We all are constantly warning about internet scams and as small businesses we seem to get more than most. From false invoices for advertising or other services not purchased to of course the ubiquitous foreign prince trying to get money out of an African country. I suppose we have all seen plenty of examples and right now we seem to be seeing an increase in spam in our emails daily.
However, in tight times there has come a new scam which seemed to be catching a few businesses out. It focusses on motor dealers specifically in their parts department.
The scam starts out as an enquiry for parts costings usually from the website. Once the “fish” is hooked an order is lodged for the parts and payment is made using a stolen credit card. The orders are usually under the floor limit so authorisation is generally not obtained.
Once the first order gets through a second and sometimes a third order is placed using the same card as payment. Of course all of the parts are shipped.
By day 3 – 4 the bank has caught up and rejects the card payments, the payments are not honoured and the parts are gone never to be recovered.
We have seen orders placed for thousands of spark plugs? or general mechanical parts for vehicles, but nothing specific.
As always we need to stay alert and question the validity of internet orders. You need to ask;
- Is this really a new customer?
- Is this a local or is it an enquiry from a nondescript location?
- Do you have a delivery address within Australia? or is it from overseas?
Are the parts being ordered within the perimeters of a normal order, or is it an unusual amount or type?
To guard against these types of scams you should;
- Make sure you get authorisation on all new orders from new customers or internet orders
- Make sure you don’t ship the parts until you have payment confirmed
- Ensure the Parts Manager or senior management authorise the sale before junior staff take action.
Of course if you are the least bit suspicious then respectfully decline to accept the order.
These are not fail safe methods but they will hopefully allow you to protect your business from losses that seem to range from $10,000 and up which are not covered by any insurance policy.
