Home > Uncategorized > Invoice finance fraud. My experience

Invoice finance fraud. My experience

Fraudster

Earlier this week  I met a new lead who was apparently interested in invoice financing. He had a good story to tell.

With a reasonably well detailed business plan, terms and conditions as well as a list of clients and their turnover, his business of selling pre paid sim cards through wholesalers to retailers seem to be well organised and if the figures were to be believed, very successful

With no existing financier in place and with seemingly fantastic growth this is precisely the lead most brokers crave for. And no wonder a couple of brokers had already passed his details to invoice financiers

But they should have done their homework. In fact, if they had been professional enough to have analysed the clients debtors before passing the lead, then they would have found some interesting results

I will come onto that, but firstly why analyse the debtors anyway? The reasons are simply that each lender takes a differing view of the debtors book risk and to find the best deal the broker should have answers to the inevitable questions which in themselves  can lead to the requirement for credit insurance. 

So what did i find?

He had ten customers. Seven of these had very nominal accounts filed or none at all. They also had one director and yes, the very same director

He was looking for up to £30k credit on each of these businesses. Now a pattern emerges.

Far be it for me to say that invoices would be raised, borrowed against and then verified by a number of “clients” who had no assets and no intention to pay. That would be a fraudulent scenario

I asked my lead for bank statements verifying previous transactions. I am still waiting

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Categories: Uncategorized
  1. Nikolas Pearmine
    September 20, 2013 at 11:54 am

    Very interesting Clive – Pays to do your homework…

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