On 5/18/2009, a member initiated a Fast Track Fraud alert about someone posing as a legitimate company. We collected the information, inserted it into an Ethics case (#5033), and sent a Broadcast warning to the community.
On 5/21/2009, we received another Fast Track Fraud alert when a Tradeloop member sent out an alert on Tradeloop (case #5034) and on competitors' networks. In this case, the fraudulent company actually replied to the Broadcast. The concerned member contacted us about why this company was able to reply through our Broadcast system.
As it turned out, he couldn't! The fraudulent company had replied through a competitor's network, not Tradeloop's. He had been banned from Tradeloop in 2007 for failing to respond to an Ethics complaint.
How did the complainants uncover fraud?
Unfortunately, the member involved in case #5034 found out only after he had received scrap product instead of the promised working monitors. That experience reinforces the importance of asking questions and even requesting photographs prior to executing a purchase agreement. That may not stop a company that's determined to defraud, but will increase communication and help avoid misunderstandings when the seller is a legitimate company.
The member involved in the identity fraud case #5033 noticed several warning signs and did some detective work. We recommend using this simple, five-step checklist before agreeing to a deal with a new buyer or seller:
- Free, Disposable Email Account: If the company uses a Hotmail, Gmail, or other anonymous free email account, that's a huge warning flag. Make sure the contact email can be tied to the particular company, not to an anonymous email.
- Lack of Contact Information: In this case, the company didn't provide a street address, phone number, or any contact information other than the email address. A legitimate company should readily supply a street address, company contact emails, phone number, fax number, etc.
- Payment Options: When a company wants payment sent by Western Union, it's a virtual neon sign flashing "FRAUD! FRAUD!" There's no way to track Western Union payments, verify the recipient, or get a refund in case of fraud. Many companies request payment by wire transfer, but make sure you're sending it to a verifiable bank account, not a street corner Western Union office.
- Contact Information Doesn't Match Company Web Site: Most companies today have some sort of Web presence. Check the information the seller gives you against the information on the company Web site.
- Check for Tradeloop Membership: Member companies have to pass our rigorous new member screening process, and existing members are subject to routine verification of their account information.
It's quick, easy, and helps keep the community a safe place to do business.