Scam Flags for the Equipment Leasing Industry

The following list was begun as a response to a NAELB Listserve posting
about spotting possible scams on equipment lease applications.  I shall
add to it periodically.  Fellow lessors and others are encouraged to e-mail
suggestions for inclusions.

The FLAGS are just that, reasons to check further; The SERIOUS FLAGS are virtually always a problem.    

>> Vendor and lessee are from different geographic areas: FLAG

>> Vendor in Nevada, lessee anywhere else: SERIOUS FLAG

>> Rush need for approval: FLAG

>> Rush need for approval without asking rate: SERIOUS FLAG

>> Multiple trade references too good to be true: FLAG

>> Multiple trade references too good to be true and all similar (watch for figures of speech and wording of comments): SERIOUS FLAG

>> Excellent financials or tax returns provided on a small deal without being requested: FLAG

>> Appearance of financial strength, but needs smallest possible advance: SERIOUS FLAG

>> PG in different geographic area than lessee company: SERIOUS FLAG

>> Two "front names" (John Roberts, Tony Williams, etc.) for PG: FLAG *

>> Two "front names" for PG and vendor rep: SERIOUS FLAG (no kidding) *
         * With all due respect to the many honorable folks in that boat.  Actually, the assumption is that they haven't seen a boat since the Mayflower -- but that's another story.  The late Ed Ingram, the wonderful old time leasing guy from Tilden, used to tell a story about being a guest at a hunting club dinner.  (Having attended one myself, I concurred that Jews are rather uncommon at such events.)  From across the room, came a booming voice, "Hey, Ingram, my name is Ingram, too.  Maybe we're related."  Ed instantly responded, "I don't know.  What was your family's name in the old country?"

>> Equipment Incongruities: FLAG
        Ask for an explanation.  The print shop that wants a CNC Router may also have an established sign department.

>> PG information volunteered when it should not be expected:  SERIOUS FLAG 
        We received the actual SSN's of the CEO and CFO of Mattel Toy Company on an application for a $74,000 computer deal.  We notified Mattel's internal security department and the FBI.

>> Referrals from people or businesses you don't know.  FLAG
        Sometimes these are just misunderstandings.  But, often it is a ploy so that you will let your guard down.  ("He said you're the best")

>> General Incongruities: FLAG
        One of the first attempted scams that I fielded was a $50,000 copier-duplicator for a business in a Hasidic community.  I was comfortable with the deal, even throwing in some Yiddish phrases in phone conversations with the friendly applicant. Then I called his first listed trade reference, Tony's Trucking.  "Hullo, Tony's Truckink, vat cud I do for you?"  Within a day we had documented that the bank reference was another phone in the applicant's office.  We notified the New York State Banking commission and the local prosecutor.

>> Last minute change in :ship to:"  SERIOUS FLAG
        Many scams use actual credit information on substantial companies, including the true address.  Then, at the last minute, ask the vendor to ship to a "satellite office."  This is particularly problematic, because it can be attempted with a strong, real applicant and a legitimate vendor.  

>> Application for $49,500, $74,840, or $99,345:  FLAG
        Many bad guys believe that being just under the "app only" limit (or other perceived limitation) makes you stupid.

07/16/01: The following flags were sent in by a highly respected member of the community who chooses to be anonymous here:

>> The vendor is related to the customer:  SERIOUS FLAG
("We always buy from our affiliate/subsidiary/division/brother-in-law"): 

>> The vendor has no fixed addressFLAG  
(very common, but many people overlook this one. It's also common with used equipment).

>> The deal comes from Southern California, Texas, Louisiana or Florida:  FLAG  
Obviously most deals are straight, but I watch deals from these areas more closely. Some of the biggest scams, like Consolidated Allied and Freda Trading, came out of California. 

>> Selected industries, like the rag trade:  FLAG

10/04/01: These two were sent in by one the good guys in the industry.  I have competed with him often. He's  a straight-shooter.

>> When the lessee calls repeatedly and asks, "That you pay the vendor as soon as possible".....for sure a cash washback.

>>>When you get an unsolicited deal from someone you don't know.

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