Cheque fraud continues to be a growing threat in Canada, costing businesses and organizations millions of dollars annually. Unfortunately, condominium corporations are not exempt. In fact, many condo boards across the country still rely heavily on cheques to pay contractors, vendors, and utilities — leaving them exposed to serious financial risk.
The impacts of cheque fraud can be severe: financial loss, damaged reputations, and eroded trust among board members and residents. But with the right tools and safeguards, your corporation can reduce its exposure and move toward a more secure and modern way of managing payments.
The State of Cheque Fraud in Canada
Despite the digital age, cheque use remains surprisingly common — and risky. A 2023 study by the Association for Financial Professionals found that cheque fraud continues to be the most frequent form of payment fraud, involved in nearly two-thirds of reported cases.
In Canada, cheque fraud schemes have included altered amounts, forged signatures, and entirely counterfeit cheques. Many criminals exploit vulnerabilities in mailing, bank reconciliation, or approval processes. And while some board members assume the bank will catch any suspicious activity, that’s often not the case.
Consider this: a condominium in British Columbia lost $50,000 to cheque fraud, and the bank involved admitted they “do not verify names or signatures” on deposited cheques. In another real-world case, a business lost over $500,000 due to repeated cheque fraud — leading to its closure and a lawsuit against the bank for failing to prevent the losses.
Clearly, relying on outdated payment methods can have real consequences.
How Condo Corporations Are Being Targeted
Canadian condo corporations are especially vulnerable due to their payment routines and governance structure. Here are some of the most common fraud tactics targeting them:
-
Mail Interception: Cheques are stolen, and payee details are altered before depositing into fraudulent accounts.
-
Counterfeit Cheques: Fraudsters use stolen bank account details to create convincing fake cheques.
-
Internal Fraud: Individuals with access to cheque stock or online banking credentials exploit weak controls to issue unauthorized payments.
Even the most well-meaning boards can fall victim without proper oversight and verification measures.
5 Strategies to Help Safeguard Your Condo Corporation
1. Switch to Digital Payments
Moving away from cheques and toward digital payment platforms can eliminate many vulnerabilities. Secure systems such as e-transfer solutions or automated payment software include built-in fraud protection tools like audit trails and approval permissions. These platforms are increasingly used by Canadian property managers and condo boards alike.
2. Enforce Dual Approvals
No single person should have complete control over payments. Implement dual sign-off requirements for all outgoing funds, and choose platforms that support multi-user approval workflows.
3. Reconcile Bank Accounts Regularly
Assign bank reconciliations to a third party, such as your property management firm or a trusted accountant. Prompt reconciliations can uncover suspicious activity early and act as a critical layer of financial oversight.
4. Educate Your Board and Staff
Hold regular training sessions on how cheque and digital fraud happens, what red flags to watch for, and how to follow internal procedures. Awareness is one of the most powerful tools in fraud prevention.
5. Adopt Best Practices for Vendor Management
Use vendor verification procedures before issuing payments, keep vendor records updated, and avoid accepting invoices from unfamiliar or unverified sources. Keeping records in a centralized, digital platform can help streamline this process.
The Path Forward
Condo boards in Canada have a responsibility to protect the financial health of their communities. As financial threats grow more sophisticated, boards must evolve too — starting with abandoning risky, outdated cheque-based systems.
By modernizing your payment processes, strengthening oversight, and building a culture of accountability, your corporation can dramatically reduce the risk of fraud. The added bonus? Increased efficiency, better transparency, and stronger trust among board members and residents.
Condo living is about building and preserving communities. Let’s make sure our financial systems reflect that same commitment.