The company said that once the cashier’s checks were discovered to be fraudulent, the studio tried to contact the distributors but were unable to do so with the information they had used previously. Mail sent to the distributors’ addresses was returned because the locations were vacant.
According to Pink Visual, the distributors also paid for their UPS shipping fees with cashier’s checks, but their validity is yet to be confirmed.
Brand and product manager for Pink Visual, Kim Kysar, told XBIZ the company had no reason to suspect that the distributors were scam artists.
“We had no idea,” Kysar said. “They seemed perfectly legitimate. We get new distributors all the time, and nothing seemed out of the ordinary with these guys.
“We do have pretty strict new customer guidelines for obtaining credit terms with us, so we weren’t surprised when they opted to purchase via COD,” Kysar added, “and of course a cashier’s check always sounds foolproof, so we went ahead with the deal, happy to have the order and start a new relationship with a new customer.”
In fact, Kysar said Pink Visual has a strict policy of researching customers, especially when they apply for credit with the company.
“It’s pretty stringent if they want credit terms with us,” she said. “We utilize credit-checking programs like Dun & Bradstreet, set credit limits and get references — something that new customers seem shocked that we’re doing, because so few companies in the adult industry go to these lengths.
“However, something that we weren’t as stringent with was customers opting to avoid those procedures and either pre-pay or pay via COD,” Kysar said.
As a result of the situation, Kysar said that the company would implement a waiting period, to allow submitted checks to cash before shipping product to new customers.
The company is also urging industry wholesalers/retailers to be diligent in buying product only from legitimate vendors, in order to avoid scams and also, as a safeguard against illegitimate vendors. Kysar speculated that the Pink Visual product stolen in the scam would be resold, in some cases, to potentially unsuspecting buyers.
Pink Visual also wanted to warn other adult production companies and distributors about encountering the same situation. Though the distributors remain unnamed, Pink Visual did indicate that they were located in Southern California.
“We don’t know their whereabouts, and if we choose a legal recourse the first step would be to call upon the FBI due to the interstate fraud involved,” Kysar said. “We have turned this over to collections and are still seeking other options.
“I don’t believe we were the only victims of this scam, so it’s possible that if others come forward who were taken by the same guys, this could be a huge case that impacts the industry as a whole,” she added. “We’re also checking to see if our carrier was presented with a fraudulent check for the shipping charges.”
For more information, contact Kysar at Kim@PinkVisual.com.