Accounts Receivable departments need to stay on their toes for scam artists and fraudsters. Plenty of companies’ cash flows are squeezed tighter than ever these days. So the last thing you need is to accept and fill an order from a source that’s not going to pay for it.
Turns out there are a few easy-to-spot signs that a bad actor is eyeing your company for a steal. Seeing one or more of these signs doesn’t guarantee someone’s trying to pull a fast one at your company’s expense – but they’re red flags that need to be spotted right off the bat.
Red Flag 1: A generic email address
If a prospect uses a free (and mostly untraceable) e-mail service such as Gmail or Yahoo!, your A/R staffers need to pause before putting an order through.
Reason: That customer can easily vanish and be impossible for your staff to track down.
A/R should press for a “business” e-mail before processing an order. If the prospect can’t do so, make sure A/R goes up the ladder at your organization for approval.
Red Flag 2: A “too neat” mailing address
123 Main Street is a dead giveaway, for sure. But there may be some other addresses that are less subtle, but very definite fakes.
Consider making it standard operating procedure to have A/R or credit staffers check an online mapping tool to verify all prospective customers’ addresses.
It takes a minute or two to check and the payoff – avoiding fraud – is well worth the time.
Red Flag 3: Pushing for a rush order
Rush orders may signal someone’s trying to make a fast getaway, without paying the bill. If salespeople are being pressured for an extremely tight turnaround or there’s a request for express shipping, ask for a reason.
Can’t get one? You may have a potential problem.
Red Flag 4: A problematic purchasing pattern
Chances are many of your customers have specific buying patterns. But when you have a new customer, watch out for this pattern that could signal trouble: several low value orders, followed quickly by a large, high-volume order.
This move is a telltale sign the transaction could be fraudulent.
