Container fraud costs users R500k daily

The used shipping container market is being decimated by millions of rands in fraud in a fresh assault on unsuspecting buyers.

Estimates set daily losses at nearly half a million rands in an industry that’s worth around R500 million to the economy annually.

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Kobus Lombard, of East Rand Containers, said that the current surge in fraudulent activity is exceptionally well organised and immensely hard to track.

Scammers advertise more than legit businesses

The syndicate spends vast amounts of money on Google advertising campaigns to lure potential buyers and investors.

“The money spent on these campaigns dwarfs anything that legitimate role players are able to afford,” he said. And consequently thousands of potential victims take the bait.

Used shipping containers are used in a multitude of ways, from mobile clinics through to housing and informal retail.

“And it’s usually the people who cannot afford to lose the money, the person who saved to open a spaza, entrepreneurs, who become ensnared in this scam,” Lombard said.

Prospects or marks are sold a pipe dream of affordable containers priced between R15 000 and R20 000 and are required to place a 50% deposit upfront prior to delivery.

“Of course the delivery never happens, but the criminals have the money,” said Lombard who added that legitimate containers should sell for north of R30 000 a pop.

Chad Thomas, of IRS Forensic Investigations, said container scams have been around for years.

“We have investigated everything from container theft through to investment scams into nonexistent shipping companies, through to similar activity that is presently enjoying a resurgence,” he said.

Websites along with concomitant advertising campaigns are put up and taken down as and when they are bust, Thomas added, and it’s almost impossible to trace the source because the syndicates are slick.

Similar deposit taking scams have ensnared unsuspecting people with criminals selling anything from puppies to high technology items and everything in-between.

They always requires a deposit before delivery. To tackle this issue, Lombard has launched a dedicated website aimed at combating container fraud.

He wants this to become a destination online resource for the public to check out the legitimacy of the potential seller of a container and has recruited several fellow role players in the industry to join.

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It’s a vetting system but it requires participation of the entire industry he said.

“We have quite a few companies in the industry registered now,” he said, adding that he continues to solicit participation from companies that have not joined his project yet, to ensure safety for the public and protect the industry itself from criminals.

His site, containerfraud.co.za, lists illegitimate operators as he becomes aware of them, but it can be a daunting task.

“As soon as they get listed, they close the domain and get a new one,” he said. This makes it a continuous battle to keep up with fraudulent entities.

He suspects the rapid speed with which the criminals operate must mean they have plants throughout the value chain.

Thomas said that large scam operations like this are normally managed by syndicates who run several cons simultaneously.

“They almost inevitably have people on the inside,” he said.

“Whether it’s sources within the industry or enablers that register domains, marketers who build expert online advertising campaigns across search and social media platforms and people who are inside the banks.”

Lombard said that in all the cases that victims have shared with him, the bank account numbers were local, many at major banks and some at smaller brands.

The cash is withdrawn at ATMs almost immediately after deposit and then it is gone.