WorldWide Drilling Resource

20 MARCH 2019 WorldWide Drilling Resource ® Hole Products Urges Companies to be Safe Adapted from Information by Hole Products Hole Products is a fast-growing company with many moving parts. Being a manufacturer, supplier, drilling rental facility, and consultant for practically any drilling application, there simply isn’t enough time in the day. Having over nine North American locations, it is easy for the drilling experts at Hole Products to miss something when it comes to accounting, fraud, or tasks that don’t necessarily benefit the customers directly. Like most companies, Hole Products has always dealt with the threat of fraud, from bounced checks to fraudulent credit cards, not to mention the new e-mail trend involving the President, CEO, etc. sending an e-mail asking one of their workers to buy gift cards for a client, requesting the gift cards to be scratched off and a copy e-mailed back. The gift cards are then used. Later, it’s discovered the e-mail was not from the boss. These e-mails come from an account looking like the boss, but there is always something a little off. Either the e-mail ends different from company e-mails, or the boss is in a rush and cannot talk on the phone, so don’t call, just hurry and buy those gift cards fast! The most recent event, is not the first time Hole Products has encountered fraud, and it certainly will not be the last. Each experience has made the team more aware of signs and signals which indicate they may be dealing with fraud. The company has stopped thousands of dollars of fraud in the past and has probably absorbed just as much in losses. Stopping an order from being released, placing orders on hold, or putting a stop on a delivery truck because a check bounced will not match the excitement of the most recent fraud attempt on Hole Products. Earlier this year, the Arizona location received a phone call from someone wanting to purchase more than $6000 of product. Generally, one would be excited and a credit card number would be taken over the phone. However, the Arizona staff imme- diately suspected something was off. For starters, the individual wanted a very odd size of a specific product. Okay, not that weird yet, especially for a company doing thousands of custom jobs for countless customers a year. The second red flag was the call-center-like noises in the background, not that offices cannot make noises. The caller gave us their credit card informa- tion, including the card number, security code, and the expiration date, good start. However, they were unable to give an accu- rate billing address, or a billing address at all. Reluctantly, the Arizona office hung up the phone with the information. Now it was time to source a few of the awkward sized tooling, the company called another drilling supplier. Not only did this supplier get the same request, they were scammed out of about $10,000. We soon discovered another local supplier in the area also got stuck with $10,000 in losses. Same name, same card, same story, someone would be there to pick up the product, please run the card. The card runs, the transaction goes through, and the scammers leave with premium drilling prod- ucts worth thousands of dollars for free, using a stolen card. As a respectful competitor of Hole Products, they informed us of their experience, and we took action. On the other side, the Hole Products accounting team was busy processing orders, managing invoices, and running credit cards. With a strict policy to not process cards without a billing address on file, there was skepticism on the accounting depart- ments end as well. They ran the card and it came back declined, do not honor, which hap- pens. The team took the next step and called the bank, which said the card was on hold because of suspicious activity, another red flag. Once both teams confirmed their suspi- cions and found out it was the same card used in the other scams, they knew they had to take action. They contacted the local authorities, who came out to the facility with a plan to wait in the warehouse until the unsuspecting scammers came to pick up the product. Hole Products informed the individual the card passed through our system and the product was ready to be picked up. After a short wait, the individual arrived to get the product, and he was cuffed by the police! Talk about an exciting way to start your week! Unfortunately, the individual apprehended was nothing more than a middle man. He had no idea he was picking up stolen products and was simply a delivery boy. With suspicions this was just a small part of a much bigger criminal organization, the police are hard at work in Arizona tracking e-mails, phone calls, and questioning suspects and victims to get to the source of the scams going around. As the company moves forward, we want to stress the importance of being diligent. Here are a few things you can do as a company to limit your risks of being a victim of fraud: • Verify credit card information. • Be wary of new customers in a hurry expecting you to rush everything. • Take a few minutes and use the most powerful information tool on the planet, Google, and look up potential clients. Are they real? Do addresses match? Does the individual work there? In our case the scammers provided us with the company name “Supply Contractors Plus.” After a quick Google search, there was no company by that name in the area. There was, however, a Contractors Supply Plus. With some fancy word play, they try to fool you into thinking they simply messed up the name. • E-mails: be wary of e-mails which are not company e-mails. Most large companies wanting large amounts of product will have the money to purchase a company e-mail and not have a Gmail account. This doesn’t mean people don’t use personal e-mails for business, but it’s something to look for. It’s easy to let things slide and overlook obvious signs of fraudulent activity. We hope sharing our experience will prevent other companies from becoming a victim of fraudulent activities. WTR