Fraud insurance

Every entrepeneur unfortunately has to deal with non-paying clients at one time or another. Sometimes it turns out that the client had no intention of paying at all. The goods are quickly resold and the fraudster runs off with the money. You can whistle for your money. Scammed.

Fraud is an increasingly common problem. Our customers regularly face financial losses due to internal and external fraud. Allianz Trade’s fraud insurance protects you against this. In the fraud insurance is insured for example:

• Financial losses resulting from the criminal activities of employees. These include theft, breach of trust, fraud, embezzlement or property damage.
• Fraud losses caused by false identity, as in the case of “CEO fraud” or diversion of funds by third parties posing as one of your business partners.
• Damage caused by third parties through certain forms of embezzlement, theft or fraud.
• The ability to co-insure damages caused by stealing trade secrets.
• Costs resulting from the fraud, such as data recovery and legal proceedings.

Focal points for recognizing fraudulent situations
There are several things that may indicate that you could be dealing with a fraud. Below are some points of interest that you should be alert to to avoid becoming a victim of this:

• The order was placed without any price negotiations.
• There are only cell phone numbers and no landline numbers available.
• A professional website with clear functionalities is missing.
• There is an unusual, often short, period between the first moment of contact, order placement and delivery.
• The delivery address is not the same as the company’s address.
• The client wants to pick up the goods quickly or the delivery address is changed later.
• Transportation equipment without advertising is used.
• Conflicting branches: the client is in a different branche than the supplier.
• The client is too eager to provide references, figures, etc.
• The registered office addresses are post boxes or service offices.
• The client is often difficult to reach.
• The client only has e-mail addresses from free suppliers such as Yahoo, Hotmail and Gmail.
• The VAT number is not valid (check at http://ec.europa.eu/taxation_customs/vies/).
• Check that the domain name of the mail address matches that of the website.
• Look up the buyer’s general phone number, call the company and ask for your contact person.

Do you have a suspicion? Beware, sometimes it’s not fraud after all!
If the above points occur separately it does not mean that fraud is involved. But if several points occur simultaneously then fraud is possible. Sometimes many aspects are present that indicate fraud without actually being fraud. Make sure you realize that this can occur, such as with start-ups.

Want to know more?
Would you like to know more about Allianz Trade’s fraud insurance and coverage options, contact us. Email info@modintcredit.com or call +31 (0)88 5054700.

Source: MODINT Credit & Finance
Photo: Shutterstock