Managing Your Fraud Risk in 2016


The end of the year is fast approaching and organizations like yours are already in the final steps for planning out activities for 2016, but aren’t you forgetting anything?

This time of the year is the best in figuring what fraud prevention measures you will be implementing for the coming year as well as bearing in mind the importance of such measures.

Numbers Are NOT In Your Favour!

The ACFE’s 2014 Report to the Nations shows that 58% of organizations that has been victimized by fraud never got to recover their losses. Think about that and you’ll soon see how important it is to exercise due caution by making sure that you mitigate your fraud risk as much as you can. Of course it is our hope that you’ve been already doing this but hey, better start now than regret not doing so later, right?

“What can I do to prevent fraud in my organization?”

The above is perhaps one of the most common questions we receive from our corporate clients throughout the year. We do wish that we have just one all-encompassing answer but honestly, being able to prevent fraud completely is next to impossible and there is no real guarantee or assurance that fraud will never occur. All we and you can do is to try to manage and mitigate fraud risks. We’ve tried doing that by publishing numerous fraud awareness and fraud prevention articles to help organization leaders like you but alas, that is all we can until you contact us to dig in deeper.

The Most Effective Anti-Fraud Control

The Report to the Nations published some information pointing to proactive data analysis and data monitoring as the most effective anti-fraud control. The keyword there is you have to be proactive. You see, cases wherein control was present reports that there is a 50% decrease in median duration and a 59.7% reduction in median loss compared to cases where there was no control. An interesting fact is that while this control has been proven in the report as the most effective, it is not even close to being the most common control. Only a third of the submitted cases are sporting this.

Surprise audits is another one of the most effective controls for deterring fraud. This showed a 50% decrease in median duration and a 43.3% reduction in median loss but just like the first one, this is only present in just about a third of all the cases in the study.

You might be surprised to know that hotlines are among the top controls for fraud prevention. It showed a 50% decrease in median duration and a 40.5% reduction in median loss It just shows that since hotlines are the channel for tip-reporting, also known as the most common method of fraud detection, the anonymity and security provided by this type of fraud reporting does pay off.

As this year comes to a close, we sincerely hope that your organization will not be one of those companies who’ve waited until a fraud gets discovered before contacting us and contemplating about implementing some fraud prevention measures. Take this time of the year to reflect on what controls you have in place and what you may consider adding to help reduce fraud in your organization. Here’s to more success in 2016!

15 Common Business Scam Tactics and How to Avoid Them


Scams that are aimed at businesses and other business-like organizations often work because the perpetrators come off as real, legitimate, and professional businesses. Their tactics often seem credible and uses practices that are typical of normal reputable businesses; so knowing if you’re possibly dealing with a scammer or a real business can be very tricky.

Here are some techniques often used by business fraudsters:


This modus works by persuading you to avail of the scammer’s offer by making you feel very important or by giving you a highly respected social role. Often the scammer will say things such as: “as the obvious primary decision maker of your organization…” or “approving this offer should not be a problem for someone as critical to the organization as you.”


The scammer borrows credibility from an outside source to convince you. They say highly persuasive and disarming spiels like “the law requires you to get this…” or “our board is composed of MBA graduates with decades of industry experience.”

Creative Use of Name

The scammer uses a company name that seems like a legitimate large-scale enterprise. They’d go as far as giving you a full name when calling but it is most likely a fraudulent name as well.


Be wary of ploys that uses psychological tactics such as giving you access to privileged communication or that gives you special treatment. It’s just plain flattery.


Con artists often hype up their ‘product’ to get you excited about it, saying something along the lines of “if I can afford this for myself I’d sign-up as well, you can’t beat this deal!”


Complimenting you is just a scam artist’s tactic to disarm and charm you. They’d say anything that makes you feel special such as the offer is only made to a special set of businesses or that your business history is amazing and they can’t pass up the opportunity to partner with you.

