Predatory individuals perpetrate crimes of theft against companies by manipulating credit terms through misleading statements or actions which can cause significant financial losses. The real-life cases discussed in this chapter have been distilled into a variety of situations, circumstances and occurrences that, when identified, most often result in financial losses involving credit. These fraud warning signs are intended to serve as primary clues that a fraud against a company may be in progress.
The objective of this module is to provide a description of those known circumstances that most frequently reveal the trail of fraud and help credit professionals identify the steps necessary to protect their firms from financial loss through credit risk.
After viewing this module, students should understand:
Hallmarks of bust-out and same name scams.
Why unsolicited orders are suspect.
Why a large number of reference requests should be checked out.
How the credit professional can be used as a reference in a fraud.
Why unverifiable references, increased orders and unusual product mixes are suspect.
How to spot misrepresentations.
How to spot the warning signs of hidden ownership, the principle being unavailable, NSF and counterfeit checks.
How to spot financial irregularities.
What assets may be removed from a business.
How to spot identity theft.
Bust-Out and Same Name Scams
Large Number of Reference Requests
Being the Credit Reference in a Possible Fraud
Increased Orders and Unusual Product Mixes
Undisclosed Changes in Ownership
Unverifiable Backgrounds of Principles
NSF Checks Received
Counterfeit Checks Received
Financial Statement Irregularities
Identity Theft and Social Engineering
Fraud on the Rise
Speaker Bio: Toni Drake brings over 30 years of oil and gas credit experience to the table. Toni holds a CCE, NACM’s most prestigious designation. After earning her CCE, she went on to attend and excel at NACM’s Graduate School of Credit and Financial Management to further her education in the field of credit. Toni continues to support the credit profession as a speaker and instructor at events like NACM’s annual Credit Congress.