• November 28, 2024

Fraudulent equipment hire – and how to avoid falling victim to scammers

By recognising the techniques and deceptions used by these criminals, you can develop a plan to prevent your equipment from falling into the wrong hands and protect your assets.

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A concerning trend is emerging in the UK: equipment is being fraudulently hired using false or stolen documents and identities by individuals or organised gangs who then illegally sublease or sell to third parties without the knowledge or consent of the rental company. Often, fraudsters target high-value plant items to order, which they ship out of the country for sale in the used equipment industry.

How an equipment hire scam can damage your business

Not surprisingly, fraudulent equipment hire can lead to substantial financial losses due to the direct cost of lost, stolen, or damaged equipment, legal fees, and recovery efforts. Moreover, repeated incidents of hire fraud may prompt insurers to raise insurance premiums, increasing operational costs for rental companies. Persistent issues with fraud can also harm a rental company's reputation, leading to a decline in customer trust and business opportunities.

So, what do you need to look out for?

An accomplished fraudulent hirer is cunning and persuasive and not easy to catch out. They typically use stolen identities or false documents, such as a fake driver's licence, business credentials, or insurance documents, to rent equipment.
 
Some may clone details of a genuine company, sometimes an existing customer, to evade credit checks. They might set up a new account and make a few initial payments to appear genuine before absconding with the equipment. Alternatively, they may provide falsified insurance or employment evidence, use pre-loaded credit cards, or pay in cash. 
 
Fortunately, by recognising the techniques and deceptions used by these criminals, you can develop a plan to prevent your equipment from falling into the wrong hands and protect your assets.

Steps you can take to prevent a fraudulent hire

The following measures can help you avoid falling victim to fraudulent equipment hire:

  • Implement strict identity and business verification processes. This involves verifying identification documents through government databases and cross-checking business credentials with official registries.
  • Perform comprehensive credit checks on prospective customers to assess their financial stability and minimise the risk of non-payment.
  • Request significant upfront deposits and utilise secure payment methods, such as verified credit cards or bank transfers.
  • Install GPS tracking devices on high-value equipment to enable real-time monitoring and facilitate recovery in the event of theft.
  • Ensure that rental agreements are thorough and legally binding, clearly outlining the terms and conditions regarding equipment use, return, and liability.
  • Conduct regular audits of rental transactions and provide staff with training on identifying and preventing fraudulent activities.

However, it’s important to remember that there is no silver bullet to solve this problem and that you must remain alert and vigilant to this increasingly common crime. 

What should you do if you are a victim of fraudulent hire?

If you find yourself a victim of fraudulent equipment hire, there are several steps you should take to mitigate the damage and seek resolution:

  • Report any fraudulent activity to your local and regional Police and to the National Policing Reporting Centre for fraud and cybercrime www.actionfraud.police.uk.
  • Inform your insurance broker or insurer about the fraudulent hire as soon as possible. They can guide you through the claims process and help recover some of the losses.
  • Collect all relevant documentation and evidence related to the fraudulent hire, including contracts, communication records, and any identification provided by the fraudsters. This information will be crucial for both the police investigation and insurance claims.
  • Share information about the fraud with industry associations and other businesses in your sector. This can help prevent similar incidents from happening to others.
  • Review your security protocols to prevent future fraud. This might include more stringent identity verification processes, enhanced payment security measures, and regular staff training on fraud detection.

Contact us

To learn more about how we can help protect your business, visit our webpage or call 01494 733 337.

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