Fraud is rising. Every year thousands of innocent students, unsuspecting businessmen and investors are duped by fake companies, scam placement agencies and fraud investor centers. In times like these it is imperative that we learn to make the full use of the resources of the internet, save our time and money and prevent us from getting cheated. How? Read on..
|Courtesy: Douglas Palmer, Flickr|
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Unfortunately, it has given rise to fraudulent opportunities as well. In the past 12 months, the level of fraud has increased by every measure with 70% of the companies reported suffering from at least one type of fraud in the past year. Individual businesses also faced a more diverse range of threats: on average, those hit in the past year suffered 22.3 different types of fraud each, according to the Kroll Global Fraud Report 2013-14 which is a part of the Annual Global Fraud Survey conducted by business security consulting firm Kroll Advisory Solutions.
Consequently, the economic cost of these crimes has mounted. 81% believe that their firm's exposure to fraud has increased overall in the past 12 months attributing one of the reasons as the complexity of the IT infrastructure. Greater exposure to fraud from IT complexity is being exploited increasingly by scam companies such as: investment companies, job placement/consulting agencies etc.
Hence forth, in such "don't-ransack-my-balls" kinda times it is important that we stay prudent, alert and not-drunk before availing services of any firm. With that being said, you can yourself check whether a company is genuine or not by doing background checks on the firm using free-to-use internet tools, your logic and common sense.
NOTE : Don't base your opinion and decision for a company based on just one or two results. Do all the below mentioned checks and then making use of your rationale, intellect and wisdom decide for yourself whether the company is genuine or not. Sometimes the fraud company's website will be so professionally well made that it becomes difficult to be sure. In such cases, perform all the checks carefully, look attentively for red flags on the company's site and interlink the information you find from different sources before drawing any inference.
1. GOOGLE THE COMPANY
This is the most intuitive step that everyone should do. Google the company and see what results come up. Search for company reviews, employee reviews and complaints by googling "Company-name + Scam" and replacing "Scam" with "Fraud" or "Review".
2. CHECK COMPANY REVIEWS
Check company review websites that offers you an inside view at jobs and companies by enabling employees to post pro's and cons about their companies such as:
NOTE: Be smart about the reviews that you read. Reviews can be made up too. The reason for giving the above mentioned multiple sources is so that you can compare reviews and decide for yourself.
3. CHECK FOR COMPLAINTS
Apart from reviews, you can find complaints of fraud companies by people that have been duped by them on many websites like:
4. CHECK REGISTRATION DATA
When a website's domain name is registered, the registration data of the company's website gets saved and that can be accessed by anyone. So once you have the firm's website address, it's time to check it's WHOIS records. Go to who.is and type the website name (type the domain name without the "www"). Now if a company is not fraud and is genuine then it should have nothing to hide and you should be able to see all the official registration data.
If the registration data is filled with gibberish, it means that the registration data has been held private and can be considered as a red flag. However, registration data kept private/hidden is NOT a sure sign of fraud. Some hosts like to keep their information private. This does not necessarily mean that it's a scam.
Although, even if the data is kept hidden, you should still be able to see the date when the website's domain address was registered. In many situations, i found that the website's "About" section boasts about the company being in operation for the last 10 or 5 years but the WHOIS data shows it being registered just this year. So in this way, you need to interlink different data together and draw conclusions using your intellect. Some registrars like GoDaddy do not show the registration data on the WHOIS page, but rather give a link to their own WHOIS database. In such a case, just follow the link and you should be able to the information, hidden or not.
5. CHECK GOVERNMENT RECORDS
If a company does in fact exist then it should have a government record, right? Well lucky for us most countries keep an open record of the registered companies for everyone to see. However, it's worth mentioning that some fraud companies register themselves as real companies on govt record because they think it somewhat adds a level of authenticity moreover they know that the money spent on registering themselves can be reimbursed from their fraudulent methods and after they've made their profit, they disappear which is why i say never to base your decision on the company on a single check.
Anyways, there is a lot of information that you can cross-check with the company name such as Company's Master data, Index of Charges, Signatory details, Registration date, Company address. However, the information provided may vary from country to country. Anyways, all this information should clear most of the air about the company being researched because this method is a quite solid since it includes official government records.
If a company is registered in India, you should be able to find about it in the records of Ministry of Corporate Affairs.
