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CEDA warns industry of scam plots

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CEDA is warning its members and partners to be on the lookout for fraudsters.

CEDA has received contact from several members and partners in recent weeks highlighting a number of scams designed to obtain goods without payment.

Director general Adam Mason commented: “It’s worrying when our members and partners are facing challenging business conditions that criminals are inventing a range of scams to try and steal their goods.

“On the face of it many of the tactics and approaches they are using seem very plausible, and it is only by vigilance and strict sales and credit control procedures that our members and partners are uncovering these illegal activities. They have asked us to share information on the tactics being used and to make the wider foodservice equipment community aware of them.”

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One example shared by a CEDA member via information from CESA was that a member company was approached requesting credit under the name of a legitimate company.

A source told Catering Insight that the company name used was Mellows Brown & Co which is a Surrey-based legitimate real estate letting company not involved in foodservice.

The company name was fraudulently used to arrange immediate delivery of an order of a substantial value.

CEDA believes sales teams should be made aware of this scam and to ensure thorough checks are made to prevent potential losses. The association stated: “It is a sophisticated con using convincing purchase orders, active website, valid contact name, number and e mail address, and financial credit checks. But, the reality this is a façade in front of what appears to be a valid company and individual.”

Elsewhere, a CEDA partner was approached for a credit account by someone using the credentials of a real company in Glasgow.

Catering Insight discovered that the name used was ‘POC Logistics’, and a quick internet search revealed that the website associated with that name is unreachable. The Glasgow address given for POC Logistics matches up to a consumer electronics repair firm which has nothing to do with the catering equipment market.

Nevertheless the fraudsters provided two trade references, which a source said were Plymouth Timber and SLS Wholesale. Catering Insight researched these names and could find no record of either at Companies House – the nearest similar name was a SLS Confectionery (Wholesale) Limited, an Ashton-Under-Lyne-based seller of bread, cakes, flour and sugar confectionery, which was actually dissolved in 2013.

Due to a fraudulent transaction last year the same CEDA partner was left out of pocket for a large sum of money by a customer claiming to be another legitimate company. They now insist that sales people visit all new customers before any credit is extended, and this prevented the fraud attempt outlined above.

Finally, another CEDA partner had a driver come to its premises to collect units on behalf of an established company in the catering sector. Alarm bells rang as the partner already delivered to that company and knew nothing about the order.

The driver asked the partner’s staff member to speak to a lady called ‘Amanda’ on his phone, and when they said they knew nothing of the order ‘Amanda’ said she was from the catering company the driver mentioned and gave the correct address for the company. The staff member at the CEDA partner had dealt with this catering company for many years and understands the company is run by a husband and wife team and has never heard of an Amanda working for them.

In a statement, CEDA concluded: “It’s clear that these scams are becoming more frequent, brazen and sophisticated and the catering equipment industry needs to be on its guard with robust financial controls and checks.”

Tags : CEDACESAfraudfraudulentscam
Clare Nicholls

The author Clare Nicholls

2 Comments

  1. Scam attempts definitely seem to be on the rise in various different guises. I had one yesterday whereby the “customer” wanted to collect direct from the manufacturer. This in itself isn’t necessarily a problem but when only contact number is a mobile, payment is by credit card and his trading name didn’t exist (“just use my first name as the order reference”) alarm bells begin to ring.

  2. What i tend to do if i am not sure is to google the address then go onto street view and call one of the shops nearby to check if the buyer exists and if the shop is still trading.
    If it is a con i call the buyer and ask him to meet me in a location about two hundred miles from the address where i can give him the goods.
    Of course i will not turn up but at least i get the satisfaction that i have got one over a conman.

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