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Policy & Compliance


Beware of trade references from bogus email addresses


Short firm fraudsters have developed a new tactic which involves setting up plausible but fake email accounts which they use to provide false references


BIFA is grateful to James Campbell of the European Freight Trades Association (EFTA) who provided this article.


As is well known, the primary weapon of choice of the short firm fraudster is the submission of bogus accounts to Companies House (CH), which documentation credit reference agencies (CRAs) are unable to spot as being fraudulent and too-good-to-be-true, resulting in glowing recommendations about extending credit. An EFTA member 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). The document contained a new tactic – two trade reference names and addresses from respectable, real companies giving two email addresses that at a glance looked as if they were genuine, but were in fact bogus.


Fake email accounts 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


similar appearance email addresses is just oh- so-easy – whilst reading this article think of your own company email address and then perhaps go to the internet to see whether one is available ending in something slightly different, possibly along the lines of .org or .net. This is what the fraudsters are doing. In olden days trade references, which fell out of fashion but now seem to be making a bit of a


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comeback, were taken up either by post, fax or telephone call. However, in this era of doing everything at high speed, 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 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) and this includes double-checking email addresses now that genuine company identities are in effect being hijacked.


Fraudster innovation The fraudsters are constantly upping their game, as demonstrated by the introduction of the bogus email address ploy; 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.


EFTA is the leading credit forum for UK and Eire based freight, shipping and logistics companies. Its members continuously receive unique and vital up-to-date information that is missing from all other credit reporting options. It is a unique service for less than £1 per day (with BIFA Members getting a 25% discount on the first year).


December 2019


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