Policy & Compliance
Get smart – not scammed In a recent episode of BIFAlink TV, Member Policy and Compliance Director Robert Windsor discussed frauds that had been reported to the Association. The following is a summary of what was discussed.
M embers have increasingly been reporting to us that they have been a victim of fraud. Crime, including fraud, is a major problem for our sector – freight forwarders are being targeted. At any time of year it is essential that Members remember the most essential piece of advice BIFA has ever given – ‘Know your customer’. This can be achieved in a variety of ways but the most important is to have robust ‘due diligence’ procedures to gather and validate data on potential clients. Can you explain precisely the problems that Members have recently advised BIFA about? In 2023 we were made aware of the ‘Mango Scam’ and advised Members about it. It was a Europe- wide issue. Towards the end of 2024 we were approached by Members who used the phrase ‘Mango Scam’ to describe the situation. This time it is similar, but not the same. BIFA has noticed a very sharp increase in freight crime levels since the COVID-19 pandemic. What sort of monetary sums were involved ? The largest sum involved that we are aware of was £400k, one Member lost £156k and another £112K. A fourth Member lost £60k, but others were less willing to discuss their losses. Can you explain more about the differences and similarities in the 2023 and 2024 frauds? In 2023, the origin of the freight was wider – India, Pakistan and the Gulf States. There were connections to
Europe, particularly Belgium, and the commodity was almost always mangoes. In 2024 the consignments, in the main, originated from Bangladesh and were handled by an agent who is a member of a well-known agency network. Commodities have mainly been fresh fruit (including mangoes) but clothing has also been shipped under this scam. In all cases the fraudsters ran up large bills and then simply disappeared without settling their account. Is there anything unusual about the shipments? There are variations between each case, but the following common strands have been identified: • Often the fraudulent party only • Initial contact was unsolicited, with requests for quotations to various locations across Europe. • Large cargo volumes were proposed, despite the company’s limited financial capacity. • There was an acceptance of quotes without any inquiries or negotiations • The company address, listed as a Regus office, and the lack of prior import/export activity raised further concerns. • Directors associated with the fraudulent activity have recently changed, with the new director reportedly of Belgian origin and listed as having no significant assets. sought airfreight handling, without collection, Customs clearance, or destination delivery services.
“ In 2024 the (Mango Scam) consign - ments, in the main, originated from Bangladesh and were handled by an agent who is a member of
What types of fraud have BIFA Members been victim to? In effect there are two main types of fraud that we see: • Short firm fraud • Identity fraud. The former is particularly difficult to identify because the main issue is that a lot of people do not understand what short firm fraud is all about. An expert in dealing with fraud provided us with the following definition. It is where “fraudsters file bogus accounts at Companies House to generate massive credit recommendations from unwitting credit reference agencies, which are then used to enable goods and services to be obtained from suppliers who will never receive payment”. What can Members do to protect themselves? No process is 100% foolproof but
a well- known agency network
14 | January 2025
www.bifa.org
Made with FlippingBook Annual report maker