How do I spot a fake business-for-sale listing?

A fake listing may look polished. The more useful test is the request attached to it: send money first, decide quickly, or deal only through a channel the other side controls. A request you cannot verify is a reason to pause and check, not proof that someone is a fraudster. Asking who you are dealing with, and checking the answer, is a reasonable step with any seller or broker.

What the Canadian Anti-Fraud Centre warns about

The Centre’s investment fraud page says fraudsters offer business or franchise opportunities promising high returns. It tells readers always to be suspicious of unsolicited investment opportunities (even from friends and family), higher-than-normal returns and high pressure tactics. It also says never to rely on the website and phone number included in unsolicited materials, and to do the research yourself. These warnings are written about investments, and buying a business is a different transaction, so use them as prompts to check rather than as a test that settles anything.

Checks you can run yourself

• Ask for the corporation’s exact legal name, then search the registry that governs it. Corporations Canada lets you search for a federal corporation, and checking good standing explains which registry applies.
• Find the seller’s or broker’s contact details independently, rather than relying only on those in the message or listing you received.
• Ask for a call or meeting and for the same answers in writing. Note whether the story about the reason for sale stays consistent.
• Ask for documents before any payment. See red flags in a business for sale for questions about the numbers themselves.

Money before documents

A purchase agreement may provide for a deposit, so a request for money is not wrong in itself. What matters is who it is paid to, how it is held and what you have confirmed first. Ask your lawyer how a deposit should be held and when it should be paid, and do not settle that alone under time pressure. Be cautious about any demand to wire money before you have seen documents and confirmed who you are dealing with.

If you think it is a scam

Stop sending money and information. The Centre says you can report fraud online whether you are a victim or a witness, that you can report anonymously, and that it recommends reporting to the Centre even if you are not a victim. If you have been a victim, it says to contact your local police as soon as possible.