa fell prey in recent weeks, police say

Stu Mills · CBC News · Posted: Feb 07, 2020 4:00 AM ET | Last Updated: 4 hours ago

Ontario Provincial Police are warning of a "head office" scam that has victimized at least two Ottawa Valley businesses in recent weeks.

According to OPP, a scammer claiming to be from corporate head office calls a regional office and requests payment for a shipment of goods.

In one case, OPP said the scammer threatened the business with financial penalties if it didn't pay up; in the other, the business was told its stock wouldn't arrive in time.

They're doing it because they think their manager would want them to do that.- OPP Const. Shawn Peever

Typically, the callers embellish their story by insisting they know either the owner of the business or a high-level manager there.

"In reality, there is no incoming shipment coming that needs to be paid for whatsoever," OPP Const. Shawn Peever explained. "It's simply a scam."

Peever said in cases under investigation in both Petawawa and Pembroke, Ont., well-meaning employees dipped into their own savings to avoid those penalties, leaving them each on the hook for close to $5,000.

"They're doing it because they think their manager would want them to do that," Peever said.

Police wouldn't name the businesses that fell prey to the scam.

Tips for businesses

The OPP is urging businesses to establish strict protocols for paying suppliers. In 2018, the Canadian Anti-Fraud Centre issued these tips:

• Beware of unsolicited phone calls from individuals presenting an urgent situation requiring immediate attention.
• Educate employees at every level to be wary of unsolicited calls. Post notices and discuss during staff meetings.
• Give authority to approve purchases and pay bills to only a limited number of staff .
• Ensure policies are in place to verify any request for funds thoroughly prior to making payment.

Franchisees are most vulnerable to the "head office" scam, said Jeff Thomson, a senior RCMP intelligence analyst at the Canadian Anti-Fraud Centre.

In another version of the scam, Thompson said a fraudster purporting to be from head office calls a retailer that sells iTunes gift cards and convinces an employee to scratch and read off activation codes so the cards can be "verified."

"This speaks to the variations in all the frauds we see," Thomson said.

Ottawa police said they've been investigating a similar scam perpetrated in the past two weeks.

In it, a man claiming to be calling from head office convinced an employee to make up for an alleged shortfall in the business's daily cash deposits by purchasing gift cards.