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What You Need To Know To Protect Your Business From Inventory Fraud Schemes

  • Security
  • September 2019
  • Premier America
Business email compromise schemes aren’t new. Historically, criminals have tried to steal money from their victims by tricking them into sending wire transfers or ACH payments to illegitimate accounts.
But recently, a new scam emerged. Instead of requesting money, fraudsters trick their victims into shipping electronics such as laptops, tablets, drones and more to unauthorized recipients. The perpetrators in this latest scheme are targeting electronics companies by using hacked business email accounts from small to mid-sized IT vendors.
The criminals use the hacked email accounts to contact electronics companies and order large shipments of inventory. The electronics company ships the items in the order while the invoice or third-party financing is being processed.
The company never receives payment, and the criminals fence the stolen inventory, which is never recovered by the victim. Some of the fraudulent shipments have been valued at as much as $600,000.  
Warning Signs of Inventory Fraud
Because of the significant impact this type of fraud can have on your bottom line, it’s important to be on the look out for signs that your business is being targeted. Here are a few:
  • Emails have been deleted or are missing from email inboxes without the user’s knowledge or permission
  • Inactive accounts become active again
  • Vendors or clients call asking for information about shipments or to change their payment information
Ways to Protect Your Business
While there’s no way to guarantee you won’t be a victim of inventory fraud, here are a few things you can do to help minimize your risk.
  • Disable old or unused business email accounts
  • Monitor email inbox settings for unauthorized installation of email rules to auto-forward or delete emails
  • Enable multi-factor authentication on email accounts to make it more difficult for thieves to gain unauthorized access
Call vendors directly to confirm requests for changes to orders or bank account information