How to Spot A Fraudulent Order

23 Jul

Fraud can come in all shapes and sizes. One of the most popular forms of fraud is when a potential customer either lies about the credentials of their own business or pretends to be apart of a more highly regarded company. Both cases could be equally harmful to your bottom line and it can be very difficult to reclaim any of the goods sold. Here are a few things to consider in order to avoid this situation.

Make sure you are dealing with the right business

It always pays to do your due diligence on any order you receive, especially if this order is from a new customer or comes through email. Many fraudsters will try to arrange the whole agreement through email, coming up with creative reasons for why they can not talk over the phone. This should be seen as a red flag and you should always try to establish contact over the phone unless there are extenuating circumstances that you can independently confirm. Even if the order does come over the phone, beware of the phone number that the call is coming from. Numbers that start with 888 are very rare among legitimate business, but very common among fraudsters. Another possible sign is if the area code of the business does not match the area code of the number calling. If the person you are connecting with says one thing and the company’s public website says something else, that could also be a red flag. Clearly, there are exceptions to this and any one of these does not mean the person is committing fraud, but it is important to keep your guard up if you see any of these signs.

Do not let your guard down once a sale is made

Just because credit terms have been agreed to and the customer has paid on time for the first few months, you may not be in the clear. Some fraudsters will build initial trust by paying their initial small orders on time for the first few months. Once they build trust, they will place larger orders and pay late, if at all.

Protecting against fraud is a hard job and you may not always succeed. If you believe you may have been the victim of a fraudulent order, we recommend contacting a lawyer in order to figure out the best course of action.

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