Helping You Prevent Fraud and Minimise Risk in Construction

Published on 23^rd April 2025

Overview

With fraud on the rise across the construction industry, taking proactive steps to protect your business is more important than ever. Opening trade credit accounts comes with an inherent level of risk—not just around payment delays or defaults, but the growing issue of fraudulent activity.

At Top Service, we see this risk daily. From false identities and stolen details to completely fabricated companies, the methods fraudsters use are evolving. As the construction sector’s #1 credit reference agency, we believe in sharing insights and supporting our customers in taking smarter, preventative action.

Why Due Diligence is Crucial

When extending credit, you’re essentially investing in someone else’s ability to pay. But if that someone isn’t who they say they are, the risk is far greater.

The issue isn’t just non-payment—it’s the permanent loss of goods, disruption to supply chains, and financial instability that could have been avoided with some simple but effective checks.

Fraudulent activity reported to us recently includes:

• Stolen company identities used to secure goods
• Fake companies with real-looking websites, contact details, and accounts
• Individuals posing as employees of genuine firms to place high-value orders

In every case, there were warning signs that could have prompted further investigation.

Spotting the Warning Signs

Here are a few credibility concerns and inconsistencies you should never ignore:

• Unfamiliar email addresses from genuine-looking companies
• Urgent or unusual order volumes, particularly on a first transaction
• Delivery address mismatches (mailboxes, residential locations, or empty units)
• Communication gaps (e.g. phone numbers that go straight to voicemail or bounce back emails)

How to Protect Your Business

Here are simple, actionable steps you can take:

1. Use a Credit Application Form

Gather essential details:

• Company name and registration number
• Entity type (e.g. Ltd, Sole Trader)
• Key contacts and decision-makers
• Delivery addresses
• Contact phone numbers and emails

2. Verify the Information

Don’t just collect it — check it:

• Use a credit reference agency (like Top Service) to verify the company
• Review director history for patterns like multiple dissolved companies
• Check if others in the industry have flagged the business as a credit risk or potential fraud

3. Pick Up the Phone

If an order seems unusual, call the company directly using details from their official website (not the order form) and confirm:

• That the person works there
• That they have authority to place the order
• That the order itself is legitimate

This one action can stop a fraudulent transaction in its tracks.

4. Be Wary of Delivery Instructions

Avoid orders that request:

• Cross-loading at anonymous locations
• Third-party delivery without verification
• Last-minute delivery changes or pressure

5. Test Your Own Processes

Create an internal test order or use a fake identity to apply for credit. Did the order get through too easily? Use this to assess and strengthen your internal fraud prevention procedures.

What If You Suspect or Fall Victim to Fraud?

• Report it to Action Fraud or by calling 101
• Share it with your trade association and credit reference agency
• Use it to reinforce your future credit policies

Final Thoughts

Fraud can be sophisticated, but so can your defences. Trust your instincts. If something doesn’t feel right, it probably isn’t. We’re here to help you make better-informed decisions that protect your business.

Need help tightening your credit process? Ask an expert today.