Fake Marketing Companies Canada

Canadian enterprises face significant challenges like securing local economy and limited resources from the government for expansion and development. Yet one of the greatest challenges faced by Canadian companies is the lack of transparency and integrity from marketing companies. As a result, local enterprises have lost considerable resources and time being mislead by marketing agencies that may seem legitimate at first glance. Marketing is a crucial way to reach and engage your target customers and though there are challenges with finding the right provider the right marketing agency, however, can be a strategic partner in future and predictable growth. Consult with the team at Profitworks today. Utilize the lessons learned below to avoid marketing scams faced by Canadian businesses. 

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Executive Summary

 - The main scams marketing companies use are directory listings and office supplies fee collections

 - Perpetrators of marketing scams utilize high-pressure tactics and alleged pre-approval by company officers to force companies to pay

 - Thankfully, a number of these companies have been shut down and their Chief Executives have faced criminal charges though some are still at large

 - Working with the right marketing agency helps promote sustainable growth while a misaligned partner can cause debilitation

Though marketing companies that offer entry-level jobs to new grads represent the largest segment of marketing company scams in Canada, there are subtle agencies that over-promise but fail to deliver on their growth metrics for their clients.

Montreal Telemarketing Scam - Express Transaction Services caused $170M in SMB Losses

A Montreal company defrauded hundreds of local businesses by sending out products that were not ordered and then having sales agents call to retrieve payment. This scheme generated over $170M between 2001-2007 as reported by CBC. The federal Anti Fraud Centre noted that thousands of businesses were impacted by this ruse and people connected to the organization faced criminal charges. The ploy hinged upon having aggressive collections officers call unsuspecting businesses 5-6 times a day asking the business owner to pay. 

Lessons Learned: Establish a paper trail, request proof of purchase along with the name of the officer in your company who approved the purchase. Do not pay for products just because there is an angry person on the phone. Small business owners would have benefited by calling the Canadian Anti-Fraud Centre 

Newfoundland Government Sponsored Call Centre Scam - Michael Mouyal caused $136.8B in SMB Loses

Mouyal received a $200K grant from the Canadian government and used it to set up a call centre in St. John's Newfoundland to defraud Canadian businesses. The company operated under numerous business names noted by the Canadian Broadcasting Channel including Merchant Transaction Supplies, Merchant Supply Services, and International Business Directories. Through deceptive marketing practices, the company generated $136.8 Canadian dollars and defrauded hundreds of local businesses by representing that they were existing customers with a debt, often charging up to 700% the market value of products.

Lessons Learned: Request internal contacts that authorized the purchase, work together with other departments to confirm obligations prior to issuing any payments. Communication is key here and just because there is a difficult voice on the other side of the line does not mean professionals need to bend.

Alberta Company Ambus Registry Defrauded Charity and Not-for-Profits - Organizations lost $4M

Ambus Registry would often call up unsuspecting institutions and not-for-profit agencies to strong-arm them into signing contracts. These high-pressure tactics led to numerous concessions resulting in $4M in losses for businesses across the province.

Lessons Learned: Refuse payment if sourcing and procurement officers are uncertain of orders placed. Further cross check marketing place pricing for products to ensure fair and competitive costs are being carried.

Ontario based DataCom Marketing - Defrauds companies of $158M

Using the business directory marketing scheme strategy, Bernard Fromstein and company convinced local busineses to pay out over $150M over the course of 10 years. They did so by alleging that a company officer had purchased a business listing and that someone in the company had already authorized the renewal. CBC reports that the Chief Executive of the company faces jail time as a result.

Lessons Learned: Vendors typically with work with warm contacts rather reaching out to another company officer. It is highly suspicious that someone else has approved a purchase and that you would be required to process payment.

Mystery Shopper Scam - Defrauds thousands of Canadians of personal information

The typical ploy runs the following course: a job applicant applies and received a new role as a mystery shopper. They are asked to deposit a cheque whereby they can withdraw funds for their mystery shopping assignments while forwarding money to another mystery shopper. Unfortunately what people will find is that after they withdraw and transfer their money, the original cheque bounces and the victim is left with no job and no money. This a common tactic used by fake marketing agencies to con unsuspecting job seekers as mentioned by Better Business Bureau.

Lessons Learned: A legitimate employer or client will never ask you to withdraw money from your own banking accounts, be wary of any requests of this sort.

Event Marketing Scams - 3 weeks of unpaid work for employees

A number of local event marketing companies employs entry-level workers to stand at a booth to introduce shoppers to new products and promotions. This is a common arrangement for new brands entering the Canadian marketing scene that require a direct marketing approach. Direct marketing involves having someone demo and display products while trying to entice shoppers of a department or bulk store to purchase the product. Often times the event management companies will take shortcuts in paying and training their employees. A number of employee reviews have been posted and job seekers should be aware.

Lessons Learned: Ensure companies that are offering you a role or contract are valid. Ask for references to provide better insight into the client or employer you will be working with.

Canadia businesses should stay abreast of scams and potentially harmful organizations -  utilize the Anti-fraud Centre's resources like the Black Book of Scams provided by the Canadian Government.

Fake Followers Scams - Supposed growth hacker selling fake followers on social media

Having followers on any corporate social media account is a sign of market support and confidence. There are an increasing number of social media marketers that offer companies the ability to rapidly grow their follower base. However, many companies do not understand social media let alone are aware that fake followers can be purchased. G Shift covered this issue along with great tips on how to spot fake followers or how to validate a social media influencer before you sign on with them.

Lessons Learned: Validate fake followers using social media auditing tools like Status People.

Resources for companies who have been affected by fake marketing

Here are some great resources to determine whether the company you are being contacted by is legitimate or otherwise:

1. www.ripoffreport.com - a single source of rip-offs and scams.
2. Better Business Bureau is another great website to check on the company that is soliciting or offering you something that sounds too good to be true
3. Trusted Marketing Advisor - work with an established marketing advisor to help you debunk a marketing hoax or scam.

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