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How To Tackle the Rise of COVID-19 Related PPE Frauds

The COVID-19 pandemic has exposed the shortcomings of inventory-maintenance systems when organisations face extreme demand. As the demand-supply ratio experiences volatile changes, scammers attempt to capitalise onsupply-chain loopholes. This has led to a significant rise in PPE frauds.

In the pre-COVID world, stockpiling was considered inefficient due to carrying costs. As the intensity of the pandemic spread and grew unreservedly, it became important for healthcare procurement teams to keep the costs of PPE supplies at a minimum. Ephemerally, estimating demand and supply chain disruptions may seem like the only challenges. A deeper dive into the issue reveals multiple awaiting challenges, including PPE frauds.
With the demand for PPE kits and other medical equipment rising unprecedently, many sophisticated frauds are surfacing. A sense of urgency about diminishing supplies prevails. Therefore, it has become necessary to fasten procurement decisions and quicken payments in order to reduce red tape. But that does not eliminate the risk of frauds.
Commonly Faced Frauds
Here are some ways in which frauds have already been committed-
  • Cloning– Many suppliers are falsely claiming to be legitimate and cheating buyers by demanding payments unduly.
  • Payment frauds – Sure, the mode of online payments has made transacting with businesses easier. However, risk multiplies significantly if one does not hold proper background checks on suppliers.
  • False promises – Scammers claim access to huge inventories. A legitimate manufacturer would instead tell you it would take years of dedicated production to achieve a gigantic stockpile.
  • Ability to fulfil large orders – Many factories that manufacture non-medical products are quickly converting to manufacture medical supplies. But some suppliers cannot fulfil large orders owing to resource insufficiency. This leads to production and delivery of substandard goods.
  • Finding a Reprieve
    There are certain safeguarding solutions one can explore to avoid becoming a victim of such frauds. In addition to adhering to good supply chain practices based on terms and conditions, one can also try using an escrow account for safekeeping. Escrows are a highly viable option as these accounts hold funds and deliverables securely in a trust until the transaction is complete. This means that you can assess the deliverables before the final payout. Sellers are protected from unexpected chargebacks. Due diligence by transacting parties, facilitating payments in tranches and protection from insolvency are some additional benefits.
    Further, the following make using escrow services for your transactions a smart choice-
  • Carry out robust background checks to ensure that the transacting parties are legitimate.
  • Set-up durations for online escrow accounts have been reduced to 48 hours. For banks, this duration can extend to 6 weeks.
  • Simple and fast digital escrow account creation.
  • Online escrow accounts allow full transparency to all participants. Additionally, one can customise user access and permissions according to the terms of agreement.
  • One can upload important transaction documents, such as invoices, for everyone to access.
  • The pandemic has exposed the brittleness of our global supply chains and trading systems.  In these trying times, care and precaution are necessary at each professional and personal avenue. Although personal solutions for ensuring negation of frauds are present and accessible, there is a dire need to make transaction processes more transparent.

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