Avoid being a victim of con artists.

High metal prices, digital technology, and a lack of vigilence on the part of scrap dealers have contributed to an increasing proliferation of internet and phone scams targeting metal suppliers.

Add to that a conviction rate hovering around 1%, and you can see we have a serious threat to our industry.

The cons fall into two basic categories: mail forwarding and false shipment addresses.

Mail Forwarding

The con artist will make a purchase from you using false-payment methods (stolen credit cards, fake cashier checks, stolen credit sheets from a legitimate company, etc). The ship to address will be an actual physical address (not a PO Box). If they are pretending to be a legitimate company they will claim that this address is a branch office, receiving facility, or laboratory.

The address almost always belongs to an innocent person or small company duped into the illegal activity. In one example we uncovered, the company at the ship to address had done business with the buyer/con artist in the past. Perhaps they had made a small purchase, or an inquiry. The con artist relies on that person recognizing their "name" and contacting them directly, rather than contacting the company the material was shipped from.

The con artist then claims to have made a paperwork error and requests that the shipment be forwarded to them at a different address. Sometimes they'll offer the person compensation for their time and costs. Once the person forwards the package, they become a part of an illegal enterprise and often are afraid to report it.

False Shipment Addresses

This is not a typical drop shipment scam (where people sell you lists of fake drop shippers of wholesale products), but instead operates much like the mail forwarding scheme. Instead of duping a third party into forwarding the shipment on, the con artists use actual physical addresses and make their pick-ups from there. This could be a warehouse or an office with a loading dock that they've rented, or just one that they have an "inside man" located, or even just an empty warehouse that they have under surveillance. Either way, when the legitimate company they are posing as rejects payment the material itself is long gone.

How to Protect Yourself:

These schemes rely heavily on the internet, pre-paid cell phones, and VOIP (internet phone). You need to educate all your employees on these tools, how con artists use them, and how we can also use them to help differentiate scams from legitimate business.

Beware of:

Large or expensive orders from unknown customers.

Watch out for orders for high price to weight ratios, such as titanium, nickel alloys, beryllium copper, gold, platinum, and refractory metals.

Email addresses using free e-mail services.

These are untraceable. Everything after the "@" symbol is what you need to concentrate on. Watch out for "@yahoo.com", "@gmail.com", "@hotmail.com", "@netscape.com" etc, etc, etc. A legitimate email address will almost always match the companies website. For example, all our email addresses will end in "@m-vincent.com".

If you have any question, just copy everything after the "@" sign and paste it into Google. You'll get the information you need.

Recently registered internet domain names

A scammer can appear to be legitimate by registering a domain name, putting up a website, and emailing you from that domain. This can all be done with less than an hours worth of work on their part, and anyone in the world can do it and appear to be anyone they want.

There are some tools we can use to suss out these companies.

• Whois: We use Network Solutions Whois to find out creation dates and the domain register's addresses. Beware domains that were registered recently and have "cookie cutter" looking websites.

Whois Record: What to look for

• Google Earth: You can download and install Google Earth for free. Type in the address of the company, or the ship to address, and Google earth will take you there within a city block or so. Zooming into the satellite image can show you if the address looks like industrial usage, office space, or a residential home.
• Google: Just doing a simple Google search on the domain name can give you important information.

Prepaid cell phones and VOIP

VOIP services like Skype have made a great contribution to business, but have also opened the door to scammers. With a Skype-in account a person can appear to be located in any major city in the world, complete with local area code. A con artist can have up to five telephone numbers in different cities around the world, all leading to the same voice mail.

A red flag should go up if you can never get a hold of the person directly, but instead are always sent to voice mail, or you can hear the phone rolling over to another number before they pick up.

First thing to do, always, is simply enter the telephone number into Google. (should be in 555-555-5555 format). For a legitimate company this will lead you to many listings. You can find out more from these.

It never hurts to call the companies headquarters or branch offices to confirm locations and buyers names. Get these numbers from their website or from phone directories, not from RFQ's.

Dial their fax number. If it doesn't lead directly to a fax machine, but instead is forwarded to a different sounding ring tone before being forwarded to fax, you know that it's not a legitimate office line.

Don't be afraid to directly ask for a telephone number that can be traced to a physical address. If the person can't give you one, start asking questions.

If you should be approached by con artists, do not hesitate to inform the FBI. These scams are rarely contained within one state, so fall under the FBI's jurisdiction.

If you would like to share your experiences regarding scammers in the metal industry, please email This e-mail address is being protected from spam bots, you need JavaScript enabled to view it , and we'll share your knowledge with others.

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