Retrieving Company Name:
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Enter the Company Name. If the company exists it will give you a name and bunch of other data including a Ref No. of the Company.
Retrieving Company's Master Data:
Use the company name and the Ref No. obtained above
Retrieving Index Of Charges:
Use the company name and the Ref No.
Retrieving Signatory Details:
Use the company name and the Ref No.
SEC EDGAR DATABASE:
The U.S Securities and Exchange Commission (SEC) website contains the records of all SEC listed companies registered in America since 1996. The data on this SEC's website is free.
Company's House is the official UK government register of UK companies. The website gives free access to data such as Companies Name, Address Index and the disqualified directors database. However, information such as annual accounts are priced.
This site hosts a searchable database of Canadian federal corporations. Search by corporate number, name, city, province, status, creation date. Available information includes name, previous names, status, address, names of directors, date of incorporation, when annual returns/summaries have been filed, amalgamations and subsidiaries/parents.
System for Electronic Document Analysis and Retrieval (SEDAR) is the official site that provides access to most public securities documents and information filed by public companies and investment funds with the Canadian Securities Administrators (CSA) in the SEDAR filing system.
Those are just some of the countries i mentioned above. For rest of the countries check the below sources that have the complete list of all the countries with their respective govt record pages:
http://www.rba.co.uk/sources/registers.htm (Courtesy: Karen Blakeman)
6. CHECK SITE FOR UNPROFESSIONAL RED FLAGS
A company's website is a reflection of what the company stands for. It can be thought of as the virtual personality of the organization. Hence it goes without saying that a legitimate business understands the importance of it's website because it knows that the customers and employees will form opinions and impressions of the company based on the look/feel and the content of the firm's website. A fraud company on the other hand, other then luring you to get your money has no other business to offer you.
Hence a website that looks rather unprofessionally and hastily put together should be brought under the lens. Look for red flags like: contradictory and inconsistent statements, stolen pictures, buggy features, spelling errors, fake addresses, source-less testimonials etc.
Again, it's worth mentioning that fraudsters are getting smarter by making much more polished websites with much less mistakes that can easily be passed as a genuine company on first glance. So, be careful.
7. CHECK CONTACT INFORMATION
Domain addresses, phone number and emails are easy to obtain and can be easily disposed off. So don't rely on them as a very solid proof for a company's existence. If a company exists, it should have a location. Now, most fraud company websites do mention their location so as not to provoke suspicion but the place is either non-existent or non-specific. So go ahead and cross check the address on google and on google maps. Further if the website mentions about it's various branches, check all of them whether they really exist or not.
8. CHECK TERMS AND CONDITIONS
Every business website, fake or not has a "terms and conditions" page. It is the T&C page that minimizes legal disputes and minimizes chances of the company being taken into court. These terms and conditions enforces the website rules onto you so it's better that if you are doubtful of the company's credibility then you should give a careful read of the terms and conditions of the website.
9. CHECK THEIR PAYMENT METHODS
First of all, for all job seekers this is something every legitimate company says and i will repeat that no company will ask for your money in return for employment. Legitimate companies have their employees sign a bond of 1-2 years of some amount but almost never do they ask a employee for money as a security deposit neither do they ever ask for money in exchange for training or employment. I say this because a lot of fraud companies contact students about a job interview and later demand money from the student in exchange for training and "guaranteed" job.
However even if you are or not a job-seeker and you wish to engage in business with the firm, you should check the method in which the firm is accepts payment. If it is a insecure or shady method of accepting payment then be on your guard since fraud companies are going to be quite specific when it comes to money because they would want a way of accepting money where it cannot be traced back to them.
Another small yet important thing that goes without saying is that do not share your account information on insecure channels. Looking for "https (hyper text transfer protocol secure)" protocol is one of the things that you should look for IF you are sharing account information. It is generally mentioned right next to the URL you are on.
10. GOOGLE NEWS
Another great way to find information about a company is Google News. Although it's not a review site but it gets the job done by allowing you to identify news articles that are relevant to the company you are concerned with. The information includes press releases, financial information, pending litigation etc.
11. RIGHT TO INFORMATION (RTI)
If your country supports the Right to Information Act, then make use of it and through your respective government specified method, file an RTI application asking for information on the company in question.