This case study demonstrates how an insured business purchased machinery worth £4,000 from a seller on eBay who had in fact forged their identity to commit fraud, and reveals the role Rural Protect played in settling the financial loss. This case demonstrates how Third-Party Fraud & Forgery cover, one of covers that Rural Protect also provides, steps in in the event of a business being victim to third-party fraud.
Business type: Mixed Farming
Section of cover: Company Legal Liability
Applicable cover: Third-Party Fraud & Forgery
Circumstance: The insured business purchased £4,000 worth of equipment from a fraudster.
Total claim value: £5,439
The scenario:
The insured business came across a seller on eBay and purchased £4,000 plus VAT worth of machinery from them. All communications between buyer and seller were carried out outside of eBay and the business made the payment to the seller via BACS, without the security of eBay’s Buyer Protection.
What happened:
Later, when the machinery was not delivered, the business realised that the eBay seller was a fraud and was forging the identity and details of another business to advertise false products. When the business demanded reimbursement, eBay refused, stating they could not help as the final transaction had not been carried out within the safety of their website.
The outcome:
The business reported this transaction to their bank and attempted to recover the funds that way but unfortunately their bank was unable to help as they had willingly transferred the money. The business then turned to their Rural Protect policy which intervened and helped the policyholder financially by reimbursing the amount lost.
Things to consider:
While using a third-party website or app like eBay, it is recommended that all communications and transactions are carried out via their secured systems to seek easy help or reimbursement in the event of a scam. In cases where exchanges are carried out separately, seeking restitution from the fraudster and tracing down their real identity can be very difficult and nearly impossible. Since Rural Protect provides Company Legal Liability which includes a Third-Party Fraud & Forgery extension, the policyholder in this case was able to seek compensation despite being unable to identify the fraudster.
If you would like to know more about Rural Protect, call us on 01653 609090 or email enquiries@hbunderwriting.co.uk.
