Credit Insurance: Fraud spotting tips part 2!
Buyer impersonations are becoming more common! As the name suggests, this type of fraud is where a fraudster impersonates an established creditworthy company by placing orders in their name but then requesting it's delivered to a rogue trading address or they offer to pick up the goods themselves. The supplier would, as normal invoice the legitimate company only to be informed that they didn't order the goods. Our Insurer, Atradius, informed us that the main goods that are targeted by this type of fraud tend to be food (fruit, veg, meat) and IT related products, but the threat is open to all.
Points to look out for:
- A professional looking website but with little functionality
- The buyer is generally not interested in price with little or no negotiation
- An unusually short period between first contact, order and delivery requested
- The buyer requesting to collect goods themselves often in unmarked vehicles
- The buyer changing delivery address at short notice
- Conflicting sectors, the buyer being in a different trade sector to the supplier
- Buyer being too ready to supply information requested such as trade references, accounts etc
Many points are similar to Short Firm Fraud, but a difference would be the company they are impersonating would be well known rather than a new company.
Suppliers should carry out checks to ensure their customers are genuine:
- Take a contact name, landline phone number, website address - and check them out
- Do not rely on contact numbers provided by the buyer, look up alternatives for the company and ring those asking to speak to the individual. This will enable you to verify if that person actually works for the company or whether they are using genuine names that when contacted for real have no knowledge of the contract referred to
- Google street view the delivery address provided to validate its authenticity
- Impersonators usually use mobile telephone numbers and gmail/hotmail email addresses so beware
- When reading any documents supplied ask yourself if the grammar and spelling used are what you would expect from a professional business
- Beware of fake websites, always search for an alternative to the address you've been given as impersonators often set up very convincing secondary sites with a slight difference in name to that of the genuine site
- www.whois-search.com provides a free service where you can check the creation date of email/web domains to help clarify the authenticity of a business
- Beware of last minute changes to delivery address, don't change the delivery destination once goods are in transit, educate vehicle crews to deliver only to the specified destination and to report any attempt to change the delivery destination before offloading the goods
- Beware of urgent or casual orders from existing customers; insist they follow usual purchasing procedures
- Request a VAT number and check it's validity on the EU site link: http://ec.europa.eu/taxation_customs/vies/
Again, similarly to Short Firm Fraud, there are ways of reducing the risk of being caught out by staying vigilant. Atradius, our credit insurer quite often conditions credit limit decision letters, stating they should be aware of buyer impersonators. This makes our clients aware that there could be fraudsters trying to impersonate their customers and therefore take the relevant actions to make sure the order is genuine. Being vigilant can stop you and your company from being in a very sticky situation.
If you feel you have been targeted it is recommended that you report it to Action Fraud, which is the UK's national fraud reporting centre.
Tel: 0300 123 2040
Web: www.actionfraud.police.uk