Fraud Protection and Awareness

Fraud Prevention
28 Jul 2023

This article is being republished with permission from AgDirect®. It was originally published 7/7/2023.

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 Kara Figi, vice president of AgDirect business development, fraud is becoming more prevalent in the agricultural equipment space with scammers targeting both dealers and producers.

“Before COVID, our customer base didn’t buy a lot of equipment online. They always wanted to kick the tires before they purchased something, but now everyone has become a lot more comfortable with online transactions,” she says.

“Between that and limited availability of equipment, buyers are willing to purchase from sellers multiple states away when they can’t find the machinery they need locally, and the bad actors have capitalized on that trend.”


Watch out for fake dealer sites

One of the ways today’s buyers must remain vigilant with their equipment purchases is avoiding fake dealer websites. Scammers will impersonate dealers, sometimes posing as former legitimate businesses, to trick buyers into believing the fraudulent site is reputable.

The original website domain may be confiscated to make it seem trustworthy, or in other cases, machinery listings may be lifted from other sites. The site may also feature pictures of a real dealership or equipment from an existing lot.

When dealing with fake dealerships, phone calls are often forwarded to a voicemail where the scammer can monitor calls. The bad actors call back potential buyers, gain their confidence and convince them to go through with the transaction. At the same time, this allows the scammers to avoid taking a call from someone they have already scammed into wiring funds for an asset that will never be delivered.

“Dealer scams are not happening locally because buyers expect to see the equipment and meet the salesman as part of the sales process,” says Figi. “With tight inventories, many buyers are willing to look five or six states away for the equipment they need and wire money to get the deal done.”

“Often it is several days later, when the equipment doesn’t show up and the dealer no longer returns their phone calls, before the buyer realizes they have been scammed and their money is gone.”

Thanks to new digital content authenticity technology, AgDirect is now able to assist customers with verifying machinery listings by using an application that detects whether a photo of the equipment is real or if it has been manipulated in any way.

Figi says the software has already helped prevent four fraudulent transactions from taking place and that the tool will continue to give buyers confidence as more and more sales are conducted online.


Keep your data and identify safe

Identity theft is another area posing a threat to dealers and unsuspecting fraud victims. In 2022, the Federal Trade Commission reported consumers lost nearly $8.8 billion to fraud – an increase of more than 30% from the previous year.

In the agricultural equipment and financing space, scammers are using stolen identities and information to collect funds dispersed for approved machinery purchases. The used equipment sector is especially vulnerable, but if the logistics or location of the deal don’t add up – for instance, a California buyer looking to make an equipment purchase in New Jersey, that could be a red flag.

Data security is of the utmost importance at AgDirect. That’s why as an equipment financing leader, AgDirect is continuing to implement new fraud protection tools including identify verification software.

“For every customer who submits an application with us online, they will automatically be sent a link that allows them to capture a photo of their driver’s license as well as a selfie image,” shares Figi. “Within a few seconds, the system will scan the images and tell us if they are a match.”


Tips to protect yourself and your operation

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 seller’s email accounts and is waiting for an opportunity to interject new wiring instructions at the last minute.

Unfortunately, scammers know how to take advantage of a situation and feed on the emotion involved with making a big machinery purchase. It can be easy to get caught up in 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,” Figi adds. “We’ve seen fraud come and go, but it spikes from time to time so it’s always a good idea to use caution when purchasing equipment online.”  

Here are some of the steps you can take to protect you and your operation against online equipment scams:

Ask Questions
•  How confident are you in the seller?
•  Have you worked with the seller before?
•  Have you met the seller in person or seen the equipment in person?
•  Is the seller pushing you to act quickly and wire money?

•  Google the seller by name and keep an eye out for any reports of recent scams in your search results.
•  Reference the Better Business Bureau to verify it is a recognized business entity and that the company hasn’t been compromised.
•  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.
•  Insist on seeing the equipment. Request a video call to view the equipment when shopping from a distance.

Consult with Others
•  Read online comments from other buyers or reach out to other known buyers who have made a purchase with the seller before.
•  Research the seller and products independently and compare prices with other websites to ensure legitimacy.
•  Leverage the knowledge and relationships of your nearest AgDirect territory manager or other dealers in the area to determine whether the equipment is coming from a reputable seller.

Other Best Practices
•  Never transfer money to someone you don’t know. A demand for wired funds can be a red flag as scammers often don’t have a way to cash checks.
•  Safely store documents that have your personal information, including financial documents.
•  Contact your credit bureau to lock or freeze your credit to prevent unauthorized access to your credit reports.

In addition to maintaining high security standards, AgDirect uses technology and countermeasures to help identify and prevent fraud so you can buy equipment more confidently knowing additional steps have been taken to protect you.

The Federal Trade Commission and Federal Bureau of Investigation offer additional tips and resources for avoiding and reporting cyber scams and other fraudulent activity.


Find additional tips from AgDirect® by clicking here