"What do you mean the money's gone!?!"

The event industry is a truly great, exciting and friendly place to work.  It's also stressful, time sensitive and requires perfect planning. 

Businesses could learn a lot from many experienced event organisers about; team building, customer service, negotiation, bidding, project management, multiple supplier handling, leadership, marketing, advertising, return on investment, budget controls and so on.  

However, the success of many events also relies on a backbone of those involved being able to build trust, relationships and professionalism simply because of the nature of the environment.

And it's because of this backbone, the fraudsters are moving in to this space as more reports are surfacing because event organisers are starting to stand up and let others know there are scammers taking advantage and that it isn't the fault of the event organiser over looking small details. 

The scammers are taking advantage and using the backbone against the industry!

Here are some of the frauds I've heard:

1) A large UK law firm decided to run an event in India.  They did their research and found a local event organiser to partner with.  They did their due diligence. They flew to meet the organiser at a venue, met, discussed, flew home.  They did this several times as the event was to be a flagship event. Finally they agreed figures, signed a contract and handed over £50,000 as a deposit to kick start booking everything.  That was the last time they saw the money!  The organiser was a con artist who was playing the long game pretending to be an organiser.  He had everything perfectly covered and seemingly credible and plausible. The law firm lost the cash. All the signs were there because experienced organisers merely pass liability for booking onto the client and won't take this upon themselves incase the client decides not to go ahead and leaves them with the cancellation charge.  However, there are also a few innocent event organisers who do operate this way - take a deposit and pay the deposits on behalf of the clients especially if there is an issue involving currency, so I could see how it could be easy to overlook the alarm bells which allows for this type of con, which typically preys on international clients reaching out to the local area.

2) AEO in the UK have issued a statement warning that a number of their members' clients are falling prey to 'directory service' scammers.  It seems customers exhibiting at exhibitions are being targeted by scammers claiming they are working with the exhibition, using the exhibition's branding and event details to appear genuine.  The scammers contact those who've booked a stand at the event, getting the exhibitors to sign up to a directory service which is 3 years, non-retractable agreements and in some cases for significant amounts of money.  Unfortunately, the scammers here rely on the Event Organiser trusting anything that has the exhibitors branding to be genuine communication and so will sometimes agree to or sign forms before reading the small print assuming that it is a genuine offer instead of doing the normal, 'did you send this out' and 'are they really your partner' check with the exhibition office first.  This is also the same base method used by Hotel Poachers and Room Blockers too.

3) There is also an increase in the Cyber crime of 'whaling'.  This is phishing on steroids and it relies on the victim attending an event.  This is highly targeted stuff as it relies on someone somewhere naming names as to who is going to what event and when.  The scammers are looking for high worth individuals, and particularly like to favour bosses of medium sized organisations who are probably doing a speech and listed as being on the stage at the event, or have read somewhere about them attending as an exhibitor or being a member in the audience - but it's always around the event.  On the day of the event, or the evening before - depending on the information they've found, they send an email purporting to be the victim to their PA, Accounts or who ever they've identified as a 'link', saying that they've ran out of money and have met an important prospective client and need to wine and dine them so could some cash be transferred quickly.  Or they need to buy something at the event and need the cash transferred quickly to take advantage of show prices or the hotel bill was more expensive than they thought and need the cash transferred quickly.  The details given are so close that at first you would think it genuinely came from them and going to a genuine source, but with one small letter or number change, emails and accounts can look deceptively real.  Most victims are left out of pocket to the sum of £3,000 to £4,000.  However, at one cyber crime event I was attending, a CEO rather embarrassingly admitted that his firm had been victim to this: while he was away at an event, his PA sent him, (the scammers) £150,0000.  The shocking part was that while he reported it accordingly, he did admit that if it had been for one of the smaller sums like £3000, he would have written it off as bad experience and save himself the feeling of being embarrassed to admit that they'd been caught out!

4) The charge back or cheque to cash scam.  This has come in many guises in other industries but it's starting to make it's way in to the events industry in a number of ways: 

1. Thanks to the increase of registration apps, online payment, internet banking, card payments and registering for events online, one method is really starting to shine through using a stolen credit card to purchase tickets.  Why? because the fraudster then calls the event organiser and asks for a refund (sister / mother granny dog has died and can't attend excuse)- but not to charge it back to the card, but to another card, or to a bank account or asks for a cheque. Once done, the money is usually untraceable and it's the organiser who has to foot the loss and not the credit card.
2. The 'client' (read scammer in this case) says they'll pay by cheque and send the organiser a cheque accordingly or sends the cheque to the organisers bank direct. Depending on the bank, it normally takes 3 working days for 'business cheques' to clear and the scammer uses this time to call the organiser, explain they've over paid or there's been a change of circumstances and need to reduce budget - either way, they ask the organiser if they could 'send some or all of the money back' - ie do a bank transfer against the sum they can see 'registered on their account but still waiting for the cheque to clear'.  Of course the organiser obliges only to find that when the cheque is supposedly due to clear, it bounces. 
3. A little more sophisticated but involves a 2nd party being part of the con too.  Client (scammer A) calls and books the services of the organiser.  The client then says they would like a particular speaker or service and names them.  The organiser calls the speaker's agent or the service provider - who is actually Scammer B. The organiser is put through the mill 'negotiations', giving it all the feel of being 'genuine', including info that they have to pay for the speaker or service, 'upfront'.  Organiser calls the client to let them know. Client sends organiser a 'cheque' and is persuaded to send a cheque themselves to the other party on the pretence that both cheques clears at the same time.  Reality is the organiser being left out of pocket as Scammer A's cheque bounces and Scammer B cashes in the organiser's cheque for real cash.

While we can't stop fraud overnight, being vigilant is key as well as not being afraid to step up and share knowledge so scammers and their methods are highlighted quickly, helping to stamp this out.

Because of this, I know with iwantaspeaker.com we've stopped client's losing money to fraudsters, saving one client over £6,000 in air flights alone simply because we equipped the site with the facility of an escrow account - which means that until the money is in the neutral escrow account and the service has been performed, no one is going anywhere or being paid. Speakers don't leave home before funds are cleared into the escrow and organisers fee doesn't leave the account until the speaker has done whatever they agreed to do.  So, we haven't been good news for fraudsters and those wishing to get their hands on your money quickly.  And we look forward to continuing to do our part in helping to keep the event industry in it's wonderful, creative way of doing trusted business.

by Cindy-Michelle Waterfield