When it comes to supply chain management, there’s a world full of risks you need to consider. These disruptions can range from geopolitical turmoil to natural disasters to technical glitches.
And while outside factors can cause countless uncertainties for your global supply chain, there’s one thing you can count on: Bad actors will try to take advantage of the situation.
You don’t have to look hard to find brazen examples—like this $35 million suspected PPE scheme. Or this $2 million crypto graphics card scam. These examples reinforce the old adage: If an offer looks too good to be true, it most likely is.
Many of these cases involve people or entities you don’t know. They’ll often reach out during a sudden disruption, when you may be compelled to make decisions that would otherwise be outside of your risk tolerance.
10 tips for checking new vendors
When vetting potential suppliers, there are things you can do to help manage your supply chain risk. Here’s a checklist to help you consistently research possible partners:
- Remain vigilant with any new vendor validation and follow your organization’s established due diligence procedures.
- Research names, addresses, ownership structure, tax information, business licenses and other key details; when available, leverage industry risk tools and databases.
- Vet third-party brokers that you use for procurement needs as you would a potential new business partner.
- Obtain industry references for potential suppliers and third-party brokers from sources you trust.
- When possible, send a company representative to visit the business partner.
- Don’t agree to requests for upfront payments in full; use an escrow service if applicable.
- Carefully review invoices to ensure the contact and business information matches your research.
- Scrutinize emails from existing vendors who request changes to payment methods and/or bank account information to prevent business email compromise and other scams.
- Perform callbacks to phone numbers using a system of record to validate any request.
- Report any suspicious activity to the FBI.
Download your copy of the 10 tips below. And remember, if something sounds too good to be true, it probably is.
More resources online
Find articles and tips to prevent fraud attacks on our Commercial Banking website. You also can contact your banker to learn more about all the ways we can help protect your business.
© 2023 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC. Visit jpmorgan.com/commercial-banking/legal-disclaimer for disclosures and disclaimers related to this content.
