Posted by MelissaCT on 6/9/06 8:54am
Msg #124922
Commercial Fraud Report - FYI
http://www.experian.com/b2binsights/0506/form_d.html?
Interesting article about commercial credit fraud. I received this in my email as a subscriber to Experian and it also applies to our businesses. Some highlights:
Fraud & non-payment is significantly higher with companies who provide incorrect information on credit applications. In our case, if the company calls from CA and the area code is TX, it should send up a red flag. If the city, state & zip don't match, a red flag should go up. If the phone number doesn't match the business, is should send up a red flag.
At least 30 percent of all commercial credit losses can be attributed to some type of misleading or fraudulent information. That means a significant portion of bad debt is actually fraud.
In a recent Experian study of bad-debt commercial accounts, high-risk addresses and phone numbers were found to be key indicators of potential fraud. When the address was identified as high risk, the average bad debt balance was six times higher than on comparable good accounts.
The study was interesting. Read it, if you have time. It certainly opens the door & makes one think about the bad debt encountered in this business -- is it really bad debt, or fraud?
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