More Signs of Credit Fraud

• Always look a gift horse [or a gift order] in the mouth,
• Develop specific policies for scrutinizing new accounts that suddenly want to purchase large amounts on open account terms. Most relationships start slowly, and large orders come only after the vendor has proven itself again and again,
• Be suspicious when a new customer needs large dollar orders delivered to them by overnight carrier,
• Watch the profit margins at which the sales are being made. If profit margins are unusually high, it may be because the customer has no intention of paying the invoice anyway,
• Recognize that simply because a customer has enough money on deposit on a certain day to cover a check it has written does not mean that the money will be available when the check is presented for payment. By hand delivering the check for the first order to our salesperson late in the day, this customer was guaranteed at least one extra day of float on the check before it could be presented to its bank and ultimately returned due to insufficient funds,
• Make certain that your salespeople send checks to your lockbox, not to the main office. Since the check in question was mailed to our headquarters and then forwarded to our bank for deposit additional time was lost,
• When in doubt, ask questions - even if you feel uncomfortable or you think that it makes you look paranoid,
• Refuse to be rushed into releasing an order pending even when the order in question is a "hot, rush" order as this one was.

Copyright 2010.  Michael C. Dennis.  All Rights Reserved