Ag Community Warned of Scam

A new scam targeting farmers, ranchers and agricultural producers is making the rounds, using a sophisticated “man-in-the-middle” scheme involving online marketplaces and fraudulent payments.

The scam can target producers selling hay, livestock, equipment and other agricultural products, as well as buyers looking for deals online.

In one version of the scam, a fraudster uses a stolen credit card or compromised bank account to purchase a product from a legitimate farmer or rancher. At the same time, the scammer posts a fake advertisement for the same product, often at a below-market price.

An unsuspecting buyer responds to the fake advertisement and sends payment directly to the scammer, sometimes using a mobile payment service such as Zelle. The scammer then provides the buyer’s address to the legitimate producer, who delivers the product.

The transaction may appear legitimate until the producer’s original payment is reversed or identified as fraudulent. The scammer then disappears with the buyer’s money, leaving the producer facing a financial loss.

In many cases, the person who receives the product is also an innocent party. The buyer may have paid in good faith and have no knowledge that the transaction was fraudulent.

Agricultural producers can take several steps to reduce their risk, including:

• Be cautious when dealing with unfamiliar or out-of-town buyers.
• Verify who is actually making a payment before accepting bank transfers, checks or mobile payment payments.
• Consider requiring new customers to use a reputable escrow service or an identity-verified payment or invoicing platform.
• Be especially cautious when the person paying for an order is different from the person receiving the product.
• Be wary of unusually low prices or purchasing arrangements that do not follow normal business practices.

Anyone who believes they may have been the victim of a scam should preserve communications, advertisements, payment records, invoices and other documentation and report the incident to law enforcement.

Agricultural producers are encouraged to share the warning with fellow farmers, ranchers, brokers, buyers and others involved in agricultural commerce. Awareness of these schemes can help prevent additional losses.