Ten Point Plan to combat Long Firm Fraud

A Guide for Credit Controllers

Long Firm Fraud (also known as Consumer Credit Fraud) is criminal activity whereby a company is temporarily set up, supported by fake references, so that it can trade on credit with wholesale suppliers, with no intention of paying for the goods supplied.

By such actions, the maximum goods are obtained over the maximum credit period and the criminals duly abscond with the proceeds.

The following Ten Point Plan was created by DC Mark Woods of Northumbria Police Economic Crime Unit and should be consulted prior to authorising the opening of an account to help prevent you or your business from becoming a victim of this crime.

Always ask for trade references (the more the better) and always take them up in writing and verbally.
Is the referee impartial? Have they been used before? It is helpful to keep a database of trade references used.
Ask for original company headed notepaper, not copies. Can they provide up-to-date accounts? If so, ask for them.
Can they provide banking references, if so, take them up. Check any VAT numbers provided.
Credit check the names of company director’s for bankruptcy orders and CCJ’s.
Confirm any telephone numbers provided, don’t accept mobile phone numbers for companies.
Never accept handwritten orders of faxes.
Don’t allow the delivery of goods to different addresses without checking them.
Know your customer. Are they who they say they are? Ask for personal identification preferably with a photograph.
How was your phone call answered? Did they give a different company name?

Further reading:

ACPOS Best Practice Guide to Long Firm Fraud
Ten Point Plan to combat Economic Crime
Ten Point Plan to combat Identity Fraud