Doing business with another established organization can lull you into a false sense of security. You might assume that a company with an actual address and executive team won’t engage in fraudulent behavior.
However, many forms of business fraud do involve established businesses, including those that primarily conduct business-to-business operations. What are three of the more common forms of business fraud that could potentially affect your company’s operations?
Failure to deliver
Perhaps the most basic form of business fraud involves taking money from a customer or client and then not following through with the performance of the expected service or delivery of specific goods.
Failure to pay
The inverse of the “failure to deliver” situation can also be a concern. There are businesses out there that will arrange for the delivery of merchandise or materials and then not pay for them after receipt. There are also companies that will solicit other businesses for services and then not pay for the work performed.
Bait and switch fraud
Sometimes, a company will provide a service or a physical product but not the one that someone paid them to provide. They will make big promises and then underdeliver. By providing a cheaper product or a less professional service, they deprive the other party of what they expected to receive for their payment.
Your business contracts and internal records can play an important role when gathering evidence of business fraud to pursue a legal claim against another company. Understanding when business behaviors open the door to civil litigation can help you push back against bad business practices.