Credit insurer Coface has noted a marked increase in syndicates fraudulently obtain credit limits on large and reputable companies.
Credit cover is fraudulently obtained in the name of a reputable company by a person posing to represent that company. Goods are then sold and often collected by the same person.
The syndicates achieve this through contacts in various institutions and obtain copies of confidential documents such as letterheads, VAT registration numbers, banking details and cancelled cheques. This information is then provided to the credit department of the company they target.
“Historically, the incidence of fraudulent activities has always increased around the festive season, as well as around the Easter holidays. These are the times when credit departments are under pressure from sales and have less staff,” says Coface senior operations manager Jacqui Jooste.
“In our experience, the syndicates identify large and established companies that will not have difficulty in obtaining large credit limits,” says Jooste.
“Jooste says in terms of the law, even though a company may have credit insurance, it is only insured for valid credit transactions on goods and services sold and delivered.”
“Should the company be defrauded, the criminal transaction will not be covered under the credit insurance policy.”
Jooste advises that in addition to the above scenario, companies must look out for a combination of the following "fraud" indicators: