Abstract: Faced with component shortages and extended lead times, sourcing professionals, under pressure from their customers, are looking for parts through alternate sources online and are putting themselves at risk for not just counterfeits parts, but also wire fraud and identity theft. Digital channel purchases made through Internet search platforms (e.g. Google) can put an organization at risk for identity theft and loss of funds through payment in advance schemes that may be funding criminal activities, counterfeiters, organized crime syndicates, and even state-sponsored terrorism. To date, ERAI has tracked nearly $1,000,000.00 in wire fraud losses from just one group of malicious individuals alone. Fraudsters have long understood that it is easy to anonymously set up a website and take wire transfer in advance for parts they don’t intend to ship with practically no repercussions, leaving the buyer with no recourse. This presentation will provide specific examples of fraudulent websites, how pay-per-click advertising enables them to appear at the top of search results for commonly sought-after parts, and the difficulties that victims face when seeking assistance from law enforcement agencies. We will discuss how organizations can prevent losses through supplier selection best practices and how data-sharing benefits all organizations in the electronics supply chain.

Bio: For 35 years Richard Smith has served as an electronic component Sales Representative, Sales Manager and International Vice President for manufacturers’ reps, franchised, and independent distributors. As International VP he opened sales offices and stocking facilities in China, Mexico, Malaysia, and India. He has had the opportunity to visit customers in 26 countries and 360 cities. In 2013 Richard shifted gears and joined ERAI to provide manufacturers and distributors with tools and services to mitigate the risk posed by counterfeit parts.