From the point of view of the Criminal Code, a scam represents the theft of property by fraud or breach of trust. Business scam is nowadays awaiting entrepreneurs around every corner, especially in the offshore world.
What tricks do scammers use to take advantage of the credulity, carelessness or negligence of foreign entrepreneurs?
Counterparty re-registration
The counterparty debtor might ask to transfer his old debts to a new company because of the change of legal entity. This may be a signal that they do not want to repay you the debt. Therefore, it is necessary to check what the counterparty has changed: whether there has been a change of director, address, founders, etc.
Email interception
If the company does not have its own mail server and uses free services, they can be hacked and intercepted. Attackers intercept genuine supplier letters and replace them with fake ones, taking the client’s money for themselves. We advise entrepreneurs to have their mail server, track the flow of money and check counterparties.
Affiliate Fraud
Often, a business is divided into an asset-holding company and an intermediary operating company that communicates with counterparties. Such a scheme often leads to default by the intermediary. Our advice is to enter into transactions with the main company, the owner of the assets, and require information from the beneficiaries or from the main company itself.
Fabrication of documents
The buyer company asks for a large party of goods with a delay in payment, but is ready to pay an advance of 25%. After checking it, the security service allows the transaction. The contract is signed, and the advance payment comes to the supplier’s account not from the buyer, but from a person. After shipment of goods, the buyer disappears. It turns out that all the documents and customer signatures were falsified.
Unfair mediation
Often, entrepreneurs seek intermediaries to simplify administrative or commercial issues. They find people who could help them. The payment is usually made in cash or through shell companies. After the advance payment, the intermediary disappears. Our advice is to not rely on intermediaries and act only by legal methods.
Counterfeit payment for goods
A wholesaler receives an urgent prepayment delivery order from a potential customer. After a couple of hours, he receives the payment. The supplier ships the products, and then discovers that no money has been actually sent by the client.
Typically, such payments come on Friday night, when banks are already closed. The ”customer ”actively convinces the seller to urgently ship the goods. After a couple of days, finding him is already impossible.
Cargo fraud
Often, goods transported by road are stolen - because of the high cost of goods and the simplicity of theft methods. A few hours after the order, the cargo may be stolen by scammers, while the buyer is calmly waiting for it.
The forwarder is responsible for the loss of cargo, but he may not have enough money to recover the damages. Therefore, it is necessary to sign surety agreements with the beneficiaries of forwarding companies, insure transportation and work only with trusted and large transport companies.
Now that you know all about how to handle scam as a foreign company, we hope you’ll never have to face any of these types of scam!
