Wise up to new fraud fashions

Fraudsters are finding surprisingly creative ways to steal from South African companies, and many are mastering the art of appearing to be legitimate business people. Security expert Paul O’Sullivan has described three new schemes that have become “fashionable” over the past few months, which have left numerous chief executives red-faced and with large holes in their wallets. O’Sullivan, speaking at the Johannesburg Chamber of Commerce and Industry building in Milpark, warned businesses about the schemes. While many of the usual types of fraud – SMS and e-mail offers that seem too good to be true – have become well known to the public, it appears that realistic, very specific deals are now in vogue.

Some examples of these are:

Scam 1: The Winning Bid

O’Sullivan described an engineering firm that received a call from an alleged Zimbabwean mining company, asking if the firm could tender for the supply of equipment. They Googled the company, and the first search result showed an in-depth website with mission statements, photos of directors, contact details and previous tender documents.

The engineering firm began sourcing the equipment, which according to Google was supplied in the country only by a company in Cape Town. The Cape Town company had an equally legitimate-looking website. The Cape Town supplier gave a quote, and the company then applied for the tender with the mining company. The patient scammers then waited a few weeks before sending congratulatory e-mails that the firm had won the tender. The Cape Town supplier then asked for a 50 percent deposit, which amounted to hundreds of thousands of rand.

After the money was paid, weeks passed and the shipment never arrived. Contact numbers stopped working. O’Sullivan said scammers can construct websites in hours, and that they approach dozens of companies at a time, all of whom win the tender bid and end up paying the deposit. Most of the time, the legitimate information posted on these fake websites is copied directly from other similar, legitimate companies, with a few minor changes to names, products and contact details.

Scam 2: The Early Bird Discount

In this scam, chief financial officers and chief executives are approached with brochures detailing business courses, which appeal directly to their targets. One particular course promised “mastery of the concepts of fundamental and strategic finance in just three days”. It was distributed to businesses across Africa earlier this year. The course was allegedly set to take place at the Southern Sun hotel at OR Tambo International Airport in March.

The brochure indicated that if those applying booked before a certain date, they could save R2 000 as an early-bird discount on the R11 000 course fees. O’Sullivan said the hotel had booked out the majority of its rooms to businessmen from around the continent, but later revealed that no conference facilities had been booked. The expert “course trainers” listed were also not informed they were set to be speaking at the nonexistent conference. O’Sullivan said the reason this scam works is that those defrauded are too embarrassed to pursue prosecution. He added that the same brochure, regarding a conference next month, is now making the rounds.

Scam 3: The Drop-Off and Knock-Off

This scam targets businesses in Joburg, particularly wholesalers of building equipment. Companies receive “official” letters of inquiry to supply equipment to the Department of Public Works. When the company applies for the tender, it is sent tender documents, and after a few weeks is informed that its bid was successful. To appear legitimate, the delivery address provided is usually a police station, where vehicles labelled with the department’s logo take the goods and are never seen again.