Fraud alert

For a number of years one of ITIC’s members had acted as a charterer’s broker for a steel trading company. They were asked to find a ship to lift a cargo of steel coils and circulated the requirement to their usual contacts. They were unable to find acceptable tonnage.

They received an approach from a broker they had not heard of before. The unknown owner’s broker advised that the head owner was, Glen Maritime, and that Silver River were the disponent owners. The charterers had previously given instructions that they wished to fix with owners directly. The owner’s brokers provided the charterer’s brokers with a letter of authorisation from a company called Glen Marine stating that the disponent owners could collect the freight on their behalf. The charterer’s brokers felt that this was as good as fixing directly.

When the ship had loaded the owner’s broker sent a freight invoice issued on Silver River’s headed paper signed and stamped. This invoice was immediately forwarded to the charterers for payment.

A week later the charterers advised their broker that the head owners had contacted them directly and demanded payment of the freight. The freight remitted to Silver River had not been received by the head owners.

The charterer’s brokers tried to call the “owner’s broker” but their mobile number and email address had become inactive. They then contacted the head owners who advised that they were unaware that there was more than one broker involved. The head owners denied issuing a letter of authorisation. On closer examination it was noted that the company details on the letter were not identical to the head owners. It became clear that the charterers had been the victim of a fraud. The “owner’s broker” had concluded a fixture with the steel traders at one rate, while simultaneously fixing with the actual owners at a lump sum rate. They had then simply misappropriated the freight. 

The head owners refused to discharge the cargo until freight was received in their account. The charterer had to pay again in order to obtain their cargo. They claimed from their broker who had not followed their instruction only to fix directly with owners and failed to properly examine the letter of authorisation.