Foot in the Door

This is plain trickery wherein the scammer will get you to agree to something small such as agreeing to receive some free samples and then after you’ve signed up, you find out that it’s an agreement for a 2 year supply of something you don’t need and now have to pay for.

Give Fake Bad News to Gain Your Trust

The scammer can tell you some negative details about what they are peddling but not enough to outshine what you’ll be getting if you agree to their offer; thereby tricking you into thinking they’re simply being honest about pros and cons.

Initial Agreement Pressure

You’d be asked to agree to something basic such as wanting to save money at the beginning of their spiel and then later on you’d be reminded that you agreed this is a good thing, so why aren’t you signing up?

Paperwork and Professionalism

You’d be called unprofessional when you try to back out of a deceitful agreement, saying that it has already been entered to their records and that you’re not keeping your word.

Peer Pressure

The scammer would make you want to avail of their offer in order to not be left out compared to your competitors. Namedropping of your competitor’s business is part of this.

Pitch a Better Deal

The scammer would pitch an outrageous deal and then mention a much more affordable one when you show signs of balking so you end up still getting yourself entangled with them.


The fraudster will offer prizes or a special discount if you sign a deal with them.


The scammer will say something like that there is just one slot left for their offer and that someone else may get it if you don’t act fast.


Same as above, you’re pressured to agree because you don’t want to miss out on a great deal.

Please note that legitimate businesses may also do some of the business scam tactics described above. In writing this, we aim to at least give you an idea of what could be considered as business red flags. If you’re unsure whether the company or business you are dealing with is the real deal, then simply contact us – your very own Private Investigator in Toronto for a free initial consultation! Remember, an ounce of prevention is indeed better than a pound of cure!


Fraud Awareness for Commercial Targets: Types of Business Scams

toronto-private-fraud-investigatorBusinesses have always been a target of fraudsters, and that’s precisely why businesses should be made aware of the possible scams that they may fall victim to. Frauds that target businesses can end up costing millions of dollars annually, and your company may already be a victim without you knowing it.

The Good and the Bad

The problem with corporate-level scammers is that they seem to be just like any refutable vendor you’ve previously dealt with. It is too easy to fall into their trap before you have any inkling of what’s going on. Their scams can masquerade as office goods being delivered and charged to you without you having placed an order, or can be goods that you’ve ordered and paid for but will never be delivered to you. There’s really nearly nothing you can do once they got you trapped. Their collection agents are nasty, none of their staff are authorized to cancel the order you never placed in the first place, and they’re very quick to blackmail you with legal action if you don’t hand over some money.

Refutable businesses won’t do any of what’s described in this article. They care about customer service and care about growing their business with yours. Obviously, scammers are only interested with what they can get from you today because they hardly ever stay in ‘business’ for long – another reason for you to be able to tell them apart from legit businesses as soon as possible by familiarizing yourself with the types of business scams and how they operate.

So here they are, the Types of Business Scams:

Office Supply Scams

This scam operates by placing one or a few unsolicited calls to a targeted business. They usually make the first call to get information such as your corporate email address, the names of who runs your business, the names of your colleagues, and what office equipment you use. They use the information to imply an existing business relationship when they place a second or third call to one of your company’s decision makers or your colleagues. This enables them to get key persons to agree to their shipments of products that your company never ordered to begin with.

The nightmare continues when the products arrive and you realize that not only that you’ve never placed an order, but the products are cheaply made and cost a lot more than the best products of its kind in the market. You are not given any means to return the products and is stuck with paying for them or face a possible lawsuit that can damage your reputation beyond repair. Keep note that the scam can continue even after you’ve sent payment because the scammers will try to milk as much money as they can from you.

Directory Scams

Directory scams work by either tricking you to advertise in their (non-existent and overpriced) directory, or by fooling you into paying for a renewal of your non-existent subscription service with them.

This scam works because all organizations would elect to promote themselves. Oftentimes, companies do not check records and would just rather get a subscription bill done with, more so if it’s renewal is related to their company’s promotion.

