The Covid-19 health emergency has weakened global supply-chain security and rendered the world a giant petri dish, ripe for incubating unprecedented levels of fraud.
With skyrocketing demand for masks, other PPE and certain pieces of medical equipment, the types of fraud seen surrounding the sale of these items are very sophisticated. They prey on the fear around diminishing supplies and the resultant need for quick decisions and even quicker payments - all aided by a reduction of red tape to vet new suppliers so that urgent requirements can be fulfilled.
Reports in the UK and US alike have involved, amongst other schemes:
- Upfront payments and non-delivery of goods. Using the scarcity fear factor, fraudulent “brokers” and “vendors” are requesting – and receiving – 100% payment of goods up front and then promptly disappearing.
- Non-payment of goods. Legitimate vendors operating through Payment on Delivery terms are vulnerable.
- Cloning / falsely impersonating legitimate companies. 3M is not the same as 3.M.
- Business email compromise. Spoofing legitimate email addresses / using nearly identical email addresses to intercept payment instructions and redirect legitimate payments to their own bank accounts.
- Delivery of fraudulent or incorrect goods. Fake safety certificates and fake goods supplied – This could be boxes filled with bubble wrap, or more dangerously, sub-standard equipment that puts lives in jeopardy.
- False promises. Scammers claiming access to such a large volume of goods where in reality a manufacturer will tell you it would take years of dedicated international production without a single sale to achieve that level of stockpile and availability.
- Scammers claiming official affiliation as “Brokers” for well-known suppliers.
In normal times, there is an established process for these procurement activities to keep supplies flowing to fulfil predictable requirement levels. But we are not living in normal times so hospitals, governments and businesses are all competing against each other in an intense frenzy to secure supplies, often outside of their usual procurement channels.
This unchartered territory is dangerous, and it is more important than ever to take measures to prevent falling victim to fraud. The effect of a lack of diligence could not only waste valuable taxpayer and shareholder/investor funds but could also compromise safety of frontline workers if they are provided with fraudulently certified fake N95 respirators.
The FBI has provided official advice to route procurement payments for PPE and medical equipment supplies through an escrow account because nobody is immune to the effects of fraud without taking appropriate precautions.
Utilising an escrow can significantly mitigate the increased risks involved with medical equipment and PPE transactions. Shieldpay’s robust KYC and KYB checks that take place prior to any agreement is entered, coupled with the ability to hold funds in escrow until full delivery and quality checks being completed, protect valuable funds from falling victim to fraudsters – for individuals, business and governments alike.
Shieldpay escrow features:
- Robust KYC and KYB verification checks. Confidence that you’re dealing with legitimate parties before moving any funds.
- Quick set up times. 48 hours to set up a Shieldpay escrow vs. up to 6 weeks to set up an escrow with a bank.
- Simple and seamless process. Can be completed with or without the involvement of lawyers.
- Full transparency. The Shieldpay platform allows full transparency to all parties at any time around status of funds – user access and permissions can be fully customised as required.
- Document storage. Upload key deal documents to the platform, e.g. invoices, proof of delivery, authenticity certificates.
- White glove service. Providing end-end assistance.
For further information on how we support large ticket medical PPE transactions and beyond, please get in touch with Nabila Kazi to hear how we can help set up an escrow facility within 48 hours across the UK, Europe and US.
Find out how to use escrow as a new way to manage supply chain risk here.