Now more than ever it is imperative for small businesses to prevent business customers from making fraudulent purchases.  No company wants to be defrauded, but the small business faced with a difficult economy has even less wiggle room than ever before.  One way to stop fraudulent purchases before they even happen is to verify every potential new customer’s credit application. 

One key step in the verification process is to confirm that the customer’s business address is a legitimate commercial building.  This can be quickly checked by using Google Maps to search the address.  Anyone who is familiar with internet searches can perform this task making it easily delegated to clerical staff. 

Once on the Google Maps site, simply enter the customer’s address into the appropriate field.  Zoom in on the satellite view to easily determine the type of business at this address.  If street view is available, use this to take an even closer look, even down to the sign on the door!  If you see any of the following, keep investigating:

  • The building at this address does not look like it would be appropriate for the customer’s business;
  • The sign visible on the street view is not the name of the customer’s business;
  • The address is a residence.

Also requiring further investigation is any address that comes up on Google Maps as a mailbox service, UPS store or executive suites building.  In our commercial collections business, over 90% of the fraudsters we see utilize these types of addresses as their main business locations.

There are several ways to determine if your customer’s business address is a mailbox service such as a UPS store.  In Google Maps, your search will typically list the businesses located at the address you are searching for.  Continue to investigate if:

  • The address lists suite numbers which may actually be P.O. Boxes;
  • Several businesses are located at the address;
  • The name of one of the businesses listed is obviously a mailbox service, print, copy or package business. 

Sometimes your Google Maps search will yield no result.  In these cases, copy and paste the address into your normal search engine.  In a recent debt collection case which turned out to be fraudulent, our Google Maps search listed 15 businesses at the debtor’s address, but none of the business names led us to suspect a mailbox service type situation.  When we searched in our regular search engine, the result showed a UPS store address and phone number. 

Be careful if you are shipping to a P.O. Box because you will have no way to verify that your customer ever actually took possession of the product.  The only proof of delivery you will have is that the merchandise was received by the mailbox service or (executive suite).  In a case where delivery was to a P.O. Box or executive suite, the only way to obtain proof that your customer got the merchandise is to sue and subpoena the records from the mailbox service, and that is too expensive in most cases.

When you check your customer’s business address and you discover that they are located at a mailbox service, ask for the physical address and then verify it.  If the customer’s address is inside a shopping mall, verify that a true store location exists and not just a shared location inside the hallways.  Confirm any home addresses through Google Maps and search engine searches.  Anytime a customer’s business does not have a permanent physical location or if the customer provides a personal guarantee, it is imperative to have a verified home address.  For more tips on how to evaluate credit applications, check out the resource center our website.

 

About the Author:  Dean Kaplan, President of The Kaplan Group, a commercial collection agency, has spent the past 30 years consulting for and negotiating with hundreds of companies across the globe.  Since 2001, he has divided his time between his collection agency and consulting projects.  Throughout his career, Dean has resolved thousands of commercial collection matters and completed over $500 million in transactions while traveling to 40 countries to complete deals. He understands business culture from being in the trenches with small business owners, to analyzing the operations of mid-size companies, to representing billion dollar companies in complex international negotiations.