A supplier Scam is a sort of fraud in which a perpetrator sometimes pose as suppliers/bulk sellers of products and contact MSMEs with offers, only to vanish without a trace after receiving significant advance payments.
Why do scammers perform Supplier Scams?
Money, Disrupt business activities.
Scammers perform such activities to get a large sum of money and then disappear.
Who are the targets?
MSMEs, newly found enterprises, Businesses with lower security measures, and often well-established enterprises.
Scammers usually target newly found businesses and businesses that don’t manage proper security measures. Also, they contact businesses as supplier agencies to check if they can lure the business into their trap.
The purchase order often resembles that of established brands like Alibaba, Daraz, etc. Victims find these offers very lucrative and fall for the trap and once the purchase request is made, the products are delivered to the address of the scammer instead of the victim. By that time the advanced payment is already been made. Once the victim knew that he/she is scammed, there’s nothing that much left to do.
How to stay safe from Supplier Scam
When scammers try to trap any business with this scam, their requests seem very urgent. If a request appears to be excessively urgent, pause and reconsider.
Don’t let yourself be a victim. You can avoid supplier scams by following these guidelines:
- Only allow authorized department buyers to place orders.
- check the reliability of the payment gateway
- Only use well-known companies — or request references.
- Thoroughly check email addresses. Is the e-mail domain appropriate? Companies often have their own domain e.g. suppose a plastic supplier company website is plasticworld.com and their email domain is @plasticworld. Scammers might use a lookalike domain name such as @plastikworld.com or @plasticwarld.com or @plasticworld-com.io . That’s why it is very important to check the domain name if it is real or fake.
- Never react to unsolicited e-mails from unknown suppliers.
- Never send an e-mail order to a source you don’t know.
- Do not offer any information about your business operations to unknown vendors over the phone or by e-mail.
- Return or refuse things received as a result of an apparent scam.
- Do not allow payment for transactions you suspect is fraudulent.
- Follow your intuition and use your best judgment. If something about your business deal does not feel right, it is most likely wrong.
- Perform an independent review of the request. If the request is legitimate, the supplier should not worry if you contact them back from a different phone number.
How can you recover from a supplier scam?
Damages done by supplier scams are not always easy to recover. That’s why it is always better to prevent it before it happens. Yet, there are some actions you may take in order to recover as much as possible. Which may also decrease the risks of future attacks from scammers.
Here are some options to follow-
- Don’t pay any more money once you knew that you are being scammed
- Gather all relevant data and documents. Any information i.e. name, email address, profile name, phone number, address, title, position, etc.
- Protect your identity and accounts i.e. Credit cards. If you used your credit card information in a fraudulent transaction, inform your card companies straight away to report the fraud. You may be needed to obtain a new account number as part of the recovery procedure.
- Report the fraud to authorities immediately
- Consider modifying your habits and increasing your resistance to fraud.
