The Fraudulent Purchase Order Scam: How to Protect Trade Credit
How purchase order impersonation fraud works in B2B sales, the common variants, checkpoints before shipping, and controls that limit exposure.
· 4 min read
Purchase order fraud is one of the most frequent scams against companies that sell on terms. The fraudster poses as a buyer at a real, well-known company, places a sizable order with urgent delivery to an address of their choosing, and disappears once the goods arrive. The company whose name was used never knew about the order — and will not pay.
Why it works
The scam exploits three weak points in the sales process:
- Underwriting is run on the entity, which is legitimate and has a good record
- Urgency compresses the time available for checks
- A different delivery address is treated as a logistics detail rather than a risk signal
The order clears because the company being analyzed is real. What never gets validated is whether the order actually came from them.
Common variants
Impersonated buyer at a known company
Use of a real company's name and identifiers, with an email domain that resembles the official one — a swapped character, or a newly registered lookalike domain.
Nonexistent branch
An order placed in the real company's name, asking for delivery to a "new location" that appears in no record.
Banking detail change
A variant that targets payment rather than goods: a message claiming new remittance details. It hits whoever pays, not whoever sells — worth knowing on both sides.
Buyer-arranged freight
The fraudster insists on picking up with their own truck or a carrier they select, avoiding a verifiable delivery record.
Checkpoints before shipping
| Check | How |
|---|---|
| Confirm the order | Call the company's main published number, not the one on the PO |
| Email domain | Compare character by character against the known domain |
| Delivery address | Verify it exists as a location of that company |
| The buyer | Confirm the person works there and has purchasing authority |
| History | Compare volume and product mix to that customer's pattern |
| Freight | Prefer your own carrier, with a signed delivery receipt |
The single rule that prevents most cases: a delivery address not already on file requires confirmation through an independent channel, with no exception and no rush.
Operational controls
- Pre-registered delivery addresses, with any new address treated as a file change subject to verification
- Active confirmation of orders above a threshold from customers with no recent history
- Rush orders route to mandatory verification, rather than skipping it
- Signed proof of delivery identifying who received the goods
- Alerting sales when a new, unknown buyer contact appears
- Dual verification for banking detail changes, always through an already-known channel
If it happens
- Contact the carrier immediately to attempt interception
- File a police report and preserve every piece of evidence: emails with full headers, the purchase order, call recordings, delivery receipt
- Notify the company whose name was used — they are a victim and often have useful information
- Log the address, phone, email and pattern in your internal case file
- Review remedies with counsel
Who needs to know the playbook
Sales, billing, shipping and credit. A good share of cases get stopped by the shipping desk, which notices that the delivery address does not match the file — provided they have standing authority to stop the process without being treated as an obstacle to a sale.
These rules belong in the fraud prevention policy, and the general signals are in red flags in credit applications.
What to take from this
Underwriting the entity does not validate the order. Confirm through the company's published number, treat a new delivery address as a file change, and give shipping the authority to stop an inconsistent delivery. Urgency is a reason to check more, not less.
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