Fake Invoice Scam

This scam often follows the same modus as the assumed sale tactic (the office supplies scam) and then sends a bill or invoice to an unsuspecting target. The invoice or bill will look very credible, printed on high-quality paper and sporting a professional layout. You are then fooled into thinking that you are meant to send payment for the invoice. Worse, once you’ve sent your first payment and the fraudulent transaction enters your books, you are more likely to keep sending payment to the next invoices the scammer will send to you.

Thhs scam can bleed your company for months, up to years without you suspecting something is amiss, more so if they are in cahoots with an employee in your organization. It is very easy to miss fake invoices because they often only charge small amounts but remember; small fake bills can mount up to big losses in the long run.

Suspecting that you may have been a victim of business scam? Want to know how you can further protect your company against fraudsters? We’ve got answers for your private investigator and corporate investigation needs! Contact us for your free initial consultation.

15 Scams to Watch Out For in the New Year


With the holidays and the New Year coming up, scams will once again be at an all-time high. It does seem that fraudsters have a passion for being the Grinch during around the holidays as compared to some other season of the year. What to do then? Brush up on your sleuthing skills and make sure to keep an eye out for these types of fraud and how they operate:

900 Numbers

You will be contacted by the fraudster via mail or email and then convince you to call a 1-900 number to claim your non-existent prize.

Advance Payment Scam

You will be asked to send an upfront payment for goods, services, or anything nice but of course the scammer won’t hold their end of the bargain.

Card Crimes

Basically this works by getting your data skimmed by fraudsters and then they use that data to make fake cards that they use to spend your money and rack up your credit bill.

Counterfeit Cheques

Still more popular than ever, scammers still use fraudulent cheques to get you to send them goods or money but they do it so well that you won’t know until after the deed has been done.

Directory and Supply Scams

Very cunning companies will contact you to avail of their very special bargain prices but it will only be effective if you make a purchase within the next 10 minutes. Later on you find out that the quoted price is far from being a bargain one and is even marked up. Worse, there could be no goods at all.

Emergency Scams

One of the oldest in the book but still works like a charm, the fraudster will contact you to inform you that a loved one has had some sort of accident or needs some money as soon as possible. Always call your loved one directly should you receive a call like this.

Extortion Scam

The scammer will blackmail you about something to get money, goods, property, or services. This type of scam is particularly virulent because oftentimes, the scammer won’t stop until there’s nothing more to give.

Fake Charities

Fraudsters will make use of the names of established charities to get you to give them ‘help’. Sometimes, they would even use facebook and ask you to donate via Paypal.

Identity Fraud and Identity Theft

The fraudster will collect your personal information either to extort money from you or to use your information to commit various frauds.

Investment Scam

You will be convinced by investing your hard earned cash or properties in non-existent businesses or worthless things.

Being Used as a Money Mule

Often associated with money laundering, the scammer may ask for your help to use your bank account to transfer money from one account to another. This can also happen without you being aware of it.

Overpayment Scam

Closely associated with the fake cheque scam, a fraudster will deliberately send you a fake cheque with a much higher value than the cost of goods or services that you are offering. They’d ask you to either give the change in cash or deposit it in their account, thereby making money off of you.

Phising Scam

Internet scammers fish for your personal data such as usernames and passwords by luring you to a fake log-in page.

Romance Scams

A very attractive male or female lures you by pretending to be romantically interested in you and then end up using you like an ATM after gaining your trust and affection.

Tax Scams

Tax season comes with a whole hoarde of scammers who will not waste time to find any opportunity to scam you out of your hard-earned money. When something is amiss and you have no idea what it is when you’re dealing with money matters, then your brain might be telling you that you are being scammed.

Need extra help protecting yourself from holiday scams? Think you may have been a victim of fraud? Then you may need some private investigator action! Contact us for an obligation-free initial consultation today!

5 Steps to Reduce Small Business Fraud

Produced by the Association of Certified Fraud Examiners, the following video outlines 5 important steps you should take to avoid small business fraud.

