Easy, Free Methods to Detect Potential Fraud

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Dean Kaplan

As a commercial collection agency, we frequently get claims where fraud was committed by our client’s customer.  Often it takes us only a few minutes using free Internet resources to analyze information provided by the customer to determine they never intended to pay.  A couple weeks ago we published “Free Fraud Detection Resources” in Credit Today, a step-by-step guide showing how to find fraud indicators in less than five minutes.  On our website we have a downloadable infographic which visually describes the process and a file you can import into your web browser to give you bookmarks (favorites links) to the business information portals for all 50 states.

To detect potential fraud, we review information on a credit application using:

  • Customer Website
  • State Business Information Portals
  • Google Maps
  • Internet Search

We look for inconsistencies between information on the customer’s website and the credit application.  If the contact information is different, or there is no phone number on the website, there is cause for concern.  We use the business information portals published by each state to verify the entity is a corporation or LLC, and that the contact and ownership information is consistent.

In the How To guide on Credit Today, we also explain how to use Google Maps and Internet searches to confirm the business location and other information provided by the customer.  The most common fraud indicator we find is a business address that is actually a mailbox service, like the UPS Store, or a residential location.  We do this research before we start collecting on any claim assigned to our firm.  It gives us insight into who we are dealing with and a heads up on potential problems.

It always saddens us when we see clients lose tens of thousands of dollars because they didn’t know how to spend five minutes on the Internet to make sure they were dealing with someone legitimate.  For collection agencies, these resources and techniques provide valuable information for legitimate claims and help minimize potentially wasted effort when dealing with criminal activity.

Continuing the Discussion

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  • avatar jessie-gomez says:

    Just because a business is not a corporation, website or LLC, does not make that business a risk.

  • avatar Dean Kaplan says:

    Jessie – thanks for your comment. You are right, those reasons alone do not make the business a risk. These three items are all indicators that we are probably dealing with a small company. On average, smaller companies are riskier, but that’s just the average. That’s why we call these cautionary indicators and suggest doing more research to get comfortable from a credit perspective. Many proprietorships with no website have an outstanding credit history and represent minimal credit risk.

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