Learn how to detect and prevent fraud!

The most common Internet scams

 

Bank Transfer (Scam Mail)

Such scam mail originated in Nigeria but now emanates from other countries. Often, victims of this scam receive an introduction letter via email. In such a letter they are usually told a story about a wealthy person (for example a rich businessman or government official) who has died. The letter asks the receiver to provide a bank account where the deceased's money can be deposited safely, and promises to give 20%-30% of the total money as compensation. To see an example of this scam mail, please "Identifying Scam Emails" below.


Pro forma Invoice (to get your personal information)

Some fraudsters may ask for a pro forma invoice when they do business with you, and then after you provide this, they may attempt to withdraw your funds, and purchase samples using your good name and business reputation. Your stolen identity may even be used to help con the fraudster's next victim.


Credit card

Be very careful if a business partner you meet through the internet informs you that they can only send you payment by check or credit card. If you accept these payment methods you are running a risk that the checks have been forged, or the credit card numbers stolen, and ultimately you may have to bear the loss.


Identifying Scam Emails

The following are three common internet scams:

-  Bank Transfer (Scam Mail)

Usually, such scam mail originates in Africa. Now comes from other countries as well. Often, victims of this scam receive an introduction letter via email. In such a letter, they are usually told a story about a wealthy person (for example a rich businessman or government official) who has died. The letter then asks the receiver to provide a bank account where the deceased's money can be "safely" deposited with a promise to pay 20% to 30% of the deposit as compensation. To see an example of this type of scam mail, please click here.


-  Standard-Looking Invoice (aiming to get your personal information)

Some criminals may ask for a standard-looking invoice, which often includes a bank account number, when they make contact with you. After you provide this, they may attempt to withdraw your funds or purchase samples at the expense of your good name and the reputation of your business. Do not provide sensitive information, such as a bank account number or corporate registration, without taking prudent steps to determine the credibility of the party or parties with whom you are dealing.


-  Credit Card

Be very careful if a prospective business partner you meet through the Internet informs you that they can only send you payment by check or credit card. If you accept such payment methods there is a risk that the checks have been forged or that the credit card numbers have been stolen. Wire transfers and letters of credit issued from a bank or licensed financial institutions are free of such risks in securing payment.


Below is a type of import fraud too often played out on unsuspecting exporters:

-  The fraudster contacts the exporter and requests a catalogue and quotation, which is a common practice in importing.

-  Several weeks later, one or two persons visit the exporter and introduce themselves as partners in a sundry (general merchandise) import business. One partner claims that he had a high professional status in order to boost the company's image and to win the trust of the exporter.

-  They scrutinize the products, bargain hard, and place a trial order for a couple of thousand U.S. dollars. They would pay by L/C for the first order.

-  About two months after receipt of their first order, one partner makes a surprise visit to the exporter and claims that their sales were extremely good and that their customers need additional stock immediately. The buyer scoops up the finished goods that the exporter had in inventory, including items not ordered before. The buyer claims that the schedule to meet their customers' demands for more stock is tight and that the shipment has to be effected within the next few days, a time frame insufficient to open an L/C.

-  The buyer requests to pay by personal check. It therefore became necessary to use a straight bill of lading which enables the buyer to obtain goods from the carrier by simply showing proof of identity. The check takes 3-4 weeks to clear and the shipment two weeks. Therefore, the buyer receives the goods before the check was cleared.

-  Due to the brisk exports the company has low inventory of finished goods. The buyer places an order close to two thousand U.S. dollars, which would have been much larger. When a personal check is presented for payment, it is a surprise to see that the drawer's bank is in the Pacific Rim. Suspicion arises when the buyer requests to exchange his other personal check for cash, for personal expenses, in the equivalent amount of one thousand U.S. dollars. The buyer's request is extraordinary, so the president of the company is consulted.

The buyer leaves the office disappointed at having his request declined. The concern and suspicion are raised to the president. In order to dispose of some slow moving items that the buyer ordered and since the order was less than one tenth of the average order the company usually received, the president accepts the order but did not approve the exchange of the second check for cash.

-  A meeting is finally arranged two days later to convey the decision and to relay the sales confirmation.

-  The buyer's personal check is presented to a local bank for negotiation and the shipment is made five days later. After nearly four weeks, the local bank notifies the company that the buyer's account has been closed. Several messages that the company transmitted to the buyer are not replied to. Several overseas calls are made and to each call a person would claim that the owners were out. Calls are never returned.

-  Air fare to the buyer's place, plus the hotel accommodation and other expenses, would have been more than two thousand U.S. dollars. To file a lawsuit would have cost even more. It could have been unsafe to visit the buyer. The company decides to write off the debt. To avoid embarrassment and publicity as a result of being swindled, the company decides to keep the case private.

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