3 Safeguards for Fraud Prevention


With how things are these days and companies being more focused on surviving the current economic crisis rather than working on growth, it is quite easy to forgo having a sound fraud risk management system. Truth is, it is now more than ever that a small fraud can cause an already fragile business to fail. With stakes that high, no company can afford to ignore loses.

If this is the current situation for business, then it is safe to say that the employees working for them are also under tremendous financial pressure these days. Honest workers can become dishonest employees at the flip of a coin. As we’ve discussed in previous blogs, opportunity and rationalization are both elements of the fraud triangle. All it takes for an employee to commit fraud is to be given the right opportunity and enough reason to do so, such as being in need of money.

This is where having a good fraud risk system factors in. Companies must have and implement a comprehensive fraud detection and prevention program just to be sure to minimize their risk of being a victim of fraud. But how to do so in a cost-effective manner?  Well, there are safeguards against fraud that can be implemented fast and cheap and we’re sharing 3 below!

Here are 3 easy safeguards that you can put in place to help minimize your business’ fraud risk:

Background Check EVERYONE!

Yes, everyone, including the persons from top management. If you want to set an example, you do have to start from the top, right? More so, the best predictor of future behavior is looking at past ones. It might sound a bit discriminatory to flag people with a history of fraudulent behavior but hey, them knowing that you’re keeping an eye on them is an effective fraud deterrent.

Background checks provide valuable insight but you’ll have to first have permission to check certain information such as a person’s credit history. People who are more apt and/or have intent to commit fraudulent acts will rarely consent to having a background check, making this safeguard very effective at screening potential perpetrators of occupational fraud.

Exempt NO ONE

Companies that show that they’re serious about culling fraudsters have less possibility of having to deal to with fraud because they acknowledge that fraud can happen to anyone.

When an organization openly discusses fraud detection and prevention at orientations, staff meetings, and board meetings, it makes sure that everyone knows that there is zero tolerance for all forms of fraud. Think of this as a form on internal audit and really go after all fraudsters whoever they may be.

The no exemption rule goes for both fraud education and prosecuting those who’ve been found to commit fraud. If everyone sees that yes, everyone is obliged to attend fraud prevention meetings and that yes, no one is exempt once found out, you can be sure that every single person in your organization will be very well-behaved indeed – including you!

Have a Whistleblower Hotline

Having a whistleblower program is part of having a great fraud risk management system in place because it gives witnesses a safer way to ‘out’ the fraudster. Of course the safest way to allow the whistleblower to come forward is to have a whistleblower hotline as part of your program!

When witnesses have less fear that the fraudster will come after them after being reported, then they are more apt to come forward. It also provides a clear avenue for reporting fraud without having to think of workplace politics because most whistleblower hotlines offers an option to be an anonymous tipster. Of course anonymous tips will have to be investigated before anything is ‘truly’ done to the perpetrator but at the very least, the hotline gives you a name and the type of fraud committed so you would know what would need investigating.

You can make use of companies that offers whistleblower hotlines for a very reasonable fee. A local private investigator company that offers corporate investigations and surveillance services is best to minimize the risk for the whistleblower and therefore increase the chances of someone reporting suspicious activities.

The safeguards discussed in here are by no means all that you’ll need, but the 3 we’ve discussed is a good start. Remember, the importance of having a comprehensive fraud detection scheme can’t be discounted when it comes to your business’ health. Should you need any assistance or have any questions to implement the safeguards above, feel free to contact us.



Fraud is a year-round threat, but it is especially prevalent around the holidays. With people often very busy and pre-occupied with a million things, fraudsters will exploit every avenue they can; hence, it surely pays to be vigilant at all times.

As we observe fraud awareness week, we’re sharing with you 8 of the most prevalent scams at present time so you can protect yourself from these types of fraud throughout the rest of the year and until 2016!

