Solution needed for vetting new partner companies
September 15, 2016 10:12 AM   Subscribe

I work in fraud prevention for a medium-sized online company based in the US. Our service allows domestic and international vendors to sell to our customer base using our platform. Think Etsy or AirBnB, with one major difference: buyers have no way to rate vendors or leave public feedback. Please trust that this is one part of our site and culture that is not going to change. The responsibility for vetting our vendors lies with us, and here’s where the problem comes in. There has got to be a way for us to do this better.

Throwaway email:

Our sales team accepts self-sourced leads and also goes after businesses that currently use our competitors (many of which don’t seem to vet their vendors either…) These businesses are not required to be brick-and-mortar, (although many of them are.) The only requirements for coming aboard are that they have to provide a valid business license and tax ID (which no one checks! Except for me, sometimes!), an active credit card (which is only checked during the OB process, not before,) and a name, address and phone number. There is no formal vetting process right now to ensure that these companies are legitimate. Companies are allowed to accept payment any way they please. The result is that some of these vendors turn out to be fly-by-night scammers, and we don’t find out until customers contact us complaining that they wired money to a Swiss bank account but never received what they paid for, and now the company isn’t returning their calls, or they paid for something that turned out to be garbage. We’ve also signed several companies that we later learn are associated with companies we’ve previously fired for their poor performance and/or scamminess.

Right now, I am responsible for helping resolve customer complaints, as well as researching and making recommendations to remove vendors when they turn out to be problematic. Here are my challenges and current process:
-I have no background in fraud or sales. I was promoted from a semi-related department into this brand-new role. I am the only person in the company officially doing this work, although customer service and sales occasionally get pulled in. The heads of these two departments have final say over what businesses stay and go.
-We sign several new businesses daily. I see announcements after each account is signed. I try to check out each one, but run into these challenges:
• I have no training in this field, so my current method is scattershot: googling their business name and contact info, checking out their website and the info they’ve provided to us, and trying to verify that their business license and tax ID are valid. I look at their communication to and/from and consider the lead source. This is inefficient and not always effective.
• Some companies very quickly check out as legitimate, but for those that don’t, I am often stuck on to what to do next. I can turn up a company that, for example, has an address that doesn’t come up on google maps and a jenky-looking website, and take that to our sales and customer service department to recommend we not onboard, but unless there’s a clear link to a business we’ve fired, or say, a news article about the head of the company losing their license for fraud (which I have occasionally found!) the answer is almost invariably to just take a watch-and-see approach.
• We’re US based. Most of the accounts we sign are also in the US, but international businesses are even harder. I know how to use google translate, but I have no knowledge or resources for verifying that these businesses are real.
- It is explicitly in my job description to review accounts after one receives a large number of complaints or someone else in the company believes it looks shady. Pre-vetting these new accounts before they are onboarded is not technically anything I’ve been asked to do (although not against the rules at all.) It just doesn’t make sense to me to wait until the bad companies funnel down.
-Our sales team will NOT be assigned any additional vetting work. I have brought this up before and it was discussed over my head, and the decision was made that they have enough on their plates with their current responsibilities.
-I am balancing this work with many other unrelated tasks and projects. Anything that significantly adds to my workload and/or delays the current onboarding process much is not going to be ideal.
-We are aggressively (and successfully) pursuing new business. We could end up signing twice as many vendors daily by the end of the year. As we gain notoriety, more and more leads are self-sourced.
-Hiring someone to work with me is not in the cards right now. There’s a hold on the creation of new positions, probably for the next year or two.

What I want to find out:
-How do other medium-to large businesses handle this kind of vetting?
-Are there third-party companies we could use to verify leads before we pursue or sign them, kind of like background checks for businesses, and if so, what are some reputable ones? (this is what I am hoping for.)
-Are there any other changes we can employ in the short term that wouldn’t put a burden on Sales (or much more on me?) We use Saleforce if that helps.

Please note, I do not think my company is fundamentally sick or broken, so no advice to quit, please. I realize that what I wrote may make them sound laissez faire about fraud, but please trust me that overall, the people I work for are responsive and thoughtful. The company recently put a lot of money and resources into a fraud-prevention initiative on the customer side that I’d championed. But change is often slow as a result of competing priorities and limited resources, and everyone has a lot invested in signing new business as fast as possible. I am planning to work up a presentation showing what bad partners cost us (waste of sales time that could be spent pursuing better leads; damage to clients; damage to our reputation, etc.) If I can prove that there’s a problem and present a great cost-effective solution that fits our needs at the same time, there’s a great chance we’ll implement it.
posted by anonymous to Work & Money (3 answers total) 1 user marked this as a favorite
What is the process to get a vendor onboard? My company has a 9 page prequalification questionnaire. That usually does the job of separating the wheat from the chaff. Putting one together is easy.
Other options include:

1. Creating a Gold Vendor status which costs $XXX a year, which offers a crest vendors can use to attest to product knowledge and customer service through an online portal. Avetta is a good third party solution, as is Altius but it may not be US-specific like Avetta.

2. You can do regular research through a Vendor of the Year awards, free to enter, with several categories and a point awarded for each one completed. My clients call this "business case study and reference roundup". I am happy to give you some several summary ideas if you message me.
posted by parmanparman at 10:35 AM on September 15, 2016

I would be surprised if Lexis-Nexis didn't have a product that would help you out.
posted by Medieval Maven at 11:01 AM on September 15, 2016

I work for a company that designs software to do vendor vetting and we work with quite a few medium and large sized institutions, including some major brands in the insurance and banking industry, both in the US and around the world. Vendor verification and screening really varies from industry to industry just based on rules and regulations, but there are a lot of data vendors out there that make lists to do exactly what you are doing. Some of them are quite pricey, and others are pretty cheap but priced per record. I'm a data nerd and I'd be happy to talk if you want to discuss options and not have anyone try to sell you something. I'll email you at the address above.
posted by Alison at 1:41 PM on September 15, 2016

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