SCAMPEDIA: “European” Distribution FraudFraud In law, fraud is intentional deception to secure unfair or unlawful gain (money or other assets), or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation) or criminal law (e.g., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities), or it may cause no loss of money, property, or legal right but still be an element of another civil or criminal wrong. The purpose of fraud may be monetary gain or other benefits, for example by obtaining a passport, travel document, or driver's license, or mortgage fraud, where the perpetrator may attempt to qualify for a mortgage by way of false statements. A fraud can also be a hoax, which is a distinct concept that involves deliberate deception without the intention of gain or of materially damaging or depriving a victim.
What is: “European” Distribution Fraud?
When a company from overseas (usually from Europe) delivers products to the UK or other destination but isn’t paid for the goods or the cost of shipping – it is done by payment terms (such as C.O.D. – Cash On Delivery or NET 30 Days).
Fraudsters pretend to be from a well-known company or business name to make their order look authentic.
Spot The ScamScam A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost.
- Your business gets an email for a large order to be sent to a new address. The buyer says you’ll be paid on delivery.
- Your business is pressured into making the delivery quickly.
- Their documents and emails have poor spelling and grammar. If English isn’t your first language, find someone who can check for you.
Fraudsters make an order to a company outside the UK by email. They claim to be from a well-known retailer, supermarket or manufacturer based in the UK. They may use an email address that looks very similar to a genuine company and steals their logo.
Orders are usually for a large number of expensive products such as food, alcohol or electrical products. They avoid paying for the goods themselves by using fake bank transfer confirmation forms, or by giving the company’s genuine address for the invoice.
They ask for the delivery lorry to send the products to an address that doesn’t belong to the company. In some cases, a genuine company delivery address is given on the order, but the driver is contacted while they’re traveling and asked to change the delivery address.
The delivery is picked up by the criminals without payment, and any invoices your business sends to the company’s genuine address can’t be paid.
How It Works
This type of fraud, known as “European distribution fraud”, happens when a company from overseas (usually from Europe) delivers products to the UK (or another destination such as Ireland, France, etc.), but isn’t paid for the goods or the cost of shipping.
Fraudsters are registering domains that are similar to genuine university domains such as xxxxacu-uk.org, xxxxuk-ac.org, and xxxacu.co.uk. These domains are used to contact suppliers and order high-value goods such as IT equipment and pharmaceutical chemicals in the university’s name.
Suppliers will receive an email claiming to be from a university, requesting a quotation for goods on extended payment terms. Once the quotation has been provided, a purchase order is emailed to the supplier that is similar to a real university purchase order. The purchase order typically instructs delivery to an address, which may or may not be affiliated with the university. The items are then received by the criminals before being moved on, however, no payment is received by the supplier.
U.K. ActionFraudActionFraud Action Fraud is the UK’s national reporting centre for fraud and cybercrime where you should report fraud if you have been scammed, defrauded or experienced cyber crime in England, Wales and Northern Ireland. WEBSITE LINK says: “This type of fraud can have a serious impact on businesses. This is why it’s so important to spot the signs and carry out all the necessary checks, such as verifying the order and checking any documents for poor spelling and grammar.”
“We know that there is a lack of reporting by affected companies and without this vital intelligence, a true picture of EDF cannot be reflected.”
Protect your business against European distribution fraud
- Check that the delivery address, phone number, and email domain name is genuine. If someone has placed an order with your business for the first time always verify them. Find the company’s website using a search engine and phone them to confirm details.
- Do some extra research on the Internet. Are there any news reports of criminals imitating this before? Can you see their address on Google Street View?
- Ask for upfront payment for first-time orders. If you have an online checkout, get them to use it.
- Ensure that you verify and corroborate all order requests from new customers. Use telephone numbers or email addresses found on the retailer’s website – do not use the details given on the suspicious email for verification purposes.
- If the order request is from a new contact at an organization that’s an existing customer, verify the request through an established contact to make sure it is legitimate.
- Check any documents for poor spelling and grammar – this is often a sign that fraudsters are at work.
FAQ: How Do You Properly Report Scammers?
It is essential that law enforcement knows about scamsScams A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. & scammers, even though there is nothing (in most cases) that they can do.
Always report scams involving money lost or where you received money to:
- Local PoliceLocal Police The Local Police is your first responder in most countries. In most English-speaking countries and in Europe report to them first. In other countries look for your national cybercrime police units to report scams to. In the U.S., Canada, & Australia, you must report to the local police first. – ask them to take an “informational” police report – say you need it for your insurance
- Your National Police or FBIFBI FBI - Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice, the FBI is also a member of the U.S. Intelligence Community and reports to both the Attorney General and the Director of National Intelligence. A leading U.S. counter-terrorism, counterintelligence, and criminal investigative organization, the FBI has jurisdiction over violations of more than 200 categories of federal crimes, including financial fraud. (www.IC3.gov)
- The ScarsSCARS SCARS - Society of Citizens Against Relationship Scams Inc. A government registered crime victims' assistance & crime prevention nonprofit organization based in Miami, Florida, U.S.A. SCARS supports the victims of scams worldwide and through its partners in more than 60 countries around the world. Incorporated in 2015, its team has 30 years of continuous experience educating and supporting scam victims. Visit www.AgainstScams.org to learn more about SCARS. Worldwide Reporting Network HERE or on www.Anyscam.com
This helps your government understand the problem, and allows law enforcement to add scammers on watch lists worldwide.
Visit our Main SCARS™ News & Information Facebook page for much more information about scams and online crime: www.facebook.com/SCARS.Victims.Support.And.Recovery
To learn more about SCARS visit www.AgainstScams.org
Please be sure to report all scammers HERE or on www.Anyscam.com
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