Together with Christmas and other holiday periods, this is one of those times when your company is most likely to become the victim of a scam – so-called because they usually involve the victim buying unwanted or overpriced goods.
This warning is outlined in Trevor Kitching’s book ‘Purchasing Scams and How to Avoid Them’. Trevor has a depth of knowledge and much experience in this area, the end result being a serious and practical examination of the subject and it’s prevention. Serious though the book is, readers will find it both entertaining and rewarding.
Trevor’s definition of a scam is "a dishonest scheme for obtaining money that usually stops short of fraud, or indeed a crime". How scams operate and who carries them out is the initial focus, the most likely targets being members of staff who have little purchasing experience but do have limited purchasing authority (say between GB pound 300- GB pound 500). How many of your staff would line up under this umbrella figure? Getting the day-to-day – or operational – purchasing function right is explained as being critical to success. Other tips include having a purchasing policy, correct separation of duties and a channel through which staff can actively report any suspected scams.
The following five chapters describe in detail particular types of scam, how they operate and how you can best prevent becoming a victim. Some of the scams are well-known, such as the bogus directory scam and the paper scam.
The latter is one to note, as a variant of this type holds a particular relevance for security professionals. The principle of this scam is that exaggerated claims are made with regard to health and safety items such as fire extinguishers. For example, when the colour change to fire extinguishers was enacted the scam was to let people believe that all units had to be replaced immediately as opposed to during an ordinary replacement cycle.
Such advice may have come from bogus or unqualified consultants who often describe themselves as energy/rates/ grant/ISO 9000 consultants, but have their own – rather than their customers’ – interests at heart.
Although most scam merchants operate just inside the law, thanks to the small print within contracts some of them border on or actually are fraudulent. Examples of these are included because, although they do not fit the scam definition, they are both similar in nature and prolific.
The penultimate chapter of Kitching’s book covers ‘borderline’ scams (eg facsimilies that require a premium rate fax back). The final chapter looks at the future for scams, and in particular the impact of the Internet, which allows victims to be targeted en masse.
Kitching’s overriding message is that the scam merchants will do their homework on your company, so you must do the same on them. That research must include a thorough reading of ‘Purchasing Scams and How to Avoid Them’.
