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Identity of carrier fraud Such fraud necessitates an additional layer of sophistication from the fraudsters – producing falsified documents and policies, creating fake websites, responding to queries and having expansive knowledge of the industry to be able to convince industry professionals to believe them. Given the value of the goods or payments the fraudsters can extract from the customers or shippers, it is a lucrative business; creating the additional layer of opacity pays off. Such fraud can start innocently – with a shipper searching


for a carrier or freight forwarder on the internet, usually looking for the cheapest or the best value for money option. The shipper finds a lucrative ad and contacts the supposed carrier for a quote and further information – which the fraudster happily provides. Negotiations go well and the carrier takes possession of the


goods to ship to the required destination. Problems will start appearing on the way – the shipper might be required to pay additional VAT, port fees or licences without being provided with any legitimate documents to support the additional fees from the carrier. Without payment of the additional fees, the goods would not be delivered to the consignee. In reality, the goods may not have been shipped and instead could have been sold to third parties.


Ten tips to avoid fraud These simple, yet effective tips can be easily incorporated into the day-to-day business and can be valuable weapons in the fight against fraud: 1. When searching for a carrier, always use legitimate websites, possibly run by an association, rather than user- created content websites such as Gumtree or Alibaba.


to a different bank account than usual. The new bank account belongs to the fraudster, rather than the carrier. Another example is when the shipper is insisting on payments to be sent to a personal or third-party account rather than the legitimate company account due to, for example, high banking rates incurred by the shipper’s bank. These emails can be so well disguised to look like they are


from a long-standing business partner, that they will not raise any level of suspicion – when the opposite should be true. Such fraud can easily be prevented by calling the company, or accounts department, on the number stated on the website or other independently provided documents and confirming the bank details and reasons for the change of instructions.


CEO fraud A sub-category of payment fraud is CEO fraud – targeted at the staff in accounts departments – which involves pressuring them to transfer money to another bank account or pay certain invoices with urgency. Such emails would appear as if they have come from senior


managers of the business, when, in reality, they have come from fraudsters spoofing and impersonating these managers. This can also be prevented by calling the person requesting the transfer to confirm the request (by dialling the phone number from an employee directory) and/or checking the instructions with superiors.


July 2021


2. Check for grammatical errors, differences in the company name throughout the website and other communications, legitimacy of the place of the business address and the email address.


3. Check the reviews of the shipper and its website for more information that can be reviewed and confirmed.


4. Complete due diligence on the business partners – do you know who you are dealing with?


5. When receiving documents, make sure these are full copies of the documents including full terms and conditions; check for grammatical and factual errors.


Fraudsters are more refined than ever and many scams are instigated by organised crime groups


6. Only allow verified persons into the warehouse. If they are not scheduled to pick goods up, do not let them enter unless verified with higher management levels.


7. Examine invoices and query all unexpected charges (such as VAT or port fees not planned for) and demand to see the original documents supporting the charge.


8. Before transferring any payment, double-check the bank account details, that the account belongs to the company, and call the company to confirm these details.


9. Check your bank statements carefully and report any suspicious activity to your bank.


10. Be sceptical – if you are unsure of anything – query it and escalate it to your superiors


*BIFA is grateful to Aneta Zaitlikova of BIFA Associate Member LA Marine Lawyers for providing this article.


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