It is the new year but criminals and fraudsters are taking no time off and businesses should be aware.
There seems to be a rise of fraud especially relating to businesses that are seeking tenders from government departments.
According to a statement by First National Bank, businesses who are eager to secure lucrative contracts as providers of goods and services for government across the country are urged to be cautious against criminals who use this as an opportunity to defraud them.
WHY TENDERPRENEURS?
According to FNB, tenders often cover a wide range of sectors and vary in the scope and size of contracts available, making them appealing to many SMEs who are still recovering from the financial impact of Covid-19.
Roshan Jelal, Head of Fraud at FNB Commercial says, “tender Scams remain one of the most prevalent Modus Operandi targeting unsuspecting businesses or individuals who are misled into believing that they have been awarded a tender from government. Scammers often impersonate Government departments and fraudulently get access to company data, banking details, goods and services by misleading businesses into believing they have secured a tender/contract.”
It should be noted that fraudsters posing as officials from state-owned companies, government departments, municipalities, state, or private hospitals will engage the victim to tender for the supply of ‘unique’ products, according to the bank.
WHAT FRAUDSTERS DO - TAKE NOTE
FNB says that shortly after tendering, the victim receives a notification that they won the tender.
The victim’s company releases the goods but will never receive payment or the fraudster sends a Request For Quotation (RFQ) to the victim for products that are so unique that a search yields the name of a single supplier (which is a fictitious company set up by the fraudster). The victim is requested to pay for the goods before delivery.
Jelal says, most often, victims of these tender scams are small businesses that are starting out and are less experienced about the tender process. In some instances, the business owners often secure loans in their personal capacity, or borrow funds from business associates, friends, and family, in order to secure the tender, leaving them in a far worser financial position.
Businesses are encouraged to consider the following:
- Be wary of unsolicited and unrealistic requests to secure the tender/contract.
- If you are on the Government supplier database and have received a request to quote or to tender, it is advisable to contact the department (using contact details you source yourself) to validate the request.
- Ensure you are aware with how Government procures goods and services. Visit the Government’s tender website for information on the tendering process.
- Interrogate requests for upfront and urgent payments – this should always be treated as a red flag. It is always advisable to never pay money to get money.
- Don’t be duped by credentials – some fraudsters often go to great lengths to make their credentials legitimate.
“Businesses who have fallen victim to this type of fraud, should contact their Bank immediately to be assisted to stop any payments, if possible, as a matter of urgency,” concludes Jelal.
BUSINESS REPORT