What's payment fraud?

This refers to any illegal online transaction by fraudsters or customers. Fraudsters use a victim’s personal and banking information to make online transactions. Customers pretend to be a victim of fraud or have issues with their purchases to get their money back. Payment fraud affects your business negatively, whether it's fraudsters or customers that do it.

Recognize the types of payment fraud

Fraudsters use a variety of scams and tactics to steal personal and banking information to make fraudulent online purchases.

Fraudsters intercept a transaction in the middle of the sales process. They change bank account information to receive payment or products and services.

Clients make claims about a product to get their money back. This usually occurs when they order items from a business with their own banking information. When the client receives their order, they call their bank stating the transaction was unauthorized or they contact your business saying their order was lost or damaged.

Fraudsters request a refund and say they've returned the item, but the vendor doesn't receive it. Sometimes, fraudsters may send one item back but claim there were more contents in the package and demand a full refund.

Stay safe with our tips

  • Be upfront about your return policies to avoid any unauthorized refunds
  • Work with a verified payment processor to collect and analyze data
  • Provide a secure e-commerce platform where customers can create an account and log in to make purchases
  • Use a multi-factor client authentication system for a strong and secure experience
  • Keep your networks secure and regularly update your network security systems
  • Use strong passwords that are long and complex to protect accounts and information
  • Monitor and verify all important information during a transaction, such as the shipping address, IP address, date and amount
  • Invest in a strong fraud management strategy that involves a comprehensive approach that uses fraud prevention tools

Notice anything suspicious? Let us know

Explore more about payment fraud

Canadian Anti-Fraud Centre Opens in a new window.

Report fraud when it happens and track the latest data on fraud happening in Canada. 

The Little Black Book of Scams Opens in a new window.

Download the Canadian Competition Bureau's guide to scams in 8 different languages.

Business banking fraud (PDF, 935 KB) Opens in a new window.

Discover common types of fraud that target small- to medium-sized businesses.