BIR Expresses Concern over Fraudulent Deals

BIR Expresses Concern over Fraudulent Deals

Association warns recyclers to be aware of sham companies offering deals on scrap metal.

January 22, 2013
Recycling Today Staff
Legislation & Regulations

The Bureau of International Recycling (BIR) is warning scrap metal recyclers about a scam that has been uncovered where scrap metal recyclers are being offered non-existent cargoes of scrap metal.

According to the BIR, over the past several weeks there have been reports that cargoes of scrap metal have been offered to companies at reduced prices. Further, the BIR notes, these deals were accompanied by documents confirming the quality of the goods being offered.

After verification through the ICC International Maritime Bureau (IMB) BIR says it became apparent that the documents were not authentic: In several cases, the same documents had been presented on multiple occasions with different company names. This suggests that either the same individuals were behind these offers, or that the documents were available in the public domain and ready to be manipulated by fraudulent individuals.

According to the IMB, an analysis of the offers revealed that they were often made in the name of real traders, whose identities were cloned for fraudulent purposes.

The BIR warns that one strategy seemed to be the creation of a new website with a domain name similar to that of the genuine company, featuring contact details but with different telephone numbers. In the meantime the IMB found out that at least one of these numbers was used for multiple companies and that email communications allegedly sent from a UK-based company were actually generated in Nigeria.

IMB also pointed out that if a potential buyer would be sufficiently tempted by these offers and agree to take a sample cargo, he would be provided with a set of shipping documents and a link to an online cargo tracking site to monitor the progress of these cargoes, which were allegedly transported by a well-known carrier. 

Once funds are handed over and the goods are not received there is little the recycler can do to recover the loss. Law enforcement will not get involved unless there is proof that a crime has taken place in their jurisdiction. Furthermore, many of the cases involve funds of less than $100,000, making them a low priority for police.

The BIR has an agreement with IMB to share information on fraud and theft in the recycling industry. BIR urges its member companies that any suspicious documents or fraudulent activity be reported to IMB so that the information can be disseminated to manage risk.