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Watch Out for Common Red Flags of Trade Finance Fraud
July 13, 2021 Maureen Whelan, Business Development Specialist, Office of Small Business

Fraud is a growing problem in the United States that impacts many individuals and companies. As businesses increase their profitability and recover economically by exporting to global markets, trade finance fraud also causes grave concerns. U.S.-based companies are at risk of falling victim to fraudulent schemes, losing money and sometimes bankruptcy.

 

Trade finance fraud is a criminal act and violations are punishable by both fines and imprisonment. The Export-Import Bank of the United States (EXIM) recently released a new video, Protect Against Fraud in Trade Finance, to highlight some standard fraudulent practices during each phase of the exporting process.

 

EXIM created the fraud protection video to raise awareness of “red flags” that fraudsters might use to take advantage of your products or services through exports. By being mindful of these tactics, you can prevent your company from becoming a target of fraudulent activity.

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World Customs officers and law enforcement routinely review paperwork for inconsistencies to expose documentation deception. They specifically look for inaccurate information, such as:

 

  • Unclear product descriptions;
  • Falsified product numbers; and
  • Vague financial statements

 In today's environment of the Internet of Things playing a more prominent role in American businesses, cyber fraud and social engineering may pose severe threats to your company. They can lead to data fraud that may result in dire financial impacts.

 

Whether you are a beginner or experienced exporter, this video provides helpful reminders to educate your company staff about the hallmarks of fraud in trade finance.  Knowing the signs and protecting your company from financial harm, you can remain vigilant with the guidance in this video.

 

Are you interested in more videos produced by EXIM? Here are a few to check out:

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Don’t forget, you always have a trusted partner with EXIM and don’t need to go through your exporting journey alone. You can share your export financing needs with your EXIM Regional Trade Finance Specialist, who will explore financing solutions with you.

 

Get a Free Export Finance Consultation Today!