Cyber crime

Know Who You’re Paying with a Credit Check

Niek Dekker
3 Min

Purchasing goods online can be fraught with danger. It is often difficult to know precisely who you are transacting with. In this blog we will examine the importance of undertaking a Credit Check so you can have confidence that you’re sending funds to a legitimate entity.

Fake Websites

Australian farmers are a resilient lot. But if fighting droughts and bushfires weren’t enough, now they also need to battle a new threat: online scammers.

According to Scamwatch, a new type of scam is targeting farmers looking for a good deal on tractors and farm machinery. The scammers advertise equipment at prices well below market value. Given the pandemic restrictions on movements, farmers are told that they can’t physically inspect the equipment prior to purchase.

In order to secure these special deals, farmers are being conned into making advance EFT payments for the equipment, sight unseen. However, the reality is that the equipment does not exist. Collectively, farmers were conned out of $1.1 million in 2020 as a result of these scams. In the first five months of 2021, farmers had already been conned out of $335,000.

Through the use of fake websites, scammers are able to trick unsuspecting farmers. These website closely mirror legitimate websites, including listing ABNs, phone numbers and online enquiry forms.

When a farmer makes an inquiry, they are subsequently contacted by a representative of the fake company, who advises them to transfer funds on the promise that the machinery will be delivered.

Unsurprisingly, once the payment is transferred, all contact with the fake company ceases.

Global Crime Syndicates

Identifying scam websites can be exceedingly difficult given the sophisticated tactics used by criminals. You may think you are purchasing goods from an Australian company, but the people behind the website could be located on the other side of the world.

In a recent case, Europol arrested 23 individuals for engaging in advance-payment fraud. The criminal syndicate had created a series of fake websites to sell COVID-19 protective equipment to companies in 20 different countries around the world. Companies were defrauded to the tune of 1 million Euros.

The syndicate created fake email addresses and webpages similar to the ones belonging to legitimate wholesale companies. Impersonating these companies, these criminals would then trick the victims into placing orders with them, requesting the payments in advance in order for the goods to be sent.

Conducting a Credit Check is Critical

Unfortunately, these types of scams are becoming increasingly common. They thrive in the current environment where, due to the pandemic, people are resorting to online purchases in record numbers.

Protections exist for individual consumers who use credit cards. For example, if an individual consumer is subjected to an e-commerce scam, they have six months to file a chargeback with their bank. However, such protections don’t exist when paying via EFT transfer, leaving businesses particularly exposed.

That’s why it is critical to undertake background checks on a vendor prior to sending them payment for goods that you’ve only seen on the internet.

There are a range of checks you can do, including verifying their ABN and their GST status. Even a simple Google search may uncover information that flags a vendor as suspicious. However, one check that is often overlooked is a Credit Check.

Obtaining a company Credit Check on any online vendor, particularly if you are pre-paying for goods or services in advance, is an essential step in a robust Procure-to-Pay cycle.

By obtaining a company Credit Check, you can assess a potential vendor’s credit rating in real-time. This will help you ensure that you have a proper understanding of whether they are legitimate and whether there are likely to be any risks transacting with them.

How can eftsure help?

eftsure works with leading Australian credit reporting agency CreditorCheck to enable your Accounts Payable team to run a real-time Credit Check on a vendor immediately prior to issuing an EFT payment.

This will allow you to flag any potential risks associated with the vendor, giving you the opportunity to pause the payment and investigate further.

At a time when Australian organisations are forced to make online purchases due to the pandemic, knowing precisely who you are transacting with is essential to avoid fraudulent vendors using fake websites.

Contact us today for a demonstration of how eftsure can help your organisation stay secure from advance-payment fraud.


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