Due Diligence Risk Reviews – Atlanta, GA
“They seemed legitimate.”
Online fraud has caused the phone to ring a lot lately, with reports of an individual or a business scammed out of their hard-earned money. My colleague Catherine Olen recently addressed this in her article.
While many online scammers openly solicit their victims, this is not always the case. Sometimes the victim finds the perpetrator online and therefore has a greater sense of security about a service. Often, and we should understand this dynamic, an unfavorable financial transaction can occur with a registered business, which just happens to have a deplorable track record. The business or its principles may not have committed fraud, but red flags or questionable circumstances surround them.
So, how should we avoid this painful situation and protect our assets? First, we must make some acknowledgments. More than ever open sources exist to conduct reviews; however, we don’t always take the time to use them. Too many reviews may exist and we can’t discern from them. We have busy lives and the “quick click” is seductive. Business decision makers may spend an inordinate amount of time before they purchase a stock for their personal portfolio, a modest amount of time looking for a plumber, but less time on the next vendor to supply their company’s IT needs. Next, we trust our own judgment and genuinely want to trust others. We scan through a website, read some testimonials, perhaps even check with our Secretary of State to confirm a license (even fraudsters will take the time to register their bogus entity), and soon large amounts of money are wire transferred into an account.
Pause, reflect, re-evaluate and consider a professional to conduct a due diligence risk review, no matter how well educated or savvy you are. While anyone can conduct open source web research, only a few will conduct a deep review, understand where to look, or recognize certain risk patterns. The professional will normally have access to restricted information helpful in the analysis. Would you want to know if a company had civil judgments against them; if a principle had a criminal conviction; or a business reportedly founded in 1947 works out of a tent behind the burger barn? The sales agent driving up to your office in a BMW 7 series, the articulate sounding broker on the phone or the glamorous looking entrepreneur on a website may be a predator in disguise. “They seemed legitimate”, is a response we hear too often, along with shame on the victim’s part. It’s best to reach out and ask for help beforehand. A simple phone call to a professional can bring clarity when selecting a provider for an important service.
Zane Kinney, CFE, PI
Astinel Security & Forensics
Tags: Due diligence – risk reviews – fraud prevention