FBI to Small Businesses: Look Out For This Purchase Order Scam

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The FBI has posted an alert about the  latest internet fraud scheme, targeting small and mid-size businesses and universities all over the country.

More than 85 companies and universities nationwide have been affected, about 400 incidents have targeted some 250 vendors, and nearly $5 million has been lost so far.

The so-called ‘Purchase Order Fraud’ tricks retailers into believing a PO comes from one of their established customers, but the goods end up being shipped elsewhere, before being quickly re-shipped to Nigeria.

The scammers order large quantities of items like laptops, hard drives, expensive specialized equipment, or medical and pharmaceutical items.

The criminals set up fake websites, email accounts and telephone numbers that are almost identical to those of real businesses or universities; they gather information about an organization’s purchasing account; ask for a quote for products, and request the shipment on a 30-day credit. (Since the real institution has good credit, vendors usually agree). They provide a US shipping address to a warehouse, a self-storage facility or a private residence, which then re-ships the items to Nigeria.

 

Indicators of Fraud

  • Incorrect domain names on websites, e-mails, and POs, which look almost identical to the real thing.
  • Shipping address is not the same as the business location, or is a warehouse, a private residence or a self-storage facility.
  • Emails are poorly written, or contain grammatical errors.
  • Phone numbers are not associated with the company or university, or are not answered by a live person.
  • Orders are for unusually large quantities, with a request to ship priority or overnight.

 

If you are the victim of fraud, contact your local law enforcement as well as the FBI. You should also report the crime to the Internet Complaint Center (IC3). If the fraud is discovered before the goods are shipped to Nigeria, there is a good chance the merchandise can be recovered. More than $1 million worth of merchandise has been recovered, thanks to businesses quickly discovering the fraud.

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