Three years after achieving his lifelong dream of owning a farm near his childhood home, Matt Penney and his partner were swindled in a scam that deprived them of $20,000 and thwarted their business expansion plans. “It shatters your dreams. It kills the momentum – that’s the toughest part,” Penney expressed.
In April, Pengrove Farms, known for selling high-quality locally sourced meat and regional products, was contacted by a purported catering company. Penney recalled, “Everything seemed normal; we didn’t notice any warning signs after the initial order.” However, issues arose during the subsequent transaction, leading to suspicions about the legitimacy of the payments made by the catering company.
In mid-June, Square, the payment processing platform used by the farm, informed the family that all transactions with the caterers, totaling approximately $20,000, were fraudulent. The family was then held accountable for reimbursing Square for the losses incurred.
Alana Cosgrove, co-owner of Pengrove Farms, described the situation as a critical financial blow, stating, “It’s a make-or-break amount. We dedicate most of our time to the farm and have a young family.” Despite the setback, the family must still settle payments with suppliers to sustain their operations.
The fraudsters had built a rapport with the couple, engaging in friendly conversations, and even visiting in person to collect orders, leading to a false sense of trust. Andréanne Bergeron, a criminology professor at L’Université de Montréal, explained that perpetrators exploit trust dynamics to execute elaborate scams, preying on the victim’s inclination to believe in the established relationship.
Quebec lacks regulations for payment platforms like banks or insurers, placing the burden of chargeback liability on merchants. As per Frédérique Lissoir, a legal expert and professor, existing laws do not safeguard businesses from fraudulent activities, leaving them vulnerable to financial losses without recourse.
In response to the incident, Square emphasized the severity of fraud targeting small businesses and pledged to address cases on an individual basis. With insurance companies increasingly avoiding coverage for such frauds, businesses like Pengrove Farms are left exposed to significant risks.
Despite the challenges, Pengrove Farms is seeking community support and exploring legislative avenues to shield businesses from fraudulent schemes. Through a crowdfunding campaign and local market assistance, they have received substantial backing to help recover from the ordeal. Co-owner Cosgrove expressed gratitude for the overwhelming support and vowed to raise awareness about the issue.