Fraud Advice

I am seeing an increase in the number of suspicious new customer enquiries across a number of trade sectors. Historically fraudsters used to prey on suppliers of easy to sell high tech goods, but I have seen a number of others looking to target most sectors where goods can be easily sold on again, anything really from food to metal.  The notes below will hopefully help you to avoid being scammed.

Typically the enquiry will be unsolicited from a company that will have filed 1 and probably 2 sets of extremely good figures, normally within a very short period of their year end. These will usually be a full set of accounts with profit and loss when by size the company would only need to file abbreviated accounts at Companies House. The figures will show an impressive set of results.

The fraudsters will have registered the company 2 or 3 years earlier and will have filed accounts and annual returns. They might have missed 1 or 2 deadlines, as they will have a lot of these companies registered. If this is the case there might well be1 or more striking off notices form Companies House that will be discontinued once the filing breach is rectified. They will just have made up or copied figures in the accounts to make the figures look like a thriving business. A check on a credit reference report will probably show a strong credit limit recommendation, which is based on the fictitious information filed at Companies House. You will probably notice that although the company has been “trading” some time that the credit report shows only a recently established rating. Take great care if there are multiple searches in the last month with little or no historic activity. This is an extremely strong indication that all is not well.

The directors will probably not be listed as directors of other companies and will give the business address as their home address.

Some key points to consider when your sales team receives an enquiry:

An unsolicited enquiry with an urgent delivery deadline, they will be persistent and will put you under pressure.

They might supply annual accounts, bank references and bank statements with their credit application.

Be careful if the order is from a company based outside of your area for goods that would be readily available to them locally.

The buyer will not be too bothered about price, why should they be when they are not going to pay you!

They tend to have Gmail/Hotmail/Yahoo e-mail addresses; these are not commonly used in business.

Conflicting sectors, the company being in a different trade sector to the supplier.

Phone numbers provided will normally be mobile. Your call might well go through to voice mail and you will then get a call back within a few minutes.

Goods to be collected from your warehouse in unmarked vans or delivered to a 3rd party or freight forwarder. Carefully check orders and delivery addresses, use Google Maps to have a look at the delivery address. Phone the company head office to check the details if you are not sure.
If they have one the Web site will look OK, but will be basic and light on detail, landline, address etc. I have seen photos of famous people in the meet the team section anything from Boy Band members to International Cricket umpires.

Take care with trade references; it might well be the fraudster or their associates that answer the phone.

Check their VAT number with the EU Vat checker http://ec.europa.eu/taxation_customs/vies/

A variation on this theme is assumed identity fraud. The basic principle is that you receive an order that appears to be from a well-respected and creditworthy company. The points mentioned above apply and in addition the following are common.
I have seen a case where a Farmers co operative from East Anglia wanted a delivery of computers to an address in Tower Hamlets, sounds unbelievable? The company supplied the goods because the credit report was good and guess what?

Fraudsters also target investment or holding companies and set up an e-mail address with reference to the company name. They will look for companies with a strong balance sheet that will sail through automated credit scoring with most credit reference agencies. As the company will not have previous traded there will be a big gap between the business being set up and enquiries being made for credit checks with the credit reference companies. As the business would not need trade credit there will probably not be many references on the likes of Google.
Beware of fake websites, always search for an alternative to the address that you have been given as impersonators often setup a very convincing looking fake site. The Who Is web checker is helpful and will show when a website was registered.
Look out for spelling and grammatical errors.
Beware of last minute requests to change the delivery address and 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 off-loading the goods.
Be wary of orders from existing customers that do not follow their established pattern. Check the quality of purchase orders.
The golden rule is that if it looks too good to be true then it probably is.
If you do get caught out then you can unfortunately expect to receive regular enquiries of a similar nature.

There is some helpful advice on www.actionfraud.police.uk/resources-fraud-advice

The golden rule is that if it looks too good to be true then it probably is.

As losses due to assumed identity fraud are not covered by Credit Insurance policies getting caught out will be upsetting, expensive and time consuming.

Summary
Article Name
Fraud Advice
Description
Notes on how to spot fraud.
Author
PHCIS