Fraudster conning thousands from VARs, claims victim
Computer Communications Limited claims to have been scammed out of £15,000 after a cheque bounced and warns others to be wary
The boss of a reseller allegedly conned out of £15,000 is speaking out to raise awareness of what he believes is a fraudulent company targeting the channel.
Reseller Computer Communications Limited (CCL) claims that a firm operating as Pelican UK paid for 10 HP servers worth £14,500 excluding VAT with a cheque that bounced and also claims to know others which have recently been taken in by the same company for a similar amount.
When CRN contacted Pelican for comment via the phone number on its website, a man claiming to be a former Pelican employee named John answered and insisted he knew nothing about a fraud, but hung up when questioned further. The firm did not respond to emails from CRN either.
Romsey-based CCL received a purchase order (PO) from Pelican, and after taking payment via cheque, gave distributor Eurosimm the go-ahead to dispatch the goods directly – something the pair claims to do regularly. The reseller's managing director Dennis Armstrong admitted that he had not waited for the cheque to fully clear before dispatch, but said he had no reason at all to suspect fraud.
Eurosimm's CCL account manager Matthew Noakes told CRN that before CCL had raised the alarm, he had a sales lead passed to him from Pelican, which had been quoted £36,000 for 13 servers. Noakes said the firm does not take customer deals direct, so did not take the order.
Courier firm TNT, which delivered the servers directly from Eurosimm, told CCL via an email seen by CRN that it had delivered them to the address Eurosimm supplied – which was a house – but did not suspect anything untoward. TNT was not available to comment further to CRN.
Action Fraud, the body to which CCL reported the crime, referred the case on to the City of London Police, neither of which was able to comment on the case at the time of publication. Armstrong said he is unclear whether or not his allegations will be followed up, but hopes to turn his experience into a lesson for other VARs.
He told CRN: "We were sent a PO that looked authentic and official, although, as we now know, it was all a clever con.
"I had no reason to think they were going to present a cheque that was supplied by a company that did not exist and was going to bounce. I will admit to being a tad complacent but I am not sure I would have spotted the clues that would lead me to believe that the PO was a fraud.
"We have been in business for more than 13 years and have trusted the people we do business with. I am hopeful that the people who are responsible will be found before they have the opportunity to con other companies in the same way.
"My advice to other resellers is to only supply goods when they can prove that the money they have received into their bank account is verified and has been cleared and cannot be reclaimed by the sender."
Beware
Yesterday, distributors were warned to be on their guard against new fraud methods but Alan Norton, head of intelligence at credit reference agency Graydon, said that it is not just distributors that need to beware.
He said: "Fraud in the channel is on the increase. Distribution has always been a target, but as it has improved its fraud intelligence and procedures, fraudsters realise that resellers do not have that skill set and as a result, go for the weakest link.
"For smaller resellers, large orders are more attractive, but you must build up a payment history first. A large first-time order should have a big red flag above it unless there are guarantees in place."
Norton added that carrying out credit checks should be considered by resellers, as well as other simple steps such as checking the customer is VAT registered and checking the address on Google Maps to ensure it looks legitimate.