When listening to the news, there are moments I feel discouraged and often wish I had quick and easy solutions to the many situations and challenges that exist in our world. So on August 15, while doing the evening dishes and hearing a familiar scenario reported on the radio – one for which there is a very simple, straightforward and quick fix – I not only felt discouraged but frustrated. Please read this post and share it with every CEO, CFO and VP you know. Let’s do our best to make sure this million-dollar story isn’t on the news again.
What’s the million-dollar story? And how could it have easily been prevented?
The story is about the city of Saskatoon being scammed out of $1.04 million dollars. And while they currently believe they will recover the majority of these funds, the cost of doing so is high, possibly lengthy and maybe futile.
What happened? Someone pretending to be the CFO of Allan Construction, a company working on the rehabilitation of the Sen. Sid Buckwold Bridge, requested a change of bank account for an upcoming payment by electronic communication (the city has not specifically shared that it was email). Staff followed through on the request and Shazam! – $1.04 million disappears.
I’ve written previously about two similar situations, a $100,000 loss to the City of Ottawa, and the much more costly $11.8 million scammed from Edmonton’s MacEwan College.
All of these incidents – and many others that may not be reported – point to how we have been so seduced by email that we no longer question its validity. If it is on the screen in front of us and looks like it comes from the right place, we cease to question. Put more bluntly, we cease to think. And while this wouldn’t be much of an issue if it was $10, putting trust in a message that involves changing anything about how we spend, pay, deliver millions of dollars is … ridiculous!
Alexander Graham Bell was led to his invention of the telephone because of his interest in and passion for working with the deaf. I suspect that he’d be quite troubled by how “deaf” we’ve become even with his invention so easily at hand.
The very quick solution to any request that suddenly changes how funds are transferred is … pick up the phone! Speak to the CFO who is requesting the change. Confirm the change in real-time. Have a conversation. Stop trusting words on a screen.
I’m amazed this one important step is not already part of every organization’s controls and checks. Are we somehow worried we’ll reach voicemail? Please trust me when I say that calling a CFO with the message, “I have a quick question about your upcoming $1.04 million dollar payment,” pretty much guarantees they’ll call you back. This is a phone call that won’t take long, won’t cost much – if anything at all – and it will save you time, embarrassment and lots of money.
Please … tell your staff … pick up the phone! And as I said at the beginning, do share this post with everyone responsible for their company’s funds. Yes … let’s do our best to make sure this million-dollar story isn’t on the news again.
4 thoughts on “How to Save $1.04 Million”
In the finance world, instructions by email or voice mail are not enough. We are required to get real-time voice confirmation.
Thanks for this comment, Mick. It is odd that this procedure has been abandoned by other industries and companies. Why I wonder? It is simply that staff aren’t trained properly? Or is electronic communication making us all more thoughtless.
How can this even happen? When I worked for a large corporation, I spent 6 month’s in the Accounts Payable department helping implement a new system. I actually took over the supervisors desk and processed her accounts. I can say with 100% accuracy this would not have happened back then. Several signatures were required on an address change for a company and it was closely audited and even more signatures for larger companies.
Thanks, Calvin. This provides some insight, I think. We have become to “busy” to organize “signatures”. We trust that electronic communication is “as good as” a signature. Oh my!