Goods and Trade Credit Fraud

Fraud offences against companies occur in a variety of forms, particularly in the field of employee-related crime. One of the most common types of fraud committed by third parties is the ordering of goods without any intention of paying for them. This is known as trade credit fraud, but it is often referred to almost synonymously as order and shipping fraud. Among the tasks of Kurtz Detective Agency Switzerland is to investigate the perpetrators and ensure their legal prosecution: +41 44 5522 264.

Both Private Individuals and Companies Can Be Perpetrators or Victims

Transactions in which goods and trade credit fraud can occur take place in the following constellations:

1. Transactions between natural persons
2. Transactions between legal entities
3. Transactions between natural and legal persons

Trading platforms such as eBay or Ricardo offer well-functioning protections thanks to mutual payment security models like PayPal – safeguards which, for example, are absent in classified ad purchases, primarily affecting private buyers. Companies are particularly at risk when offering goods on invoice under the principle "delivery first, payment later". Here we are not merely referring to private fashion purchases from Bader, but specifically to business-to-business transactions, as enormous values of goods are shipped daily on a trust basis.

Example of Goods Fraud – Defective or Missing Goods

If Company A orders high-value goods from Company B, it trusts that it will receive exactly those items – in the quality and quantity specified. A rude awakening occurs when A realises that the delivered goods are of inferior quality and do not correspond to the purchase agreement. It may even be a cheap import from the Far East, advertised as a Swiss product. The value of the goods delivered therefore does not correspond to the amount paid, nor to the value of the agreed delivery.

If A uses the substandard goods, for example as spare parts in its production machinery, this could lead to damage to its equipment and production stoppages. If it resells the defective goods to its own customers, it risks dissatisfaction, a significant increase in complaints, and ultimately reputational damage. A customer who feels deceived is unlikely to place another order. At the latest, if B refuses to accept the return of the goods or to refund the payment (in full or in part), despite clearly failing to meet its contractual obligations, it is committing fraud. In even worse cases, trade fraud may mean that no goods are delivered at all – money lost and no goods received.

Our Zurich business detectives assist you primarily when the evidence is unclear or the debtor company or its authorised representatives cannot be located. Receive non-binding advice from our experienced investigators by using our contact form or calling us.

Example of Trade Credit Fraud – Delivery Without Payment

Trade credit fraud is the reverse of goods fraud: goods are delivered but not paid for. Naturally, our Swiss detectives are also at your side in such cases. Ordering, purchasing, and shipping on invoice are routine in both retail and wholesale; unfortunately, unpaid invoices are equally common. The perpetrators are primarily private individuals, often repeat offenders. The financial damage per incident is usually in the three- or four-figure range. It is thus less the individual cases than the number of offences that is significant. Until the turn of the millennium, catalog purchases were the preferred method; since then, online trade has provided new opportunities for fraudsters. They have goods of high value delivered to addresses they do not occupy, temporarily affixing a nameplate to the mailbox, entering unoccupied rental properties either authorised or unauthorised, pretending to be residents, or simply waiting by the door to intercept the delivery, feigning coincidence with the courier. They then take possession of the goods, sign for the delivery, and move the parcel to another location once the courier is out of sight. In recent years, PickPost and DHL parcel stations have increasingly been misused for these fraudulent activities.

Our experienced Zurich detectives are happy to assist you throughout Switzerland in clarifying such offences against your company. We investigate the course of events and the whereabouts of the perpetrators, secure – where possible – the missing goods, and initiate their return. Upon completion of our work, we provide you with a legally admissible report. If necessary, send us an email describing the circumstances at kontakt@kurtz-detektei-schweiz.ch or call our Zurich detective agency free of charge at +41 44 5522 264.