Disaster Mitigation Scams

Convincing you to avail of disaster mitigation plans only takes a few tugs at the heartstrings (and pocketstrings!) – something that’s easily accomplished around the holidays and beginning of the year when people are more apt to make rushed decisions. Some disaster mitigation companies inflate their damage estimates by as much as 500%, and some get extra cash by using unnecessary equipment thereby making dishonest money off of you.

Bank Draft Scams

Counterfeit cashier’s checks and bank drafts are being issued left and right on a daily basis. If you’re a business or an online seller, you’re especially vulnerable. Be on the lookout for someone paying you a check for far more than the cost of your goods or services and then asking you to give them cash for the overage.

Straw Ownership of Companies and Businesses

Clinics and medical facilities must be licensed to physicians so that they can conduct business and that’s good practice because it can help protect the public. The problem is that these days, some doctors only act as false owners and so the clinic truly operates under someone else. Clinics like this often over-bill their services and you as the consumers suffers in the end by having to pay higher insurance premiums.

Unnecessary Mobile X-Rays

Some companies use mobile x-rays as an opportunity to charge a lot of extra charge in the form of transportation and set-up fees. If your healthcare provider wants to schedule in-office x-rays when it is perfectly easier for your staff to just drop by their clinic (which is conveniently nearby), you know that you’re being taken for a ride.

Credit Repair Fraud

If you have a lot of debt and may be tempted to use a credit repair company to help erase or fix your debt, chances are that you are better off just paying your debt rather than wasting your money availing of their services as they often don’t really help you.

Policy Procurement Fraud

As more and more consumers purchase policies online, policy procurement fraud has become more prevalent. The scammer starts by recruiting insured people like you, convince you to apply for policies, then falsify documents to either charge you more or stage a fake accident so that they can file inflated claims.

Internet Money Laundering Scams

Most internet money laundering scams presents itself as a form of a business or employment opportunity. You’d be contacted by the scammer and will either be sent a job offer or a business proposal that’s very difficult to resist. Next thing you know, the scammers will be sending you a check to buy stuff for them (and you can keep the change), or to process funds for them using your own bank account. The money could be real or not real but if you’re caught facilitating this type of fraud, keep in mind that you can be thrown in jail even if you are not fully aware of what’s happening. Some may try to get your bank or personal information over the phone and hire you without even having an interview. Remember, if it is too good to be true, it probably isn’t true!

Identity Theft

Scammers can either get your details by hacking into various databases or presenting you with fake information to make you share your financial details. Identity theft is perhaps the most serious of all the fraudulent activities in this list because not only will you lose a lot a money, you can also suffer from a damaged reputation and credit score. With effects that can possibly last your entire life, getting your identity stolen is surely the most devastating fraud that can happen to you.

Need help or have some questions about protecting yourself from scams? Feel that you’ve been victimized by one of the scams discussed above? Our private investigator services include both business and individual investigations in and around Toronto. Contact us and we’ll help you get to the bottom of it.


Insurance Fraud Prevention Tips and Tricks


Although only a very small percentage of individuals commit insurance fraud in Canada, it does affect everyone, whether you may be aware of it or not. When a lot of people game the insurance system, the companies offering insurance services have to hike up their fees to cover the expenses. Not fun for many, but then fraudsters only care about themselves. This is why everyone should take an active role in protecting themselves from insurance scams.

Protect Yourself from Being a Victim of Insurance Fraud

So what constitutes insurance fraud? Insurance fraud happens when an individual or a group of persons deceives an insurance provider to get some money. They do this with full knowledge of the act and can be very resourceful when fabricating or exaggerating a claim.

Because insurance fraud can occur in so many different ways and may involve a wide range of participants, protecting yourself from it needs more than just common sense. You’d have to know the tell-tale signs of insurance scam so that you can proactively avoid falling for it. Below are some tips and tricks on how you can protect yourself from insurance fraud.

