How to beat supply fraudsters

12 October 2012

Want the latest procurement and supply chain news delivered straight to your inbox? Sign up for the Supply Management Daily

12 October 2012 | Adam Leach

E-mails from non-company addresses, an absence of a company website and requests to send payments to addresses in residential areas should raise alarm bells with buyers when dealing with ‘suppliers’.

To mark national identity fraud prevention month, credit reference agency Graydon UK compiled tips for buyers to help them limit the risk of fraud. Included in its advice is a series of tips around irregular addresses or contact methods. The company advised purchasers to pay special attention to the use of mobile phone numbers, non-business email addresses, provide no evidence of a company website or supply a delivery address in a residential area.

To limit the risk of falling prey to commercial fraudsters, which commonly pose as genuine companies but change delivery addresses or payment details, Graydon advises buyers to:

Request utility bills addressed to the delivery address from suppliers

Check the party seeking payment is registered for VAT; and,

Never pay a supplier without first obtaining a purchase order.

Alex Schwendtner, managing director of Graydon UK, said in a statement: “Commercial fraud occurs often when orders for goods on credit are not properly vetted by suppliers. However, fraud can only be perpetrated when existing credit control procedures at the supplier’s end are insufficient. The good news for business, no matter the size, is that procedures can be put in place to tackle this problem and tips can taken on board to protect your company’s best interests and profitability.”

A July report by BDO found while the overall value of procurement fraud in the UK had dropped dramatically, the number of individual cases had increased. The report found the value had dived from £25.3 million last year to just £3 million.

Calderbridge, Seascale
£52,518 - £64,233
London (Central), London (Greater)
£60k-£70k p.a. + Bonus (0-10%) + Pension (5%)
GPA Procurement
CIPS Knowledge
Find out more with CIPS Knowledge:
  • best practice insights
  • guidance
  • tools and templates