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Reference checking tips to stop business fraud before it starts


Verifying is a regular activity for small business owners, but as you make the phone call to check a business reference, did you ever stop to think that the person on the other end of the phone might not be who they say they are? Fraudsters will take advantage of your trust in many devious ways:

  • References supplied by a fraudulent company may not be all they seem at first glance. To avoid being lulled into a state of complacency by a company with all the right references, re-examine those references with a more critical eye.
  • Be suspicious if a reference provided by the new customer gives an instant "glowing" account without taking time to consult records when you call.
  • Both trade and friends or partners of the fraudulent businessperson can fake bank references. Take care when you are provided with a specific extension from an individual and are told to "Ask for Joe".
  • Answering services can be used to provide a false confirmation or reference.
  • Beware of hard-to-trace fax numbers supplied as the only way to contact references. They may all lead to a single location where one individual can respond to reference checks using a variety of business names.
It's unfortunate that B2B criminal activity is on the rise, but you need to protect your business. Data validation on business information is an invaluable step. One of the best defenses is conducting regular business credit checks using Experian's SmartBusinessReports.

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