Fraudsters are always looking for creative ways to get money from individuals, and business owners can often be a target. Better Business Bureau is warning the business community to watch for scams involving fake purchase orders.
Here’s how it works: The con artist creates a fake business — or impersonates a legitimate business — and then contacts a company to purchase a large number of products. These scammers have done their homework and will often present the company with references, bank account numbers and even a deceiving online presence.
After a quick look, they seem legitimate, so when they order merchandise, businesses fulfill the orders – only to find out later that they fell for a scam and will not be paid. Either the check bounces or the account was never real in the first place. In the meantime, their products have already been sent and they have no way of getting them back.
To avoid phony purchase orders, BBB advises business owners and purchasing agents to:
• Watch out for unusually large orders. Scammers often target smaller businesses and place large orders, hoping the chance of profit overrides their victims’ judgment. Large orders — particularly from new customers — are often a red flag.
• Be leery of email-only solicitations. Watch out for situations where email is the only form of contact, especially if the sender refuses to connect by phone or in person. Also, be on the lookout for misspellings and grammatical errors in solicitations you receive.
• Confirm everything. If you receive an order from a potential new customer, even a business with an established track record, it is a good idea to verify the order directly with the company. Make sure you are using the accurate contact information and do not just use the phone number on the purchase order you have received.
• Make sure the references are real. In this day and age, creating fake online entities is fairly easy. When you are doing your research, go beyond a simple phone call. Do an internet search on the company seeking to do business with you as well as their references. Legitimate companies should have a digital “footprint.” If you can’t find much on a given company, it could mean they are new, or it could mean they are not what they seem.
• Have a process in place. When it comes to handling orders, make sure you have a reliable system in place to vet and verify those orders, and that all of your staff are fully trained to follow this process.
• Do your research. Visit bbb.org to businesses looking to do business with you. Keep in mind that business identity theft is a growing issue. Fraudsters often impersonate legitimate businesses in the hopes of defrauding unsuspecting businesses.
• Trust your instincts. A business owner who received a fake purchase order recently said the size of the order raised a red flag. So did the fact that they were not asked for a competitive bid. In addition, BBB regularly hears from consumers and business owners who state they “just knew something was wrong,” but failed to heed that instinct. If something seems off to you, pay close attention to that feeling.