Credit Management December 2019

OPINION
ROGUE TRADERS
Bogus trade reference email addresses – a second
string to the bow of the short-firm fraudster.
AUTHOR – James Campbell
AS I’ve previously mentioned
in articles in
Credit Management, the
primary weapon of choice
of the short-firm fraudster
is the submission of
bogus accounts to Companies House (CH)
which credit reference agencies (CRAs)
are unable to spot as being fraudulent and
too-good-to-be-true, resulting in recommendations
about extending credit.
A Member of the European Freight
Trades Association (EFTA) recently received
an Application for Credit from a company
set up to commit short-firm fraud (a totally
implausible set of accounts had been filed
at CH). Documents contained a new tactic
– two trade reference names and addresses
from respectable, real companies giving
two email addresses which at a glance
looked as if they were genuine but were in
fact bogus.
Whereas the genuine email addresses
of the two trade reference companies
were, for example, ‘sales@companyname.
co.uk’ and ‘accounts@companyname.com’,
the two bogus email addresses were
given as ‘sales@companyname.org’ and
‘accounts@companyname.net’. This is not
something that is easy to spot.
Like filing bogus accounts, the setting
up of email addresses that appear similar
to their genuine counterparts is easy and
while reading this article think of your own
company email address and then perhaps
go to the internet to see if one is available
ending in something slightly different,
possibly along the lines of .org or .net. This
is what the fraudsters are doing.
BACK IN FASHION
In olden days trade references, which fell
out of fashion but now seem to be making
a bit of a comeback, were taken up either
by post, fax or telephone calls. In this
era of doing everything at high speed,
however, they are increasingly being
processed by email and it would appear
that the fraudsters have spotted this and
identified it as a weakness to be exploited.
If the method of taking up the trade
reference by email is used and enquiries
are sent to the bogus trade reference
email addresses, then glowing replies are
undoubtedly going to be received and this,
coupled together with the glowing CRA
report based on the bogus accounts, might
cause you to further lower your guard and
extend credit to the fraudsters resulting in
a financial loss.
At EFTA we recommend to our Members
that not only do they look very carefully
at every aspect of the company that is
applying for credit, but that they also have
a good look at the companies that have
been given as trade references (fraudsters
have in the past been known to set up
bogus companies for such purposes). This
includes double checking email addresses
now that genuine companies’ identities are
in effect being hijacked.
The fraudsters are constantly upping
their game, as demonstrated by the
introduction of the bogus email address
ploy, and companies extending credit have
to be vigilant at all times. Trade references
are a good thing – they are free and these
days more honest opinions tend to be given
– but make sure they are coming from
a genuine source and not the fraudsters
themselves.
James Campbell is Secretary of The
European Freight Trades Association.
The Recognised Standard / www.cicm.com / December 2019 / PAGE 15