Secret Life Ep. 77 with Karen Smith from Better Business Bureau of Saskatchewan

Barb 0:00Today’s guest is all too familiar with the underbelly of the business world. Karen Smith is the CEO of the Better Business Bureau of Saskatchewan. And she tells tales of business owners who have been wrong, cotton scams and having lost 1000s or maybe even more dollars. She also tells tales of business owners who are protected because of their engagement with the BBB. Karen, welcome. Thank you for being here.
Karen 0:32Thanks for inviting me, Barb. Glad to be here.
Barb 0:35Absolutely. And we too, had some tech challenges this morning or earlier guests had some challenges as well. So fingers crossed, we’re on and we’re live. And hopefully it all works. Yeah. So tell me how long have you been with the Better Business Bureau? Just a little over five years with the Better Business Bureau? And what interested you in a rule like that you’re like on a daily basis? You’re kind of dealing with some yucky stuff? No, I
Karen 1:04Yes, it is a different environment here always balancing something between consumers and businesses, or scammers and businesses and consumers. It’s always a balancing act. No, I think that my experience up to now and lead me to at the right time.
Barb 1:35Got it. Kate, that sounds very good. So one of the tools that I know that the Better Business Bureau have is something called scam tracker. And that’s actually an international initiative, or is it a national initiative.
Karen 1:48It’s an international and they sort of Canada was at the forefront. Although Canada didn’t create the product, we became the first ones to step up to the plate and say, let’s make it live in Canada everywhere all at once. And that okay, but you know, five years ago, they were piloted the product in a number of locations, I guess, seven and eight years ago, when I came on, they were both sued mentioned five years ago or so. Okay, they were looking to pilot it in a broader spectrum to see how it would work. Canadian BBB offices stepped up and made it happen.
Barb 2:36So what exactly is scam? tracker? How do I use it as a business owner.
Karen 2:42So it’s a crowdsource means of collecting information from victims about scams is a database that’s accessible worldwide, can’t it’s the it’s in the victims own stories. It’s no one has an important piece. Because what that then does is it helps prepare individuals that most likely are working for a company to be more knowledgeable about how scammers work. And be able to take that skill set to whatever the setting that they’re in their work setting that they’re in. Right. So I help them to be more aware of what’s going on. If they can identify in their personal life, then they can also identify in their business life, whatever that course may be.
Barb 3:33So you know, it used to be that we were worried about our grandparents getting scammed. Is that still the case then?
Karen 3:39Well, it is for certain types of scams, but in a general sense, anybody can be scammed. And we know because we we examine the database from scam tracker every year to make sure you know what’s true, what’s changing what’s trending, but also what’s trending in terms of who’s more vulnerable. So the other thing that scam tracker gives us is a database set that is so broad that it helps us to to use our mandate of prevention to help prevent scams, right do do it in the in that manner.
Karen 4:18What the Better Business Bureau did this is on an international scale is they created a number of scams of a particular type, but also keep where their money is being lost and the degree of money being lost. So those three things are multiplied out together to see who’s more vulnerable for a certain type of scam. Okay, take that information and we can do a deeper dive to see if it has an impact on one gender more so than another or one age group. More So then another So getting back to your question about, you know, is my grandmother or grandfather more at risk than, you know, my 18 year old son or daughter? Well, yeah, probably truth be known, they’re probably both at equal risk,
Barb 5:16At equal risk. And you know, as a parent, I actually worry less about my parents. And so, you know, grandparents, my I’ve lost my grandparents was just my parents at this point, I worry less about them, because they’ve been using the technology long enough now that, that they’re a little bit more prepared for what might be out there. But my kids are in their, their teens. And my daughter in particular, she, she doesn’t believe that scams are really a thing. We actually had an extensive discussion at home the other night, it was quite funny. And we were talking about all these scams, because my son was doing some research. And to my daughter said, well, there can’t be that many of them. I said, Well, actually, there’s millions and millions of scams, and you know, people stealing money. And her comment was, well, they can’t be making a living doing that.
Barb 6:13I said, Yeah, they they actually are making a living. That’s why they continue their her rationale, this was quite cute. Her rationale for why this didn’t ring true for her is because, well, what would their neighbors think? Wouldn’t they know that they’re doing scams? If they don’t leave the house, then they must be scamming. And he said, we’re in the middle of COVID. Nobody leaves her house. That’s not a rationale anymore. But in her, you know, 14 year old mind, that was, you know, she knows what our neighbors do. And our neighbors know what we do. And so in her mind, there’s that reassurance that says, well, as long as everybody knows what you do, then you can’t be scamming people. And of course, there’s so much more to it. So I would think that, you know, teens and youth in particular right now, they are probably very susceptible to, you know, just starting talking to somebody online, meeting someone and giving away too much information. When you look at the database, what are you seeing?
