Beware of fraudulent hires
SPOA Associate member, JCB Insurance has put together some advice to help you stay vigilant to fraudulent hires - something which is becoming more and more common.
What is a fraudulent hire?
The usual circumstances generally involve an individual, posing as a genuine hirer, who then proceeds to steal the item. In reality, there can be much more complicated circumstances involving organised criminal gangs and fraudulent documents. They can be very clever and hard to spot so everyone in your business needs to be vigilant.
What happens to stolen items?
These items are usually stripped for parts or sent abroad in containers. Where this involves gangs, it has been known for items to be out of the country on the same day. In many instances, the owner doesn’t even realise the plant has been stolen at this point so the machine can be moved freely around the country and through the ports without detection.
Would the fraudulent hirer’s insurance pay?
Insurance companies will not pay out for intentional illegal acts and even if they could, you can’t make a claim on someone else’s policy, so you would have to rely on your insurance policy to pay the claim.
What does my insurance say?
Most insurers will specify what precautions they require you to take, if these are not followed to the letter then you may find that your insurer does not pay your claim.
As a specialist insurance broker for the plant hire industry, JCB Insurance informs all of its customers of the insurer’s conditions.
What precautions can I take before hiring an item out?
As a minimum you should be following the requirements set out by your insurer. However, to make your business as watertight as possible, the more precautions you can take the better, as any claim will be unwelcome.
For new accounts and cash hires:
- Take photo ID, bank statements and utility bills to verify their identity and address.
- Conduct an internet search of their name, phone number and email.
- Use credit checking software and Companies House to provide further identity verification.
- For hires to members of the public, only deliver plant to their home address.
- Request written trade references from other suppliers such as builders’ merchants.
- Take written copies of their insurance and contact their insurance broker to confirm the validity of the insurance.
- If possible, get a purchase order from the company’s head office.
- Consider calling the head office yourself to check the person in front of you is genuine. Also, to make sure they are legitimate, try and find the phone number yourself online rather than rely on a number the hirer might give you because that could be a fake too.
For existing accounts:
- Check the email address or phone number that has made the order against your records or their website.
- Request a written purchase order and make sure this matches the format of previous purchase orders.
- Make further enquiries if you receive a purchase from a new employee of your customers.
- Ensure an annual check of their insurance when it falls due for renewal.
For all hires, you should put in place a written contract that incorporates the SPOA conditions of hire - and the contract should be signed by the customer. A helpful presentation of how to do this can be found here.
Be sure to use the correct terms for the situation, SPOA Business to Business & Business to Consumer conditions of hire can be found in the resources section of the members platform here.
Hire desk staff should follow their instinct and in suspicious circumstances should refer to the hire desk manager. Your drivers should be suspicious if they are expecting to deliver to a site and no one is present.
What other measures can I take?
- Ensure items are collected as soon as possible at the end of the hire period, the customer will soon have no responsibility for the machine and may not care about securing it.
- Consider the use of trackers on all equipment and set up geo-fencing on those items .
- Make sure your equipment is CESAR registered and marked.
- Take point of hire photographs of both the item and also the individual signing for it.
- Do you have CCTV at the hire counter and do you back it up??
What should I do if I uncover a fraudulent hirer?
You should report this to the Police without delay. Please also contact us at the SPOA so details can be circulated among members so others don’t get caught out too.
Recent claim example:
A client of JCB insurance fell victim to a fraudulent hire but had satisfied the insurance policy conditions.
- The perpetrator stole a proof of ID from a vulnerable individual and used his details for the hire, he was also a victim of identity theft and the police were involved.
- The client also received a copy of his hired in plant insurance from a reputable insurer which all appeared legitimate.
- The item was collected by the fraudulent hirer using their own transport and the hire desk staff did not check the photo ID that was emailed in against the person collecting the item.
- The claim for both the theft of the item and also cover for hiring in a replacement machine was paid out minus the excess.
Should you wish to discuss your business insurance requirements, then please call JCB Insurance free on 0800 141 2877 or email firstname.lastname@example.org.
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