Luxury goods are a hot target for criminals. Whether it's payment fraud, counterfeiting, or chargeback fraud, criminals know that there is a lot of money to be made in the luxury goods market. That's why it's so important for business owners in this industry to be aware of the different types of fraud that can occur and take steps to prevent it. This is part one of two. In this blog post, we will first identify 3 types of fraud in the luxury goods industry and follow with part two: best practices to protect yourself from fraud on the next blog post.
Payment fraud is a type of financial crime that involves the use of payment instruments to unlawfully obtain money or property. Payment instruments include credit cards, debit cards, cheques, and electronic fund transfers. Payment fraud can be perpetrated by individuals, businesses, or even government agencies. payment fraud is a serious problem that can have devastating consequences for victims. There are many different types of payment fraud, but some of the most common include:
- Credit/Debit card fraud: This is when someone uses a stolen or counterfeit credit card to make unauthorized purchases/withdrawls.
- Chargeback fraud: This can be when someone uses a stolen credit card OR they can even use their own credit card but then make a chargeback with their card company, claiming the watch was fake even if it isn't, or claiming it wasn't shipped, the possibilites are near endless.
- Debit card fraud: This is when someone uses a stolen or counterfeit debit card to make unauthorized withdrawals from a bank account.
- Check fraud: This is when someone uses a forged or altered check.
- Counterfeit Bills: This is when someone produces / prints fake currency, usually printing $100 bills.
There are many types of product fraud, but counterfeit watches are one of the most common. The best ways to identify a fake Rolex without taking into consideration who you are acquireing it from, why they are selling it and who they got it from are with practice by handling genuine Rolex timepieces regulary. The fake superclone watches are usually made with inferior materials and/or workmanship. The "best" fakes are often made with some of the same high quality materials but they just don't match the workmanship of a genuine Rolex. Some of the most obvious and easily detectible indentifiers of the higher quality counterfeits are:
- Sound of the Movement- a counterfeit watch will usually have a louder ticking noise than a genuine Rolex you can often hear the movement rotating inside also. On the most obvious fakes, the hands tic, whereas a genuine has a sweeping smooth movement.
- Dial and Hands- One of the most difficult things for counterfeiters to replicate is the dial and hands of a Rolex. If you loupe the hands of a counterfeit Rolex, they will often have excess uneven metal roughage around the edges, almost like the tiny bit of excess just under the fingernail or toenail that the nail shop missed on your manicure or pedicure. It's hardly noticeable without a loupe and a genuine next to it to compare it to, but once recognized, you never forget it.
- Weight- the cheaper counterfeit watches are often made with cheaper materials so they willl be lighter than an authentic Rolex; however the superclones still weigh heavy, but require more expertise to identify because the weight will sit heavier in different areas of the watch. This is why the most experienced watch traders are able to identify a fake with their eyes closed.
- Buckle and Bracelet- the counterfeiters have gotten quite good at replicating Rolex's over the years, but there are some things they just can't seem to get right. The easiest way to tell on a counterfeit watch is usually going to be on the bracelet or clasp. The counterfeiters will not assemble the flip lock clasp perfectly like the Rolex factory does. When comparing with a genuine, the opening and closing of the clasp is smooth like butter; but if you do the same with a counterfit immediately following a genuine, you will notice that the clasp creates more friction in places it maybe shouldn't, like you might think it needs WD40. Another way to describe it would be less than perfect carpentry work in installing a door, maybe the door doesnt fit in the jam perfectly and rubs in one spot just slightly off.
There are many different types of shipping fraud, and unfortunately, Fedex, UPS and other shipping carriers are not immune to facilitating this problem. Here are some of the most common types of shipping fraud:
- Address Fraud: Oftentimes theives use stolen credit cards with verified addresses, wait outside until they see the Fedex truck, then pretend they live there and sign for the package.
- Freight Forwarding Fraud: This type of fraud occurs when the sender uses a freight forwarding service to ship their goods, but then never pays the freight forwarder for their services. The freight forwarder is then left with the bill. OR they use the obscure address so they can never be found after.
- Customs Fraud: This type of fraud occurs when the sender falsifies the customs information on their shipment in order to avoid paying duties.
Luxury items are a popular target for thieves. Criminals understand that there is a lot of money to be made in the luxury goods market, whether it's payment fraud, counterfeit sales, or chargeback fraud. As a result, business owners in this sector must be aware of the many types of fraud that may occur and take measures to avoid them.