Karen 7:25So what we see is, I mean, it rings true, what you’ve just described is, is exactly what happens, awareness is the one of the best predictors of being able to identify and avoid a scam. So if you’re in business, the more that you can do to ensure that your employees have that knowledge base, the better protected your business is going to be. do all kinds of things on an engineered level. But your last line of defense is going to be your employees. So you, you need to do something there. And in terms of what the what our database tells us about that risk, it’s, for me, it’s a really interesting correlation. Before I came to the Better Business Bureau, I worked for 10 years with the Workers Compensation Board. So as I was on the board, and then here’s the parallels devising, the age group that is most at risk for an injury at work is exactly the same age group that is most at risk to be scammed. And that’s the, the under 35 h hurt when you look at it, you know, so why is that? Well, first of all, all built us so that we’re more risk taking the younger yard.
Barb 8:54Yes, absolutely.
Karen 8:56We also move quicker. So in the age of technology, it’s a little bit different, you can very quickly click on an ad, you can click on a link and you don’t give you know you don’t think about the consequences of that. So number one protection. What I tell repeatedly to any interest group that I’m giving an awareness session on on scam prevention, is if you remember nothing else, don’t click on ads, don’t click on links. If you really love that pair of running shoes you see in the ad, open up a new browser, find that company, find those runners and buy them that Wait, take the extra five minutes to do that piece of research. The other example I’m gonna I’m gonna actually encourage them to do even more than that, but at the very least, don’t click on that direct link to get scammers you know that the age of the internet now, it is a bonus in turn So being able to do business, no question about it, even if the work of the Better Business Bureau, you know, we’ve been around for over 100 years. And can you imagine handling 600 a year combined in a paperweight? You’re difficult for a quarter of a million inquiries that we do in Saskatchewan? How the heck could we do that with five staff?
Karen 10:27You know, it would be virtually impossible on a paper basis. Exactly. But with these, it’s a blessing, we can do computers, it’s a blessing. But the flip side is scammers also have a really good platform to do their work. And yes, for most of them, this is their full time job. But you have to say about it’s not just you know, some lone person sitting on the couch in their basement trying to scam somebody or try to see if they can figure out how to avoid the blocks that security features that are put in place for business.
Karen 11:03They’re doing it for fun. But that’s not the scammers that are causing the most grief. The most is coming from organized crimes that use it for money laundering, or foreign bodies that use it to, again, either launder money or to find secrets to disrupt economies. You know scamming is one of the biggest detriments to the economy. You know, yes to trust in the marketplace disappears when you’ve been scammed. You are ever more fearful, you’re you, you just don’t spend the money, you’re very more you’re more careful about what you’re doing after that. So the That’s right, trustworthy marketplace is harmed by scams.
Barb 11:53And in fact, that’s exactly what you do is help build consumer and business trust in the marketplace. So it makes perfect sense, then that that you’re so I wouldn’t say involved, but you’re you’re so committed to you know, making businesses aware of these scams. So when you look at your role as the Better Business Bureau and all of the under kind of like the word underbelly today, I don’t know why. But But all of this nefarious stuff that’s happening. How How does a business protect themselves because it’s not just small business. We heard a story I think it was up in Saskatoon, the city of Saskatoon was scammed for a large amount of money. And so it’s happening to large red tape organizations as well. So how do you actually help protect them? How, besides, you know, checking the link, what else can we do?
Karen 12:52So if you’re a business, there’s some really good things, you need to think about analyzing the risks in your organization. So enterprise risk management is one of the greatest tools, enterprise risk management isn’t just about the financial side of risk, but it’s also about cybersecurity risk, privacy risks, all those things. So if you can get a handle on those types of things, then you’re going to be better prepared. So how do you get ahead? Well, so things like having documentation on your processes. And I’ll give you some really good examples.
Karen 13:33A purchasing policy, if you’re purchasing policy is built so that you have independence of of control that you have somebody else that is double checking the work before it goes to the next stage, all these steps, yes, they make things take a little bit longer, but they will also serve as as protection.
