There’s no doubt the digital transformation of the agricultural equipment industry has been a game changer for manufacturers, dealers and producers alike.
Online equipment sales are on the rise, but just as the e-commerce landscape has expanded and become more sophisticated, so have cyber scammers.
According to Cybersecurity Ventures, the world’s leading researcher and publisher covering the global cyber economy, global cybercrime costs are expected to grow by 15% over the next five years.
“Fraud is becoming more prevalent across every industry, and while these cases aren’t new in the agricultural equipment space, fraud is ever-evolving,” says Kathy Christiansen, vice president of credit service and support with AgDirect.
“Historically, equipment buyers and sellers have preferred in-person deals to online transactions, but in today’s digital day and age it’s critical to protect your personal and financial information and stay aware of potential risks that may cause you or your business harm.”
What to watch for
Identify theft, counterfeit checks and fake dealers are some of the common ways fraud is occurring in the ag equipment industry today.
For example, a scammer may pose as a buyer and use stolen information to make a machinery purchase.
“In cases of stolen identity, it’s important to verify the purchaser and ensure you know who you’re doing business with,” says Mike Spence, an AgDirect litigation officer. “We typically see fraud taking place in the used equipment sector, but if the logistics or location of the deal don’t pencil out – for instance, a California buyer looking to make an equipment purchase in New Jersey – that could be a red flag.”
Another area of caution includes the use of counterfeit checks. However, with increased financial controls across the lending industry this potential threat is becoming less of an issue.
Fake dealer websites pose yet another major problem for producers on the market for machinery as well as dealers with a legitimate online presence.
In such cases the website may be set up with listings of tractors and other heavy machinery lifted from other sites or pictures of a nice-looking dealership pulled from an actual lot.
“Usually when dealing with fake dealerships phone calls go unanswered or are forwarded to a voicemail which can be a sign the calls are being monitored,” says Spence. “Other times a conversation between the buyer and a fake representative builds some confidence in the sale and falsely puts buyers at ease to go through with the transaction.”
Protection and prevention
The promise of low prices or the sale of a rare piece of equipment are two triggers that are often used to target buyers in fraudulent schemes. Both scenarios can cause buyers to fall victim to bait and/or switch tactics:
Bait: A too good to be true ‘for sale’ price can mislead the purchaser to think they are getting a good deal and will be rushed to close the transaction. In reality, there is nothing tangible for sale – just a phony transaction.
Switch: A legitimate transaction is about to occur, and all of a sudden, the wiring instructions change. The bad actor has compromised one of the buyer’s email accounts and is waiting for an opportunity to interject new wiring instructions at the last minute.
“Scammers know how to take advantage of a situation and feed on the emotion involved with making a big machinery purchase,” says Tracie Archer, another litigation officer with AgDirect. “It can be easy to get caught up in the sense of urgency of the moment or feel like you’re missing out on a good deal.”
“If the deal seems too good to be true, then it probably is,” she adds. “Slow down if you’re feeling pressured, and if something doesn’t seem right it’s ok to take a step back and ask more questions.”
Here are some of the steps you can take to protect you and your business against online equipment scams:
• Are you comfortable and confident in the buyer or seller?
• Have you worked with the buyer or seller before?
• Have you worked with the buyer or seller in person? Or have you only interacted with them online?
• Google the seller by name and keep an eye out for any reports of recent scams in your search results.
Consult with Others
• Reference the Better Business Bureau or your Secretary of State website to verify it is a recognized business entity.
• Pull up the address of the seller on Google Earth, or better yet visit the seller in person to confirm a brick-and-mortar location exists.
• Read online comments from other buyers or reach out to other known buyers who have made a purchase with the seller before.
• Leverage the knowledge and relationships of your nearest AgDirect territory manager to determine whether the equipment is coming from a reputable seller.
“Ultimately, it is the responsibility of the buyer to do their due diligence when making an equipment purchase online,” says Christiansen.
“Before you trust a sale, verify the buyer or seller is legit,” she advises. “At the end of the day it’s your equipment and your credit, so don’t be afraid to say no if you have a bad feeling about the deal.”
AgDirect maintains high security standards and uses countermeasures to ensure that all personal and financial data remain confidential.
The Federal Trade Commission and Federal Bureau of Investigation offer additional tips and resources for avoiding and reporting cyber scams and other fraudulent activity.
AgDirect offers competitive rates and terms for both new and used equipment purchases. Check rates, quote payments and compare options with our free AgDirect Mobile application, or learn more about AgDirect equipment financing by locating your nearest AgDirect territory manager or contacting the AgDirect financing team at 888-525-9805.