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BUSINESS AVIATION AND THE BOARDROOM - BEWARE THE SALES SCAMMER

In today’s challenging business arena the temptation is great for aggressive marketers to overreach. Indeed, Board Members should beware when considering major changes to their Business Aviation policies, cautions Steve Rogers. It is possible for the unwary to fall victim to a scam when looking to buy an aircraft.

AvBuyer   |   1st January 2011
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Spot the tell-tale signs before you get stung.
In today’s challenging business arena the temptation is great for aggressive marketers to overreach. Indeed, Board Members should beware when considering major changes to their Business Aviation policies, cautions Steve Rogers. It is possible for the unwary to fall victim to a scam when looking to buy an aircraft
.

Is a Board Member responsible for your corporation’s policies related to Business Aviation, you may not be exposed to the underbelly of aircraft negotiations. Serious scams aimed at the buyer who is ignorant of how the aviation sales business works, however, do exist. Thus you need to take note and be ready to spot the tell-tale signs of a possible sales scam before your company becomes another victim.

First, it is likely that you will be asked to approve purchase of an aircraft that seems ideal for your company and at a price that is obviously below market. Let me re-phrase that: To an industry professional, the aircraft is obviously below market, but to the buyer - whose judgment may be clouded by a belief that all aircraft are overpriced - this aircraft might jump out from the rest as the one that seems to be particularly attractive.

You are interested in this aircraft, so you authorize your flight department manager to call or email the stated contact for details. The desired material arrives, along with specifics of where to send the deposit to hold the aircraft. Naturally your people will want to see the aircraft but you will find it is never available - or the contact will be vague about its location.

Here’s the most important part of the scam: The contact will then require your company to send the deposit to an account, giving the details of a law firm they use that they claim will hold the money in their escrow account. There is, of course, no law firm. The account is one that the scammer controls him or herself.

Perhaps you suggest using another escrow facility but are told the aircraft is already under offer (you can be guaranteed that if an associate calls to enquire about it the very next day, the aircraft will be available for sale!).

In essence, all the scammer wants is your deposit, placed in an account that he or she controls. Once they have your deposit, your company can kiss goodbye to its money. More than likely, your scammer will then change all their contact details and start afresh, looking for another unwary victim.

THEY’RE SOPHISTICATED - BE METICULOUS!
Don’t think that these scams are easy to spot. Two years ago they would have been, but scammers are getting more and more devious. They will have an excellent website, with phone numbers and very often a bona fide address…just not their own address.

A website probably exists for the escrow agent that the scammer intends you to use, and it may be very similar to one for a large firm of lawyers. I have had half a dozen non-UK brokers call to check on an aircraft or a company because they felt there was something wrong, but they could not quite put their finger on it.

The aircraft itself will probably be of reasonable value: somewhere between $100,000 and a couple of million dollars (typically requiring a deposit in the region of $25,000 to $50,000). The aircraft may even genuinely be on the market – we previously found a website with four of the same aircraft we were representing, all advertising an asking price well below what we knew the owners would accept. Alternatively, the aircraft may be one chosen at random, with specifications put together using details from another aircraft.

DON’T IGNORE A SCAM
If you are buying an aircraft for the sums of money mentioned above, or certainly for over $250,000, then use one of the major US escrow agents/title search companies.

Alternatively, have your aviation manager ask one of the major brokers - whose adverts are regularly seen - which escrow agents they use. The escrow agent fees are very reasonable for the service that they offer, and the major ones do hold accounts in various currencies, often globally.

If you are buying a smaller aircraft, there are firms of solicitors who will provide an escrow service - but remember: only use them if recommended by one of the larger brokers in the business. If you are not sure about someone, always ask. It’s better that than getting stung.

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