A ship was coming off hire from a previous charterer who, under that charter, was also responsible for returning the ship with a set quantity of bunkers. The returning charterer put the broker in contact with their usual shipbroker in China as it made sense for that supplier to provide all of the bunkers (part funded by the first charterer, and part by the owner).
The broker began to communicate with the bunker supplier to make the necessary arrangements. The bunker supplier sent the broker an invoice for US$ 300,000 in respect of the owner’s share of the bunker costs.
The following day, the broker received a subsequent e-mail purporting to be from the bunker supplier advising that their bank details had changed. They attached a new invoice for US$ 300,000 containing the changed details. The broker failed to notice that a rogue “r” had been inserted into the sender’s email address and that the telephone numbers in the e-mail signature had changed. They were now dealing with a criminal party.
Anticipating that the broker may have procedures which required new bank details to be verified by phone, the criminal “bunker supplier” called the broker themselves and read back the bank details, which the broker believed to be genuine.
The broker passed the fake invoice to the owner, who paid it. The genuine bunker supplier then queried why they had not received payment, and the fraud was discovered. The owner brought a claim for US$ 300,000 against the broker on the basis that it had been the broker’s role to verify the bunker supplier’s bank details, and in failing to do so they had been negligent.
It was noted that the owner had been given the opportunity to see that the e-mail address of the party sending the fake invoice had changed, but they, like the broker, did not notice. Furthermore, they were being asked to pay to a bank account, the name of which bore no resemblance to the name of the bunker supplier. Seemingly, they had undertaken no checks at all to verify the bank details themselves. However, it was also clear that – particularly having taken on the obligation to verify the bank details the broker had failed in their duty to do so and this negligence had ultimately caused the owner’s loss, albeit the owner had contributed to their own loss. After some negotiation, the claim was settled with the owner for US$ 150,000.
This claim illustrates the importance in using publicly available phone numbers (e.g. from a website) to contact a party requesting payment and not to rely on either (a) the party contacting you or (b) the number provided on the “fake” invoice/e-mail. Also, further enquiries should be made if the bank account name provided bears little or no resemblance to the name of the supplier. Although not the case here, you should also be concerned if the bank is in an unrelated country to the supplier. These are “red flags” which should alert brokers, agents and managers to potential criminal activity.
For more advice on the topic of fraud, listen to the ITIC Insight podcast episode entitled “the phone is a key weapon to fight fraud”: https://www.itic-insure.com/knowledge/podcasts