Against the odds: 'Greasing the wheels' – true crime in logistics
Here’s your checklist
The independent freight forwarder sector appears to have become the latest victim of internet crime, with several cases of international payments between forwarders being redirected into fraudsters’ accounts.
Over $100,000 has been stolen from WCA members in a series of stings over the past nine months, according to WCA vice-president of customer service Andy Robins.
WCA, the world’s largest network of independent freight forwarders, with over 5,000 members across the world, has monitored an alarming increase in the number of forwarders targeted, although Mr Robins believed that the fraudsters’ modus operandi has largely been established and he told The Loadstar that forwarders need to be especially vigilant if their international partner claims to have changed bank account details during the payment process.
“There’s a hacker out there watching freight forwarders and getting into the negotiations at the last moment.
“The pattern seems to be that they will hack into an email conversation between two members, and then, at the last minute when a payment is due to be made, they block the emails of the recipient of the funds and instead email the agent who is due to pay and informs them of a change of bank details which the funds need to paid into if the shipment is to be released.
“Once the money has been paid, the hacker withdraws it and closes that account. Our members know nothing about it until the receiving agent begins asking where the money is. The sender replies that it’s already been paid – and then there is a load of to-ing and fro-ing until they realise they’ve been conned,” he said.
In one case, a Bangkok agent lost $21,000 after emails to its partner in Shanghai were intercepted and then blocked, and the money was diverted into a UK bank account set up with a similar name to the Bangkok agent.
In another case, a Nigerian member lost $33,000 after a fraudster, purporting to be its Hong Kong partner, attached a letter – complete with forged letterhead and logo – to an email informing it that its bank account had been switched to another UK bank, but with a completely different name.
Both cases involved accounts at Barclays Bank.
A particularly bizarre case was between Brazil and China. Believing he was communicating with his Chinese partner, a Brazilian agent was asked to redirect his payment to a bank account in the Seychelles. When he responded that he couldn’t pay into a Seychelles bank account because of a prohibitive Brazilian tax regime, he was requested to instead pay the money into a Spanish account.
“It’s just looks wrong – what is a Chinese forwarder doing with Seychelles and Spanish bank accounts? Why are payments between Thai and Chinese, and Nigerian and Chinese members going to UK bank accounts?”
WCA’s executive vice-president in charge of legal issues and financial protection, Michael McMullen, wrote to Barclays requesting it investigate the cases, but received what appears to be a boilerplate letter in return which stated: “At the time your funds were received into this account, we had no knowledge or suspicions that this was anything other than a legitimate account. Although we can confirm that the account into which you transferred money has now been closed, no funds remaining at the time we were made aware of your situation. For this reason Barclays is unable to return any money to you.”
It suggested that WCA members ought to use PayPal instead.
Mr Robins said that the funds were withdrawn and the account closed down immediately after the money was transferred, while the forwarders only realised they had been scammed around “five to six days later”.
He added: “I think the problem is that the accounts departments of many companies are just out of the loop – the book-keepers don’t see why that’s fishy; they’re so used to dealing with funds going all around the world that the alarm bells aren’t ringing.
“WCA members should always ask for the WCA ID number if they are told to any change to banking details. And I also urge members to think about using our Partner Pay programme, which acts as a clearing house.”
He also believes the problem goes beyond just the WCA network.
“I think, because of the size of our network, we are able to see a pattern emerging, and my fear is that this could be the tip of an iceberg of a problem across the wider freight forwarding industry.”
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Comment on this article
Paul CourtneyFebruary 05, 2015 at 1:57 am
I am wondering the following paragraph should be
“It suggested that WCA members ought to use PayPal instead.”
“it was suggested that WCA members ought to use PAY PARTNER instead”
PAY PARTNER is a WCA internal payment system.
Gavin van MarleFebruary 05, 2015 at 2:57 pm
Nope – I’ve seen the correspondence from Barclays, and it (Barclays) specifically suggested PayPal. Certainly WCA management has suggested members use Pay Partner, which is apparently free and can save forwarders a fortune in cross-border banking fees, which is another story altogether.