Fraud Threat Grows for Canadian Businesses: AI Adds Complexity to Detection

Fraud is a growing menace for Canadian businesses, with half of all small and medium-sized business owners having faced attempted or successful fraud in the past year. A recent survey by the Canadian Federation of Independent Business (CFIB), in collaboration with Interac Corp., revealed alarming insights into how widespread this issue has become and how it continues to impact companies across various industries.

On average, businesses affected by fraud reported financial losses of $7,800 over the last 12 months. Beyond the immediate monetary damage, business owners also had to contend with time-consuming resolutions (76%), emotional stress (51%), and negative impacts on staff morale (23%). These indirect consequences can be just as harmful, especially for smaller businesses with limited resources.

One of the most common forms of fraud reported includes email phishing, with 85% of respondents identifying it as a significant threat. Other scams, such as text (77%) and phone call fraud (76%), are also on the rise. While these methods are concerning, fraudulent payments and chargebacks are where businesses experience the most severe financial damage. About 19% of respondents reported being impacted by fraudulent payments, and 16% cited chargebacks as a growing issue. Certain sectors, including retail, hospitality, transportation, and personal services, are particularly vulnerable to these types of scams.

As one retail business owner in Alberta shared, "For me, the biggest issue with fraud is the constant phone calls about refused payments with a bank or Amazon. It's unbelievable how many of these I receive—several times a day on some days."

The rise of artificial intelligence (AI) is further complicating the situation. A staggering 90% of business owners expressed concerns that AI will make fraud more sophisticated and harder to detect. AI-powered tools are evolving rapidly, enabling cybercriminals to craft more convincing scams, while businesses struggle to keep up.

To stay ahead of these evolving threats, companies need to implement robust fraud prevention strategies. Many have already started doing so, with 50% of businesses enhancing verification processes, such as multi-factor authentication for online transactions. Additionally, 36% of companies have increased their investments in cybersecurity, and 32% have improved employee training to better identify and prevent fraud.

This rise in fraud underscores the importance of comprehensive cybersecurity measures. Directpath Global Technologies (DGT) offers tailored solutions for businesses looking to strengthen their security infrastructure. As a Managed Security Service Provider (MSSP), DGT provides services like Mobile Threat Defense (MTD), Extended Detection and Response (XDR), and Vulnerability Risk Management as a Service (VRMaaS). Additionally, DGT's Artificial Intelligence Division works with organizations to customize solutions not only for cybersecurity but also for enhancing other aspects of their operations.

Governments are also stepping in to provide support. The CFIB recommends initiatives such as enhancing the Payment Card Industry’s Code of Conduct to hold fraudsters accountable, offering financial assistance to businesses for IT security, and proactively sharing best practices for preventing cyberattacks.

While Cybersecurity Awareness Month in October serves as an annual reminder of the growing fraud landscape, business owners must stay vigilant year-round. With AI-driven scams on the rise, it’s more critical than ever for companies to protect themselves against evolving threats and maintain their focus on growth and customer trust.

Source: Canadian Federation of Independent Business (CFIB) and Interac Corp.