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Glenlyon

Distillery specific scam alert...

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Although, I hate to admit this - we were recently the victims of a scam. It was very well done, so be aware. Here is what to look for...

Email query comes in asking as to the cost of your product. Just like any number of other requests. 

You go back and forth politely and after some discussion the client decides to buy a slightly larger order. Not huge, but big enough that you have to have to think about shipping. Say 10 cases of vodka. Good sale, you're enthused and so far, the discussions have been very normal and straight forward. You work out the cost of the booze and figure out the shipping. So far so good. You tell the client the costs, they are happy to pay. All's well so far.

You send the client an invoice and they pay via credit card. Cool, you're happy, you've been paid. Then the scammer phones and expresses concern about the shipping company finding their location because its hard to find. They suggest an alternative shipping company who has done business with them before. OK. Sure.

But, here's the scam - the new shipping wants to be paid up front before they will schedule a delivery date. The scammer phones back - now they need the product right away. Well, seeing as you've already been paid, you pay the shipping costs as requested. Then - the scammer strikes - they cancel the order through the credit card company! Wait a minute, weren't you already paid? Actually, it turns out you were never paid because of the way the credit card system works. There is lag time between when the CC company says they got the payment vs when the payment was registered. Therefore, there is a period of time where neither party has the cash and that what the fucking scammers are playing on.

Now that you know of the existence of the scam, keep an eye open. Although they probably change their names, watch out for Bernard, Hitoshi or James as client email inquiry names.

Cheers, All.

 

 

 

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Thanks. Good to know.

Personally, I never take credit cards. If it's a legit business they will have other forms of payment. Credit cards take a fee and we're not a retail store, aside from the tasting room of course. Plus, as said above CC charges can be reversed.

Second, if it's a new customer I wait until the payment completely clears. That might mean a month of more if it's some weird foreign bank. If the customer is concerned, they can make a wire transfer from their bank to mine. No harm in that and once money is sent via a real wire transfer, not western union which most scammers use, it's your money it can't be recalled. And never take money orders or cashiers checks because they can be fake too. I mean you can take them, but make sure they clear as well. And to reiterate if it's a weird foreign bank and a money order it WILL take like 2 months to clear. Money orders might be accepted by your bank and some people think a money order is as good as cash, but they're not. What they are is a check just like any other check, but a check drawn from the bank itself, instead of the individual drawing it from their own account which could be fake or they could have no money in it by the time the bank goes to cash it.

Also, I almost never arrange shipping. Most distributors are happy to arrange shipping. Maybe it's not always this way, but I've been lucky as working out alcohol shipping can be a PITA. But as stated above don't prepay anything unless you know the company.

 

Now having said that I have taken a half payment from a distributor before that was new to me. What I did was do my research make sure they seem legit, they happen to be in the Grand Caymans, and take a half payment of the first large order which more than covered the production cost of the product.I took half payment not because I thought it was a scam, but just because they are a legit distributor they're not SGWS and therefore they still might not pay if they run out of money or don't sell the entire stock of product they bought from you. It happens. Distributors get in way over their heads sometimes like any other business or are living pay check to pay check and you're the one who doesn't get paid. And being on foreign soil it would be very hard to collect.

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They are getting very creative and are the scum of the earth.

I got a call last Friday saying it was PG&E and my power to the distillery was going to be cut off in 30 min. I said, let me guess you need a credit card. He said NO! He had NO IDEA why the disconnect order was issued, but I should call another number and find out. Of course I'm sure they would have asked for one. I knew it was a scam a few seconds into the call, but at first I was like WHAT!!! we've opening the tasting room soon we need power. So they are getting very creative.

For PG&E though it's pretty easy to spot the fake. One, a disconnect technician would never call unless he needs access to the building. Two, you'd have to be like 8 months late on payments, and three it's illegal for PG&E to disconnect power for any reason with out some kind of legal document for businesses. Residences are different. At least that's what I've been told.

So I have a fairly young lady working my tasting room and this scam made me realize I had to have a talk with her. Now she knew better, but I wanted to let her know. Unless I tell her someone is coming by, insert specific reason, no one is allowed in the distillery proper. I told her if someone shows up and says they're so and so and have to get in to check something, insert Comcast - PG&E - Etc.., do not let them in. Call me. If I'm not available tell them they can't enter. If they give her a hard time I told her call the police. You will never get in trouble if you call the police for legitimate reason.

