ShopNord, a rapidly expanding e-commerce platform specializing in Nordic design products, faced a sophisticated fraud attempt that could have resulted in substantial financial losses and reputational damage. This case study explores how Leggit.se's real-time monitoring tools helped detect and prevent the fraud, protecting ShopNord's business.
The Situation
ShopNord had experienced tremendous growth, expanding from a small startup to a platform with over 500 vendor partnerships in just three years. This rapid expansion created challenges in vendor verification and ongoing monitoring, particularly as they began accepting international sellers onto their platform.
"As we scaled, our manual processes for vendor verification couldn't keep up," explains Helena Bergman, ShopNord's Head of Marketplace Operations. "We needed a more robust system to ensure we were working with legitimate businesses."
The Threat
In early 2023, ShopNord received applications from what appeared to be three established Swedish furniture manufacturers looking to sell their products on the platform. The applications included all standard documentation, including company registration numbers, tax certificates, and product catalogs with competitive pricing.
Initial manual checks showed nothing suspicious, and the companies were nearly approved for onboarding when ShopNord's newly implemented Leggit.se monitoring system flagged potential issues.
The Leggit.se Detection
Leggit.se's platform identified several red flags that had been missed in manual review:
- All three "companies" had undergone ownership changes in the past 30 days, with the same individual appearing in their ownership structures
- The businesses had recently changed their registered addresses to mailbox facilities
- There were significant discrepancies between reported financial data and official registry information
- The companies had no digital footprint prior to the previous month, despite claiming decades of operation
The Outcome
Armed with this information, ShopNord immediately halted the onboarding process and alerted authorities. Investigation revealed that fraudsters had acquired dormant company registrations and created elaborate false identities to establish what would have been a sophisticated dropshipping scam targeting ShopNord's customers.
"Without the Leggit.se system, we would have onboarded these vendors," says Helena. "The potential damage to our customers and our reputation would have been severe."
Implemented Solution
Following this incident, ShopNord fully integrated Leggit.se's monitoring tools into their vendor management system:
- Automated verification of all new vendor applications against authoritative business registries
- Continuous monitoring of existing vendors for changes in ownership, management, or financial status
- Risk scoring algorithm to prioritize manual review for high-risk indicators
- Webhook notifications for immediate alerts on significant changes
Business Impact
In the year following implementation, ShopNord has:
- Prevented an estimated €2.3 million in potential fraud losses
- Reduced vendor verification time by 65% while improving accuracy
- Decreased customer complaints related to vendor issues by 48%
- Successfully expanded into two new European markets with confidence
"Real-time company data monitoring has become a competitive advantage for us," concludes Helena. "It's allowed us to scale safely, protect our customers, and maintain the trust that's essential to our brand."