Tow Truck Service Insurance Fraud Prevention Tips

Although regulations on how tow truck companies should conduct business varies across Canada, there’s a general set of guidelines on how they should act professionally. The first thing you should do in case of an auto accident is to call your insurance broker and of course, do not allow your car to be towed if there are any red flags that show questionable business practices.

  • Do not be tempted to use the first tow truck driver who’ll show up.
  • Ask to see the tow truck driver’s license and tow company license.
  • It is best to use a tow truck company that is recommended by your Roadside Assistance Coverage (if you have one).
  • Do not get swayed into using healthcare providers and auto repair shops that are recommended by the tow truck driver. Some drivers get referral fees when they bring in customers/clients to such businesses and that is a questionable business practice. You should choose auto repair shops and healthcare providers that you are comfortable with.
  • Do not sign an incomplete form that is handed to you by the tow truck driver and be sure to read the fine print.

Healthcare Providers Insurance Scam Prevention Tips

Although it is very important that you get treated for any injuries as soon as possible, it is also very important that you receive treatment from an accredited a qualified healthcare provider.

  • It would be best to choose a clinic from a trusted network or ask your family doctor for referral when it comes to choosing healthcare providers. The tow truck driver isn’t the most reliable source of information on this matter.
  • If your instinct says something is not right, it’s most likely true.
  • Note that the document that you would sign should list your actual injuries and symptoms only. Any exaggeration or additional ‘injuries’ written in there to increase the amount of your claim constitutes insurance fraud.
  • Do not sign any document if you have any concerns or unanswered questions. Be wary that some clinics will make you sign a form which makes you responsible for payment in case something is not covered by your insurance. It would be wise to know what expenses are covered by your policy and which are not.
  • Do not accept the use of any assistive devices unless you truly need it, and in case you need it, you may want to check if it’s covered by your insurance or you’ll end up paying for it.

Insurance Scam Prevention Tips for Staged Collisions and Fake Accidents

  • If you suspect that the accident you were in or have witnessed is staged, notify your Claims Advisor or the proper authorities.
  • Are there any odd behaviour or anything weird about the accident? If the accident is a very minor one and the passengers in the other vehicle are claiming that they have severe injuries, then it might be time to call the police (they can be a witness to the accident too).
  • Are the people in the other vehicle refusing to call the police or refusing to provide information about themselves or their vehicle? You may have a reason to be suspicious.
  • If vehicular contact was clearly avoidable and it seems that the other vehicle went out of its way to make contact with your vehicle just to cause a collision, this might be a staged collision.
  • If you can, record any important information about the other vehicle. License plates, names of passengers, and injuries are all pertinent data. Take photos and/or videos as much as possible. This prevents fraudsters from claiming a lot more injuries and adding fictitious passengers to get more insurance money later.

Thinking you might have been a victim of insurance fraud or do you suspect that someone might be involved in insurance scamming? Then you might want to avail of our insurance investigation service. As one of the leading private investigators in Toronto, we’ve investigated and helped stop scams in their tracks. Contact us for a confidential assessment today!

Theft Prevention by Inventory Management


Inventory accuracy is perhaps one of the most important safeguards any business owner can have against theft if the business deals with any form of physical goods. How so? Well, when you think of it, customer retention, profitability, and operational productivity are all made possible by a reliable inventory system!

In this day and age, no matter whether you are still relying on manually recorded inventory cards, or have a fully computerized system, or perhaps have a combination of the two…the benefits of inventory accuracy cannot be discounted. Just take a look at the benefits below and think of what a good inventory management can do for your business.

The Benefits of Proper Inventory Management

  1. An accurate record reduces stock-outs by helping you to make the right replenishment decisions.
  2. You and your sales reps will know for sure that what product you promised to send out will be sent out on time and be received on time.
  3. You will save time and your distribution centre will be more productive because you don’t have to waste any effort searching for missing or mistakenly recorded goods.
  4. You will have more cash for opportunistic purchases, capital improvements, and investments because your assets are not tied up in unnecessary inventory.
  5. Last but certainly not the least, a properly managed inventory in your business or warehouse is proven to reduce employee theft!

