New tricks – supplier beware

30 January 2019

Over the recent months we have experienced a spike in businesses falling victim to a rather simple but very effective form of reversed identity theft.

The fraudsters assume the identity of a genuine business, often a big brand such as a supermarket or high street chain. Using the well-known name they place orders for high value and easily re-sellable goods with manufactures and suppliers. This will usually involve email spoofing. In standard email communication it is easily possible to give the recipient the impression that a message was sent from a particular email account whilst in reality it originates from a completely different address which will not be visible in the email envelope without further investigation. In order to create a sense of authenticity these emails may include genuine looking order documentation on letterhead containing official stamps and even the names and forged signatures of individuals who genuinely work for the apparent buyer.

The fraudsters are taking advantage of the fact that their victims will rely on the good reputation of the apparent buyer and will be prepared to ship the goods based on credit.  Victims who do not have previous dealings with the apparent customer will not notice that the delivery address has no connection with the apparent buyer. This address will later turn out to be a residential property or a warehouse rented for a short period again using a false identity.

The victims will only realise the scam when they contact the apparent buyer and chase payment and when the goods and the fraudsters have disappeared.

In order to minimise their risk businesses need to raise the awareness amongst staff of the traps of e-commerce and of the simple steps that can be taken to prevent identity fraud. A phone call to the potential customer will often be enough to expose criminal activity.

Alexander Wildschütz Author
Alexander Wildschütz
Partner
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