Corporate identity theft and misuse can have a devastating impact on companies. That is why Eximbanka has prepared a short guide in which entrepreneurs can learn about the different ways of such theft. Two model examples, as well as recommendations on how to defend against such fraud, will be presented in the latest episode of the series I Want to be an Exporter, which HN is preparing in cooperation with Eximbanka.
Interest in goods in stock
The most frequent case is when a fraudster pretends to be a buyer from abroad. A supposed representative of the management of the foreign company will contact you himself. The fraudsters are usually interested in your goods in stock, which may not even be related to the activities of the company they claim to be. They often present themselves as representatives of large retail chains that are not represented in Slovakia, which makes it difficult to verify their identity. They almost always request deferred payment of invoices.
Eximbanka also provides concrete examples from practice in the aforementioned manual. A company supplying a Slovak alcoholic beverage was approached by a foreign clothing chain. The reason was allegedly to provide Christmas gift wrapping for their clients.
The trading network requested a deferred payment period of 45 days and delivery to a logistics warehouse, which later turned out to be rented. The alleged CEO communicated directly on behalf of the business network. He even sent the statements himself to the trading network he claimed to be.
The guide also provides specific recommendations on how to prevent such fraud. “Check that the email address and phone number match the company’s official details. This tends to be a problem with large international chains that fraudsters count on. Also check the place of delivery and the person acting for the company. Fraudsters usually act on behalf of the CEO or an executive of the company so you can verify his or her name. Think about whether the management of a company with hundreds of employees would directly handle orders with small companies when they have a professional purchasing department to do so.”
More sophisticated scams
The second model example concerns a situation where you are approached by a sales representative with a similar email address to the name of an existing company. This case is similar to the first, but is more sophisticated, as the sales representative’s name is listed on multiple websites and the email address appears trustworthy.
Also here you have a concrete example from practice. A company that supplies crystal glassware was approached by a foreign company selling homeware. The scenario with deferred payment and delivery location to a rented logistics warehouse was repeated. The name of the sales representative could be found on the internet.
And what does Eximbanka recommend in such cases? “Check the correctness of the subscriber’s e-mail address and when it was created, or who owns the domain. The name of the foreign company consisted of several words, but the fraudster used only part of the name. He also created a fake email account that appeared to be genuine. He posted himself on various discussion forums and websites, where he also listed a contact name. These sites had no room for data verification and listed these fake contacts as if they were genuine.”
The guide also recommends looking at the email account, when it was created and by whom, and who owns the domain. In the case mentioned above, the domain was created six months ago and owned by a citizen from Bulgaria. It is also advisable to purchase business information from a reputable agency to verify the contact details.
Pitfalls also for exporters
According to Martin Schaner, director of Eximbanka’s tradable risk insurance department, exporters should also be cautious, as they can also become a target of fraudsters. “There are different types of fraud that we have encountered over the years. Even in countries that are not exotic. Slovak entrepreneurs also supply goods to countries with developed economies, such as France. And someone from that country starts posing as a person representing a creditworthy company. Professionally, we call it corporate identity theft,” says Schaner.
The goods are thus delivered not to the person to whom the credit limit was issued, but to the fraudster. Therefore, Eximbank’s expert recommends to check the e-mail address, telephone number of the company, the place of delivery and the persons acting for the company, or to make the first delivery only after the payment has been made in advance.
The series I Want to be an Exporter is prepared by HN in cooperation with Eximbank.
Most often, the fraudster impersonates a buyer from abroad.
Author Pavel Novotný