Three years after achieving his goal of owning a farm close to his childhood home, Matt Penney and his partner were swindled out of $20,000 in a scam that shattered their business aspirations. Penney expressed how disheartening it was, stating, “It just kind of kills your dream. Kills the momentum – that’s the hard part. It’s not just a money thing. It just affects every element of our business.”
In April, Pengrove Farms, known for its high-quality locally sourced meat and regional products, was approached by a company posing as a catering business. Initially, everything seemed normal with no red flags, but issues arose during the subsequent order, revealing potential vulnerabilities for small Quebec businesses targeted by fraudsters.
By mid-June, Square, the payment processing platform used by the farm, informed the family that all transactions with the caterers, amounting to about $20,000, were fraudulent. The family was then held responsible for reimbursing Square for the losses.
Alana Cosgrove, Pengrove Farms’ co-owner, described the situation as critical, mentioning, “It’s kind of like a make-or-break type amount. We’re here basically full time. We have a young family.” Despite the setback, she emphasized the need to pay suppliers to sustain their operations.
The perpetrators of the scam had cultivated a sense of trust with the couple, engaging in conversations, making jokes, and even visiting in person to collect orders, creating a facade of legitimacy. According to Andréanne Bergeron, a criminology professor at L’Université de Montréal, fraudsters exploit trust to execute sophisticated schemes, leveraging psychological mechanisms to deceive victims.
In Quebec, payment platforms lack the regulatory oversight of banks or insurance companies, leaving merchants liable for chargebacks. Frédérique Lissoir, a business law professor, highlighted the absence of protections for businesses under current laws, contrasting with measures in the European Union and the United Kingdom.
Square, in response to the incident, acknowledged the issue of fraudsters targeting small businesses and emphasized their commitment to addressing such cases individually. Despite the challenges faced, Pengrove Farms is mobilizing support from the community and exploring avenues for legislative changes to safeguard businesses from similar scams.