The online rental business checklist for avoiding fraud

Every business that engages in e-commerce is exposed to risk associated with fraud and theft.  The risk to rental companies is even greater because title never transfers to the customer and the law offers less to assist in recouping the loss.  This is probably one of the biggest reasons the equipment rental industry has been less aggressive to adopt e-commerce.  Having run a successful online equipment rental company, I can tell you that it’s worth the effort to embrace e-commerce.  In the seven years running my rental company,, I never experienced a loss due to Internet fraud.   The reason is because of the process we developed to assess and reduce risk.

Starting from the easiest and most obvious indicators of potential fraud, and from a B2B perspective, here is a checklist of questions whose answers will help you reduce the risk of renting equipment online.

1.)  Is the customer’s email address from their company domain or a free email service like “hotmail” or “gmail”?

2.)  Does the time of the day the customer is contacting you coincide with the hours of their operation?

3.)  Is there a sense of urgency being communicated to receive the equipment?

4.)  Is the customer knowledgeable about the equipment and application?

5.)  Has the customer tried to negotiate price or indicate they are price sensitive?

6.)  Have you spoken with the customer over the phone?

7.)  Have you spoken with anyone else at their Company?

8.) Do they have social media profiles that confirm the information they have given you?

9.)  Is their address commercial or residential (Try using Google Maps)?

10.)  Is the ship-to address the same as the credit card billing address?

11.)  Will they be signing for delivery from the shipping carrier?

12.)  Is the credit card in the same name as the customer?

13.) Is the location of their IP address the same as the ship-to or bill-to address?

14.) Have they offered bank and trade references?

15.)  Can they email you a copy of their ID and credit card?

16.)  Can their insurance company send you a certificate of insurance?

The answer to anyone of these questions by themselves may or may not indicate risk.   I recommend starting at the top and working your way down.  The more risk identified at the top, the more important it is to work your way down.  Of course, there are no guarantees. While I never experienced a rental loss due to Internet fraud, one of my customers had my equipment stolen out of their truck.  Good thing we both had good insurance.


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