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Glen Lyon,

This is a common scam that is perpetrated across all industries where things are sold and shipped.  It is not distillery specific.  They first tried it on us a couple of years ago and they have tried it many times since. Sometimes they do the shipping scam, sometimes they want the goods.  The first time they tried it, as soon as they came back with needing it shipped right away, I became suspicious.  I checked the customer's billing and shipping address and they were different.  The ship to address was in South America and the billing address was in Ohio.  The name on the card was a WASP name but the customer had a strong Hispanic accent.  I have a way to get contact info and other details for people who's name and address or name and phone number that I know, so I used the name and address to get a phone number.  Once I had the phone number I called the card holder.  They did not know what I was talking about, they had not ordered and they did not know that their card had been compromised.  Then I emailed the guy in South America and had him call me and I screwed with him for days.  I talked to him like a dog and kept jacking him around about his order and he kept begging me to ship and in the end I told him I knew he was a thief and I gave him a good cussing.  I had a lot of fun with that idiot.  There was another from Africa that tried the same scam and I had fun screwing with him as well.

There are lots of other scams and people fall for them every day.  Here is one that is very hard to detect and they got Hillbilly stills with it a couple of years ago.  You get an email from one of your suppliers telling you that they have new wiring instructions for the next payment.  You send the next payment to the suppliers new account then your supplier emails and says I did not get my payment and you say: I sent it to your new account and they say what new account?  You know at that point you have been robbed.  You go back and look at the email about changing the wiring instructions.  It may have one letter different in the email address, or maybe it is the suppliers email and their email was hacked.  Either way as soon as your money hit the thief's account it was transferred to another and then another account and your money is gone. You can't even call and report it to the FBI.  They don't allow that. You report it to the FBI online and maybe they will get back to you in a month and tell you that they can't really do anything.

If you own a business, these theft attempts will happen time after time.  

Here are some things that you can do:

Don't click on any links in emails. 

Don't open email attachments unless you know what they are.

Never ship anything to anyone who has a different shipping address than the billing address unless you talk to the actual card holder and verify.

If your supplier wants to change payment instructions in an email, call them at the number that you have for them and verify it that they want the changes.

Always keep your antivirus up to date. 

Always keep back ups of everything on a hard rive that no one can access, that way if they hit you with a ransom ware scam you can laugh and tell them to kiss your ass, or screw with their lives for a few days.  Most people would not retaliate against these people the way I do  and that is probably the right approach but I can't help it.  It really pisses me off when someone tries to steal from me and I am a vengeful person who will retaliate in any way possible within the law.  I don't want an eye for an eye I want 10 eyes for mine.

Here is the best piece of advice I can give.  If your email is hacked they can have their way with you very easily many different ways.  There are many different ways that email  passwords can be hacked but here is the deal.  If you access your email with a physical key that must be slid into a card reader, they can't hack you because there is no password, the physical key is the password.  In my office these keys are used instead of passwords for everything important that it is possible to use them with.

Also if you can afford it, get a security audit done of your network and all aspects of your computer system.

 

I am sorry to hear you were robbed.  Good luck in the future.

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If you get one of these emails, one easy test is to respond by asking that they send copies of their licenses. Scammers posing as distributors tend to stop responding when you ask that question.

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Hi Paul,

Thanks for your post.

I've run several successful businesses over the last thirty years and I've never been scammed before. So, I blame being overworked and not paying attention - my own fault.

However, these things can have a ripple effect. For example, we were on the cusp of opening talks with you about building us a new Ultra pro whiskey still/mash tun but, now those plans are on hold. Sigh, maybe next year.

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Thank you for posting this. I'm sorry you got wrapped up in this scam but hopefully your experience will help others avoid something similar. 

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As an American living and doing business overseas I get a lot of hassle on the FLIPSIDE of these problems!  Seems like I can’t pay half the vendors I want to buy from and the rest are super cautious. 

 

My primary method of transferring erring funds is wire transfer. Lots of businesses are unfamiliar with this and get kinda freaked out providing me with their account info (it’s 100% normal in the rest of the world BTW). This leaves credit cards. These are incredibly difficult to get a visa/mc based card in Fiji and actually requires owning real estate or providing a deposit equivalent to credit limit. Once you get one issued the headache really begins!  Daily calls for authorization to spend etc. 

 

the worst is I can’t spend in most USA vendors unless they force it thru manually because we have no zip codes in Fiji. 

 

So from my end end it’s very difficult to do business with people who have little experience with overseas transactions. 

 

My advice?  Don’t be afraid of a wire transfer and just wait for the funds to hit. That’s normal and very very low risk to you. The sender assumes all risk actually. 

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Glenlyon,

 

Don't feel bad, it can happen to anyone.  Cities and big corporations have been scammed that have a lot smarter people than us working for them.  They got me on a different scam for $130,000.00  I never got a penny back.  I had a hard time dealing with it for a few days.  I felt depressed etc but I used it as a very expensive lesson and tightened up security so that it shouldn't happen again.  Whenever you need a still we are here for you and I will give you a discount for being a return customer.

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