GWCI has seen a number of companies fall victim to fraud. One near miss we came across was of a manufacturing company acquiring a potential client in Italy. The client was looking to purchase a container carrying £40,000 worth of goods. With a potential profit on this sale worth £8,000, there was a push made by the manufacturing company to make the sale.

The company’s export sales manager was tasked with carrying out basic desktop due diligence and credit checks on the potential client, these came back with no adverse hits.

A visit was then made to meet with the client over dinner in his country, where all parties discussed delivery, terms of trade and payment methods.

Job done, or so he thought; double checking the delivery address he found it would have been impossible for a container to be off loaded there as it was a very narrow, possibly residential, street. Seeking clarification on this matter, the client became aggressive and eager to go ahead with the transaction. Something did not feel right.

Contacting the local embassy and amid further investigations, it transpired that the company were known locally to having some dubious history and rather concerningly, potentially linked to the mafia.

Needless to say the manufacturing company withdrew from the sale. This prevented the manufacturing company from suffering any reputational and financial damage that may have risen from this purchase.

At GWCI we come across many stories of this nature, although basic desktop due diligence is carried out on an entity (i.e., searching for adverse media or reviewing the entity’s website), these often come back clean.

It is our belief that when undertaking high-volume or high-value transactions a more detailed enhanced level investigation into a company’s corporate history, registry documentation and court cases, should be made.

With a detailed investigation the dubious information that was presented may have arisen earlier and the company could have focused their efforts on acquiring a more suitable client elsewhere, as well as saving the four months the sales process took.