Wait, how does that work?

When you have everything recorded and in black and white, your employees cannot just take or steal items out of storage without it going by unnoticed. When everything is accounted for, there is less risk of employees committing white collar crime because they know that the likelihood of being found out is quite high.

So how do you go about this?

The When, What, and Where of Cycle Counting

Basically, cycle counting is just a form of inventory management that follows a regular schedule. Here are what you should consider when planning a cycle counting program:

  • WHEN – the best benefit you can get from cycle counting results from how often you do it. The more often or more frequent you take a record of everything, the easier it is to spot discrepancies.
  • WHAT – you do have to prioritize what to count or what to keep tabs on because you cannot track everything at the same time. More often than not, the most frequently stolen items are those that are small enough to fit in a pocket and have a high street value.
  • WHERE – items that are stored in less accessible areas and easily accessible areas of your office or warehouse is more likely to go missing. Why? If no one’s watching, thieves are more likely to go about their business.

Now, by no means are we saying that cycle counting is all you’ll need to prevent theft, but it is certainly one of the best tools you can use to reduce your organization’s vulnerability to thieving. With this said, it is still important to not let your guard down and not to underestimate a thief’s determination to commit fraud or steal from you. Other measures, such as doing background checks on potential new hires and employing other risk management solutions are still advisable.

Need professional help to safeguard your business from thieves and various forms of fraud? Then contact the best private investigators in Toronto! Contact us so we can determine what you need and talk about how we can help you.

Avoid Home Improvement Fraud


We are around the time of the year when a lot of people are adding some design features in their homes, fixing what’s broken, and perhaps even renovating entire rooms, and hence, we felt the need to write this blog about how you can avoid home improvement fraud.

People often think that fraud only occurs at the office or their place of work but the truth is, whenever and wherever there is an opportunity, fraud is bound to take place – yes, and it often takes just one corrupt contractor to mess up your whole home improvement plan.

As a renter or a home owner, it is often the case that there would be things that needs fixing around your place, so what you do is find a residential contractor. You see, most contractors would require some down payment, more so for pricey projects. In here lies one of the red flags with which you can avoid home improvement fraud if you know what to look for.

Seeing the Red Flag

The contractor will ask for a down payment in the form of credit card, check, or cash and below is why you have to be careful.

Cash – Down payments in cash is often held as a red flag when dealing with a residential contractor, but why? Being low on cash can mean that the contractor may be having problems handling the finances of the business.

The contractor having some financial difficulties is not necessarily a problem on its own, but it is human nature to seek the easy way out when dealt with a predicament. If that contractor is in serious debt or need of cash, your money may be used by the contractor for personal needs instead of your home improvement project. Another issue with cash is that it may be difficult to prove later on that you’ve made some payment, as an improperly completed receipt is not considered to be an adequate legal proof of having a transaction.

Checks – Checks leave a paper trail, so it is a lot safer to use than cash. Checks are also easy to track and control.

Credit cards – This option would be the safest and easiest way to handle home improvement payments. It is easy to track and control like the check, but is a bit easier and more convenient to use.

These days, all you have to do is to hand over your credit card to the contractor for it to be scanned using a handheld scanner and that’s it! Everything is recorded by the bank or banks you both are using. So if there is a need to prove any payment made at a later date, you can easily access the records through your own account. In case of fraud, there is also a higher probability of you being able to retrieve your money if you paid via a credit card.

Now that you know how to avoid home improvement fraud by checking out a contractor’s payment methods and not falling victim to the down payment scam, you might also want to take extra precautions for bigger projects. You may hire a project manager if you’re super busy or at least make sure that you’ve done some background check on all individual contractors and firms you’re considering for your home improvement project before making a final decision.

Need any help getting some information on a company or individual? Want to make sure that their business is legit and that they are trustworthy? Then contact the best private investigators in Toronto! Give us a call and we’ll surely get back to you as soon as we can. It does pay to be extra careful!