Karen 13:55So let’s take some real examples of that. If somebody in a in your in the business gets an email from someone who says, Hey, I want you to redirect the second installment of this, of this project, to this new bank account, we’ve made a change in our processes and we need there.
Karen 14:19Okay, all right. So what kind of process Do you have as a business to verify that that is really coming from the initiator of that of that project, the owner of whoever that that project belongs to rate though you need to double check. And so it’s somebody else in your setting would review that process would verify that the the checks and balances are own place?
Karen 14:45Most of the time, it’s getting a second confirmation that they really did send that email because they could mass emails, right? Yeah, exactly. You pick up the phone and you call that company say Hey, I just got an email, you want me to redirect the second installment to this new bank account? Did that really come from you? Yeah. Okay. You’re verifying it there, you know, many of the transactions involving purchases. And we’ve seen some he has even mentioned with the city of Saskatoon, other municipalities, government entities to be frank are targeted because yes, one of the things that they’re required to do is public disclosure of contracts that are being accepted, and the details of it so that, you know, their ratepayers or taxpayers have full disclosure, but scammers also use that information.
Karen 15:41So you need to find a way to provide that information for transparency purposes, but how steps in place to mask it? Or to confirm if things change so that you’re not subject to a scam of some type. But yeah, exactly. municipalities are nonprofits. They’re all at very high risk small bits not to sweat about small businesses. It’s Gambit there. Yeah, the thing is, is that when money is is being scammed from a municipality, it’s not just the municipality, it’s whoever the company was that they were supposed to be dealing with. That money is now diverted.
Barb 16:22Exactly.
Karen 16:23Oh, you know, that’s, that’s a prime example. You know, another one is redirecting the payroll. So many of us now do our payroll electronically, it’s so easy. Why would you have to write out checks and, and look at the tables and manually do some calculations. But again, if somebody one of your employees send something to HR, or whoever’s doing the payroll, your bookkeeper, if you’re small, and says, you know, I’ve got a change in, in my bank account, I want you to send it here. Again, don’t accept that as positive. You know, in our world, it’s trust, but verify. So because you’ve got it from one source, you verify from another source, again, picking up the phone. If they’re, if they’re right in your office, walking down the hallway and talking to them. Hey, I just got this email. I just really from you.
Barb 17:21Yeah. So one of the things that I’ve always wondered about some of these, especially the financial scams, the larger scams, as you said, This isn’t one person sitting in their basement dreaming up all sorts of crazy ideas as to what they can do. Typically, it’s a group of people, and there’s call center staff and there’s, you know, a supervisor of some sort. Does the entire level of the scam, know that it’s a scam? Or is it maybe just the top couple of folks who know, and the people on the front line think it’s legitimate? I’ve always wondered that when I get some of these phone calls. Have you heard anything? Do you have any sense for how how knowing it is?
Karen 18:07Yeah, so so it’s not like I’ve done the research myself, because I’m not on a team that does that kind of research. But we rely on our network of Better Business Bureau offices. And in particular, there’s an inch, we have an international association that we’re all part of all the BBB offices in the world. That research arm has done the research that deep dives to see where it’s coming from. So you’re right, a call center in India or Nigeria or Russia, China, wherever it happens to be. Mm hmm.
Karen 18:48Generally speaking, the company is known to be a bad actor there, but they don’t necessarily have proved from a government inspectors as perspective to shut them down. So and I can’t tell you I you know, I was really impressed with the US. I think it was the second year that I was part of the Better Business Bureau world that we got word that a call center in India that had specialized in tax scams.
Karen 19:17They had a Canadian Division for CRA scams, and they had a US division for for tax camps in the US. I mean, that’s big business. It is but the Indian government could never be you know, they could never find a way to legitimately close them down. Okay, information from scam tracker was provided in conjunction. So in Canada, we worked with the Canadian anti fraud centre, the RCMP, and in the states they were working with the with the the FBI side, well, joint effort, that database information of file scams from victim gave them the proof that they needed to go in And shut it down.
Karen 20:01So you know, when I remember it was August of 2016. Did a midnight raid? arrested over, you know, over 400 people that night? That’s their call center. You know, so that was only one shift. Now the owners of the company fled the country came next year, they caught them when they came back to visit family. Oh, you know, so in Canada, the extent that it that it made a difference. It’s tax scams in Canada that that year, the day before the the attack, we were averaging about 200 scam reports a week. Now, that dropped down to less than a dozen after that call center was shut down. Hey, let’s build now, but not hate same extent. And, you know, because, you know, people acquire new skill sets. Yeah, buy new equipment to make a lot of money off of their scams, and they can afford good
Barb 21:05Stuff, huh? Yeah. Isn’t that the truth? They can actually afford the good stuff sometimes before the rest of us? Yeah, I hear you. So the scams, have they changed during COVID?
