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Free Fraud Detection Resources

posted on 2014-05-04 by Dean Kaplan

One of the sim­plest ways to detect poten­tial fraud is to con­firm cer­tain infor­ma­tion pro­vided on a credit appli­ca­tion using easy, free resources on the Inter­net. As a com­mer­cial col­lec­tion agency, we reg­u­larly get claims where this has not been done and we dis­cover that the infor­ma­tion pro­vided was either mis­lead­ing or out­right fraud. In either case, it is no sur­prise that the invoices were not col­lected by our clients. In less than five min­utes you can use four free resources on the web to uncover indi­ca­tors of the most com­mon fraud fac­tors.

The first thing to do is look for the company's web­site. Frankly, if a com­pany does not have a web­site in 2012, it is a cau­tion­ary indi­ca­tor, either as poten­tial fraud or as a com­pany that may strug­gle to per­form well in the Inter­net age. Typ­i­cally, sim­ply putting "www." in front of the text after the @ sym­bol in the email address pro­vided by the poten­tial cus­tomer will lead to the company's web­site. If this infor­ma­tion isn't avail­able, we sim­ply search on the Inter­net to find the com­pany web­site. If the email address pro­vided from an email ser­vice, such as Gmail, hot­mail, etc., that too is a cau­tion­ary indi­ca­tor, either of poten­tial fraud or sim­ply a very small business.

The next step is to ver­ify that the con­tact infor­ma­tion on the web­site is the same as pro­vided on the credit appli­ca­tion. This helps to ensure that you have found the cor­rect web­site as well as con­firm­ing that the cus­tomer is pro­vid­ing con­sis­tent con­tact infor­ma­tion. It is very impor­tant to call the phone and fax num­bers to ver­ify they are valid. Be care­ful if:

  • The phone is not answered in a pro­fes­sional manner;
  • The voice mail sys­tem does not iden­tify the company;
  • You can't get a live per­son via the voice­mail system;
  • It is a cell phone voice mail greeting;
  • It is a direct line to an individual.

Make sure you get the company's main phone num­ber, and for smaller busi­nesses get the owner's mobile phone num­ber and direct email address. If the busi­ness phone is a mobile phone, that typ­i­cally is an indi­ca­tor about the size or pos­si­bly the legit­i­macy of the business.

If there is no phone num­ber on the web­site, that is a red flag. Any com­pany that does not pub­lish a phone num­ber means they don't want their cus­tomers call­ing them. It is dif­fi­cult to pro­vide good cus­tomer ser­vice if there can­not be phone com­mu­ni­ca­tion, and if a poten­tial cus­tomer doesn't pro­vide good cus­tomer ser­vice, how long can their com­pany per­form well? The lack of a phone num­ber on a web­site is a com­mon fac­tor on a sig­nif­i­cant por­tion of the fraud­u­lent cases we see.

If the cus­tomer indi­cates they are a cor­po­ra­tion, LLC (lim­ited lia­bil­ity com­pany), or part­ner­ship, con­firm this with the appro­pri­ate Sec­re­tary of State. Forty-seven of the 50 states have free web­sites where you can get this infor­ma­tion with a sim­ple search. A com­plete list of these sites with links directly to the search pages is pro­vided on our web­site at http://www.kgaction.com/secstlinks/. Also on this page is the info-graphic dis­played here as well as a free down­load­able file that you can import into your web browser. It cre­ates a favorites folder in your browser with links to all 50 states for easy future reference.

Con­firm that the name and address reg­is­tered with the state is con­sis­tent with the infor­ma­tion on the credit appli­ca­tion and inves­ti­gate dis­crep­an­cies. If nec­es­sary, use a sim­i­lar process with the respec­tive licens­ing authority's online web­site if the busi­ness is required to have a pro­fes­sional license, such as a con­trac­tor, real estate bro­ker, or med­ical professional.

Next, ver­ify that the busi­ness address is valid and is a com­mer­cial loca­tion. Type the address into Google Maps. Use the satel­lite view to quickly estab­lish the type of build­ing at the loca­tion. Use street view when avail­able and if you feel the need to take a closer look. Fur­ther inves­ti­ga­tion is rec­om­mended if:

The build­ing does not look appro­pri­ate for the type of busi­ness;
Sig­nage view­able on street view shows a dif­fer­ent com­pany name;
It is a res­i­den­tial location.

Most impor­tantly, con­firm that this is not a mail­box ser­vice, such as a UPS Store, or exec­u­tive suites loca­tion. Over 90% of the fraud cases we see have a mail­box ser­vice, exec­u­tive suites or res­i­den­tial loca­tion as a pri­mary address.

There are a num­ber of dif­fer­ent ways to try to deter­mine if a com­mer­cial loca­tion might be a mail­box ser­vice such as a UPS store. Google Maps typ­i­cally will give you a list of the busi­nesses located at a spe­cific address. More research is needed if:

  • Sev­eral busi­nesses are listed at the address
  • The busi­nesses have suite num­bers, which might actu­ally be mail­box numbers
  • The name of one of the busi­nesses indi­cates a print, copy, pack­age or mail ser­vices firm

If noth­ing shows up on Google Maps, do a copy and paste of the address into your default search engine for a quick search. In a recent fraud case, Google Maps listed 15 other busi­ness names at the loca­tion, but not the UPS Store. But, the first result when we put the address into reg­u­lar Google search gave us the UPS Store phone num­ber at that address.

If you ship mer­chan­dise to a mail­box, you are not going to have proof that your cus­tomer actu­ally got the mer­chan­dise. You will only have proof that it was received by the mail­box ser­vice (or exec­u­tive suite in that sce­nario). Your col­lec­tion agency will also be at a dead-end if the debtor skips on payment.

If you sus­pect or con­firm that an address is a mail­box ser­vice, ask the com­pany for their phys­i­cal loca­tion and con­firm it. If the loca­tion is a mall unit, con­firm that it is a phys­i­cal store and not sim­ply a kiosk in the com­mon area. Con­firm any home addresses pro­vided through Inter­net search and maps. It is crit­i­cal to have a home address if the busi­ness does not have a per­ma­nent phys­i­cal loca­tion or you get a per­sonal guar­anty.

Finally, use the Inter­net to get the phone num­bers and other con­tact infor­ma­tion for the trade ref­er­ences pro­vided by the poten­tial cus­tomer. Some fraud­sters pro­vide the name of a legit­i­mate com­pany as a ref­er­ence, but the con­tact infor­ma­tion is directed towards a con­spir­a­tor instead of the actual company.

If you are deal­ing with a legit­i­mate, estab­lished com­pany, this process can take less than five min­utes and be per­formed by any­one who uses the Internet.

This is not meant to be a com­pre­hen­sive list of fraud detec­tion activ­i­ties. Nor does the uncov­er­ing of a cau­tion­ary indi­ca­tor mean fraud is being attempted, just that fur­ther inves­ti­ga­tion may be war­ranted. In these cases, you may want to get addi­tional forms of con­tact infor­ma­tion, a copy of a driver’s license, busi­ness license, or util­ity bill for the busi­ness, and check trade ref­er­ences and credit reports more carefully.