In non-delivery fraud, criminals promise highly sought-after goods, collect a payment, then never deliver. While the principle is simple, the fraud scheme is often sophisticated and can yield huge profits. Criminals can adopt a well-established modus operandi to suit any product, from Covid-19 masks during a pandemic to electronics or even everyday items such as paper. The bigger the sale, the bigger the profit. Products are sold by the container load, meaning that payments can easily run into the millions.
Contrary to popular belief, these types of scams aren’t just carried out by lone “wheeler-dealers”. Organized crime groups have gone to great lengths to set up a sophisticated modus operandi involving websites, salespeople, intermediaries, and of course, bank accounts. Scams often involve more than one country in order to make victims feel helpless and complicate investigations. Glossy advertisements imitate those of trustworthy businesses, attracting victims with high-quality images, brand names, and genuine reference numbers. Criminals approach potential buyers online or in person by infiltrating professional purchasing circles. Fake websites and social media accounts almost identical to those of known businesses offer several ways to make contact with the alleged seller. Online contact forms, phone numbers, and email addresses all give the impression of a legitimate customer service center.
Once contact is made, the sales exercise can begin. Prices for large orders are negotiated and validated by “superiors”. Scammers provide contracts, proforma invoices, and paperwork on official letterhead. Fraudsters then ask for an advance payment to secure the merchandise. The payments, which can go from 40% to 100% of the full order depending on the total amount, are made directly into accounts that have been opened under registered (fake) companies.
Once the scammers feel they have been uncovered, they end all contact. Phones are cut off, emails go unanswered and websites are shut down. Victims are left in shock and ashamed, often reluctant to report the fraud to superiors and police. Criminals, on the other hand, move on quickly and start a new fraud with a new product. If one domain is suspended or taken down, other domains are still available to attract new victims. The cycle starts again.
If you or your company are a victim of non-delivery fraud (scams) do not hesitate to contact our Global Investigation and Intelligence Team.