FRAUD

Fraud is not just someone else's problem. All Members of ITIC should be aware that they are exposed to claims for fraud. The transport industry is especially vulnerable to fraudulent activity. It is an international business, cargo can be of high value, large sums are involved with chartering ships, and the industry is still dependant on documents such as bills of lading, charter parties and survey reports. In this edition of the claims review, ITIC recounts the experience of its Members as the victims of fraud, both from outside sources and, unfortunately, from within, and when employees have colluded with outside sources. The claims review ends with some simple suggestions as to how transport industry professionals can try to limit their exposure to fraud, from whatever direction it may come.

Claims Review 10

31/07/2001
The chief engineer of a ship was airlifted to a hospital in the Arabian Gulf suffering from appendicitis. The ship manager had to replace him before the ship could sail. A chief engineer with impeccable references and...

31/07/2001
A ship agent in the Middle East released 31 containers against receipt of NVOC bills of lading after receiving a telex from the loadport agent informing him that freight had been collected and the Line's bills of lading were in...

31/07/2001
For a number of months a ship broker made hire payments under a time charter directly to the owner, although the broker had previously dealt with the ship's manager. When the broker received an instruction from the manager to pay...

31/07/2001
A ship agent who threatened to detain a ship because the owner had not remitted disbursements, allowed the ship to sail when he received a telex confirmation from a well known UK bank that the disbursements had been remitted. The...

31/07/2001
An Irish ship agent was asked by a crewing agent to look after the transfer of 8 crew from Dublin to London, where they would join a ship. This unusual request aroused the agent's suspicions and he contacted ITIC. Investigations...

31/07/2001
An African ship agent released four containers without production of original bills of lading in exchange for four letters of indemnity apparently counter-signed by a local bank. Subsequent checks with the bank in question...

31/07/2001
A UK ship agent inadvertently delivered a container of brand name batteries without taking the original bill of lading in exchange. After two weeks of constant pressure from the ship agent to provide the original bill of lading,...

31/07/2001
A Scandinavian ship agent was requested by a ship owner to issue bills of lading for a cargo of new steel coils of Turkish origin which were loaded in Turkey in November 1987. The cargo was in fact rusted straight bars of...

31/07/2001
A ship broker received a telephone call from his usual contact at a Far Eastern bank, expressing surprise at the high level of values the ship broker had placed on two ships. The broker asked for a copy of the valuations, which...

31/07/2001
A sale and purchase broker had acted for the Scandinavian sellers of a small cruise ship. An Australian company had signed a Memorandum of Agreement but had failed to pay the deposit or take any other steps to complete the...

31/07/2001
Members may come under pressure to collude in a fraud, particularly by issuing bills of lading which contain incorrect information, often to comply with the terms of a Letter of Credit. We mean the deliberate misdating, or...

31/07/2001
Three containers of electrical goods worth US$380,000 were shipped from the Far East to South Africa, and from there by rail to another African country. The agent at the discharge port released all three containers to the same...

31/07/2001
An employee of 20 years standing used the customs bond of a Belgian ship agent to smuggle consignments of T-shirts of Chinese origin into the European Union. The T-shirts, which had arrived in Belgium from China, were incorrectly...

31/07/2001
During a routine external audit, a South American ship agent discovered that part of the freights collected from shippers on behalf of a principal had not been deposited in the agent's bank account. Subsequent investigations...

31/07/2001
Fraud, and particularly documentary fraud, is becoming increasingly sophisticated and even with the best systems in the world may not be detected. However, most of ITIC's Members are agents (in one form or another) whose duty is...

31/07/2001
Staffgive staff proper training. give staff adequate remuneration. provide sufficient staff - overworked staff are less observant. check references for new staff. check that...

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