How to Spot the Signs of Fraud
We all know running a business is tough. As a business owner, one of the challenges is being able to siphon good customers from fraudulent ones. The problem is that its not always easy to tell the difference. Shoplet keeps close relationships with our vendors and we share in their accomplishments and struggles. Recently, our friends at Kleer-Fax paid us a visit and shared with us their personal story on how to spot the signs of fraud. A big thanks to Kleer-fax for this week’s business post! And now… how you can spot the signs of fraud.
We recently received an inquiry via email for a very large order: 4,500 Jazz Bands at full retail.
At first glance, we were thinking “WOO-HOO! Let’s fire up the machines and get these babies rolling!” However, something was amiss. The order was from Australia and it was for a veteran auto service company, which manufactures industrial car parts. The warning signs were already apparent. Why would an auto parts company need so many Jazz Bands?
When a company encounters an order of this magnitude, it’s easy to get excited and go full speed ahead without question. Failing to look into questionable orders can lead to the loss of thousands of dollars and the possibility of having to lay someone off to make up the difference.
We decided to take some precautions and do a little bit of research. We looked up the company website, then inquired to see if the sender, who went by the name Mark Nelson, was correct in wanting so many Jazz Bands. The reply we received was that they get such questions weekly from various vendors, and that Mark Nelson is a fraudster. This person also works under the name Jackson Payton. By taking the time to make a simple inquiry, we saved our company from losing nearly $63,000 worth of Jazz Bands.”
What are the Signs That a Fraud may be Occurring?
It is very easy to be swindled, especially by a professional con artist. One reason we were skeptical was because an order this large from an auto parts company was definitely out of the ordinary. To say the least, it was too good to be true.
The BBB has 10 signs of a scam that it notes for consumers. In our case, there were some points that stood out:
Grammar and Spelling Issues- Coming from a well known Australian company, the email was written in very poor English with lots of grammatical errors. Look out for e-mails where spelling is an issue. This is a pretty good indicator that the inquiry might be fraud.
E-mail Domain red flags- While some small and start up companies do use Gmail, this particular auto parts company has been around nearly 10 years and have a professionally done website. Most legitimate businesses have e-mail domains with their company name. In our case, the sender used a gmail address, which was a red flag for a company of this size.
Order Volume- In our case, the order volume was much too large to make sense for a company that deals with auto parts, regardless of size. When you put all of these factors together, something is definitely fishy. Make sure that your product makes sense for the buyer. If your company sells fine jewelry, you should be suspicious of a buyer who orders on behalf of a chain of dollar stores.
How Kleer-Fax Concluded Things With Mark Nelson
After speaking directly with the auto parts company, Kleer-Fax filed a complaint through the IC3 (Internet Crimes Complaint Center) noting everything we could.
If you find that you have been a victim of fraud, or that a crime is taking place, you can file the same complaint as we did by going directly to the IC3 Government website. Business is tough but by taking a few precautions, you can better spot the signs of fraud.