Like death and taxes, you can count on scammers. They are present in every industry. Where there is opportunity, there will be always be opportunists, ready to take advantage of lax security and the increasing anonymity provided by digital commerce.
There are a few common scams in the promotional product industry. One of the most frequent scams involves fraudulent orders that are placed with a stolen credit card. The payment will appear to be valid and the distributor fulfills the order, but when the actual credit card holder notices the charge and initiates a charge-back, the distributor loses the payment.
Another type of scam involves identify theft of the distributor or supplier. PPAI published an article illustrating just this type of scam in an interview with distributor Lisa Parke. In some states, scammers may easily access and change company information, such as a mailing address, and use it for their own ends. In Lisa’s case, she ended up having to fight over $4000 in phone line charges due to the scam.
How to Identify Scams
While it may be difficult to identify scammers after the deed, let alone prosecute them, there are some consistent giveaways that can tip you off to a potential scam before you become a victim.
Use these tips from Brian Pritchard, Director of IT at SAGE, as best practices for every order. If you see multiple characteristics in an order, it becomes even more important to investigate further.
- Look for poor spelling or grammar. “Usually something will just ‘look strange’ about the email,” says Brian. “Poor English or grammar is a dead giveaway.”
- Notice whether they ask for personal details in an email. “Your bank will never ask for security information or account information in an email.”
- Don’t open attachments or click links if it’s from someone you don’t know or if you are not expecting it. Brian cautions, “Even if the email looks like it might be legitimate, contact the business or institution directly from their site. Scammers usually pose as large companies, banks, airlines, shipping companies, and large retailers. They may also pose as a customer saying a payment or invoice is attached. Contact the client separately to verify what they are sending.”
- Be wary of orders from new customers submitted through your website. “Popular scams often start with asking for a quote on a large quantity of items. It could be anything, but USB drives and blank shirts are particularly popular.”
- Do not reply to spam. Educate your staff on this practice. “In general, the weakest link in security is the human operator, so vigilance is key.”
- Practice good security measures. Brian says, “Use a strong password and do not reuse your email password on other services. Enable encryption in your email settings (any email SAGE host requires this). Use antivirus and keep it updated, and set Windows to automatically update or install all security updates. Use a reputable company to host your email and e-commerce site like SAGE, who is PCI compliant.”
PPAI provides a lengthy list of tips as well in their article “Are You the Next Victim?” Here are some of the unique red flags they identify.
- When shipping offshore, be wary of a shipping address that is an individual’s home.
Research the address on Google Maps, which often provides snapshots of what a building looks like. Sometimes this step can help filter out fraudulent orders.
- Make sure the address and phone number on the order match the information on the company’s website.
- Scammers almost always pay by credit card. When you establish open credit for an unfamiliar company look it up in Dun & Bradstreet.
- Google the name of the company and call it to make sure it’s genuine.
- Be wary if you get an order from an unknown customer for promotional products that are normally decorated. Products with a high retail value such as undecorated t-shirts, USBs and other electronics are the products most often ordered in scams.
- If the email address is a “generic” domain (hotmail.com; google.com; msn.com), check out the order thoroughly.
- Use caution if the requester offers to pay immediately by credit card or requests immediate shipment. This is often a red flag of a scam.
- Know the person or company to whom you are selling. If you don’t know them, find someone you know who does.
Finally, SAGE payment processing partner Merchant Focus shares some helpful recommendations to better identify suspicious cards and prevent fraudulent orders.
- Check that the “ship to” and “bill to” addresses are the same.
- If the name on a card is different from the person placing the order, ask to speak to the person on the card to verbally confirm the order.
- Ask for a signature upon delivery of products.
- Ask for a front and back copy of the client’s driver’s license and credit card.
- Use a credit card authorization form requiring a signature.
- Require Address Verification System (AVS) and Card Verification Value (CVV) matches.
What to Do if You’re a Victim
If you do fall victim to a scammer, there are several steps you should take.
After notifying your bank, credit card company, credit reporting agencies, and any other necessary service providers, report the scam to the FTC at www.ftccomplaintassistant.gov and report identity theft at www.consumer.ftc.gov/identity-theft.
Next, alert PPAI, the promotional products industry association. Sharing your experience will help reduce scams for all members.
Finally, take steps to educate yourself and your staff. Click here to download a tips sheet that you can easily forward to your staff or post in the office to keep red flags top of mind for everyone.
Scammers are a threat that will never go away, but with vigilance and knowledge of some simple checks, you can pull a fast one of your own – and leave the scammers out to dry.