Karen 21:18Well, they have the type of scams have changed somewhat. So I’d say that in Canada, for example, the number one scam across Canada, was advanced fee loans. So if you think about why people are looking for loans, well, you’re sitting at home and probably have extended their credit further than they would like. So they’re looking at a way to consolidate some of that, they’re looking for a really good deal on on a loan. So they’re just searching, blindly searching the internet, and not doing the research to verify that.
Karen 21:59First of all, if the if the company itself is legitimate, and what kind of a rating they have. Remember that, in addition to the scam tracker database, we also hold the database of legitimate businesses. It’s free business profiles, but once they’re in our system, we’re going to start raiding them anywhere from eight plus to an app, what we want potential buyers to do and I don’t care if it’s a consumer buy, or if it’s a business to business buy.
Karen 22:30If you’re a business, do you know the rating of the businesses that you’re dealing with? Find out? Anyway, so I digress, the the business profile and the rating. So you check that out, you make sure that who you’re dealing with is legitimate. The information that we have in that business profile will help their website and their LinkedIn profile or their Facebook or whatever it is that they’re that they have displayed? Exactly.
Karen 23:00What you see on the other side is not the same, then, you know, I mean, that’s a really good indication that somebody is doing some kind of a phishing attack, right? So exactly, we’re talking about a loan. And it’s a company who is who has set up or it’s a scammer, who has set up a pretend website, redirecting the information to them, what they want you to do is reach out, excuse me through their, through their portal that they created.
Karen 23:31They may even initiate a phone conversation with you, Oh, you want to consolidate your credit cards, or you want to whatever it is, whatever it happens to be. While there’s a fee charged with that? Well, of course, you know, right off the top that consumer loans are it’s illegal to charge an advance fee for a consumer loan. It’s up to Canada, and it’s illegal in the States. So number one, if they’re asking for a fee, hang up, delete the email. Go on another site to get get rid of it. It’s going to be a scam. Yeah. Yeah. You know, and the group that is more likely is most vulnerable for this is males under 50.
Barb 24:16Oh, isn’t that interesting.
Karen 24:18Though, in Canada, that’s the profile that we have of the ones who are more likely to to fall for this type of scam, that it really this one in particular really hurts the marketplace. So if if we look at the top scams in Canada, the average scam loss is $200. With the advance Fee Loan, it’s $2,000. So we’re talking about a substantially substantial amount of money.
Karen 24:46Number two, scam is online purchasing. While on this one. It’s women who are more at risk. And the average scam there is about $700 loss. So we’re We’re doing online shopping instead of going to the water cooler and refill snack water, pouring a cup of coffee. Yeah, going into another browser and looking at some apps for new shoes or hats or whatever.
Barb 25:17That’s right. We’re all being discouraged from sort of socializing right now. Exactly. Karen, we’re almost out of time. We’ve only got about a minute left. In our show today, can you quickly tell folks how they would find you online on the social channels and on your website?
Karen 25:33I sure can. So we have links on our website. And our website is easy. It’s BBB dot org. So bbb.org. From there, you can find all the scam reports, the deep dive ones, you can find all the business profiles, you can have a look at whatever vendor you’re using, see what rating they have. If you don’t find a business in there, you can have asked for one to be created. There’ll be a pop up asked for it. And our phone number, we still do business by phone. We have a toll free number to cover anywhere in Saskatchewan, or local numbers. Websites open 24 seven.
Barb 26:14Excellent. That sounds fantastic. So if you are interested in more information, either on the scams that are out there, or in protecting yourself and the work of the Better Business Bureau, just reach out to bbb.org. And I know Karen and her team would be more than happy to chat with you.
Barb 26:30Thank you, Karen, for joining me today in talking about such an important issue for all businesses, understanding the type of scams that are out there. Understanding the prevalence of those scams is so important nowadays, so we all have to protect yourself.
Barb 26:46If you’d like to be a guest on the show, you can email me at Barb at Google girl.ca or reach out on Facebook and Instagram at above the fold. ca and just a reminder, you can even submit questions in advance of our show, just on our Facebook page. I’m your host, Barb McGrath, local business owner and Google girl. Remember, you worked hard for your success. Don’t keep it a secret. Bye for now.