Credit Fraud & The Business That Throws Cash At Junkies

July 7, 2008

Have you ever experienced credit fraud? Is your business at risk? Are you literally throwing money at fraudsters? Obviously, it’s smart never to offer credit, unless you’ve run the appropriate checks, but you’ve got to ensure they’re done properly.

Recently I heard an amazing story about an international company that was being constantly ripped off. Basically, they were allowing junkies to open credit accounts and although they took bank details etc, they didn’t run credit checks. In fact they didn’t run any checks at all - Mickey Mouse could have opened an account with them. So the fraudsters were able to obtain a heap of goods on account without paying for any of it.

The shocking thing is, the company didn’t even chase up the debts when they didn’t come in. Eventually, they would apply for winding up orders, wasting even more money. And it was only then that they’d discover that the account holder didn’t exist.

Apparently, the company still carries on allowing people to open accounts without carrying out checks. They say that their staff are just too busy opening new accounts to take a few minutes to carry out the checks.

This means easy money for the drug dealers. They often give huge shopping lists to junkies and tell them how to open these accounts and obtain the goods.

This company must lose a heap of money. The checks they need to run would take a few minutes. Surely it would be cheaper to employ additional staff to do this, rather than lose thousands of pounds on each bogus account?

I’m not going to mention this company by name, as putting this info online would attract even more scammers to their door.

Have you heard any scary credit fraud stories? Have you been a victim of credit fraud yourself? What measures could this company take to protect themselves?

Posted by cathlawson | Filed Under Mistakes

Comments

8 Responses to “Credit Fraud & The Business That Throws Cash At Junkies”

Marelisa on July 7th, 2008 3:04 pm

Wow, you’d think it would be a lot less expensive to take the time to run credit checks instead of losing all that money opening up bogus accounts.

I get about three e-mails a day claiming that a lawyer’s client died with no one to inherit their fortune and the lawyer is looking for someone to split the money with, or a deposed dictator from an African country is looking for a place to stash his money and is willing to split everything with anyone who will help him, and so on. I also get e-mails claiming they’re from paypal and that my account has been frozen and they need my information to unfreeze it. Incredible how many scam artists there are out there!

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John Hoff - eVentureBiz on July 7th, 2008 8:53 pm

Hey Cath - that’s crazy. It sounds like something kind of fishy going on over there. Do you think they could be doing some kind of fraud themselves?

I’ve been fortunate enough to never of had id theft. I pray it never happens.

@Marelisa - yeah, that guy in Africa keeps dying and wanting to leave his fortune, doesn’t he …. and I thought I was going to inherit his fortune.

John Hoff - eVentureBiz’s last blog post..Adding The ?Cool Factor? To Your Website
cathlawson on July 7th, 2008 9:45 pm

Hi Marelisa - I was almost forgetting the email scams. Did you get any of the ebay ones yet? I don’t know what they’re all about - but I know they encourage you to log into your ebay account, so I’m guessing they’re maybe hoping to get into your paypal account from there.

Hi John - You know, I never thought of that - but employee involvement could be quite possible couldn’t it?
RacerX on July 7th, 2008 9:45 pm

The latest two I am receiving are:

1 YOU WON INTL EURO PRIZE 750k EURO PRIZE
2. Dead European relative
3. Sign up for bank protection. Give us your details and we’ll protect your account guarenteed!

The scary thing is that everyday someone falls for it!

I do wish you’ld share the bank name so I could short the stock tho
RacerX’s last blog post..The Positive Side of the Internet
cathlawson on July 7th, 2008 10:06 pm

Hi Racer - It’s not a bank - it’s a company that supplies goods - I won’t mention what type though. Shorting the stock would probably not be a bad idea - but it’s easier to do it with a really small company - not that i would do anything like that of course.

Hey - maybe, we should do it together. We could go out and sell a heap of their shares tomorrow, then share this info on some of the stockmarket discussion forums.

Only joking. That would be really unethical. Mind you - if a company had ripped me off, it would be highly tempting.
Barbara Swafford on July 7th, 2008 10:52 pm

OMG Catherine,

That’s unbelievable. Why wouldn’t they do checks? It just doesn’t make sense.

I get the emails from the dead man, paypal, ebay, numerous banks and credit card companies (to update my information otherwise access will be denied-and I don’t ever have an account there)

But, like RacerX said, many do fall for the scams and are ripped off. That, is sad.

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Davina on July 8th, 2008 1:27 am

I’m shaking my head in disbelief! In this day and age?

I get endless emails telling me that I’ve won a lottery of some sort… but I know better than that
Cath Lawson on July 8th, 2008 2:25 am

Hi Barbara - I know. I’m hoping someone might read this - know I’m talking about their company and do something about it.

I’ve also had those dying man ones - they have to be the lowest of the low.

Hi Davina - It’s scary but some people do fall for these things. When I was with Rainbow, I remember getting an email about some franchisees who’d fallen for one of these scams.

They usually prey on people’s emotions - typically greed with regards the lottery scam etc. And I guess there must be quite a few greedy people out there.

Cath Lawson’s last blog post..Credit Fraud & The Business That Throws Cash At Junkies