Scam Check—Protect Your Business from Being Scammed

Scamming could happen whenever buyers go to B2B platform and look for new suppliers. One common way of scamming is when the seller asks for deposit and disappears after the buyer pays. As a matter of fact, it is not always avoidable to pay in advance when you are a new customer to the supplier. What you could do is to pay enough attention to avoid it. And how to avoid being scammed? There are many ways to avoid being scammed and is quite easy to find those tips online. Yet it’d better to use a professional agent to help you as in some cases the scamming is really complicated and is very hard for a non-experienced customer to identify. scam alert1

Unfortunately, we received a SOS recently from a buyer who seemed trapped. The buyer was urgently looking for plastic materials. He found a Chinese supplier online with B2B platforms like Alibaba, quoted and selected. He paid deposit as requested by the Chinese supplier. As the story goes, the supplier suddenly changed its terms and conditions and he couldn’t contact this supplier again after he transferred the money.

The buyer contacted SAOS via our Linkedin, as a local professional services provider. He emailed us the situation, provided all the contacts and information for our support to clarify the case.

It was too late already, but we tried our best to check. As due diligence services, we normally do:

–  Call the contacts: Ask questions to understand if they are really in that business (e.g. this time we planed to ask advices on various plastic grades and material recommendation). Scammers have low chance to demonstrate real knowledge on subject matter and will avoid answering.

Also we ask about the client case, what he understands and how he is planning to arrange the delivery. A real supplier will be able to provide more details and genuine information.

–  Check custom data: We use official sources like Panjiva, a custom data provider, to see if the supplier has been doing export business and had real transactions. If records are existed, then we consider low chance of scamming.

–  Observations: We look into their official address, website, domain name, and see if they are wired. It is subjective, I agree, however that is exactly what we call experience.

For this time, what more than regular procedure is that we work with our alliance, the Wuhan Online Chamber of Commerce. The potential scammer has their address in Wuhan and claims to be a local company there. It makes full sense that we ask if our friends in the Chamber know about them.

The Wuhan Online Chamber of Commerce, having about 100 of members, is one of the most active and organized group of the exporting industry. I was there last week in Wuhan for a speech regarding buyer behavior as a guest speaker. Learning about this case, the Chamber took serious action to check if anyone knew about this company and the person who named in registration. The case also concerned the local office of Alibaba and their head of the Mid-west China business Mr. Zheng Lei, who took immediate action even it was not their responsibility. He checked their local database on the information of the company and found that the same reg. person used to register different business in other province. That information made the case more suspicious. Both Wuhan Chamber of Commerce and Alibaba are involved since they are dedicated for a clean and safe business environment of the local industry. scam check

As a result, unfortunately, we believe the chance that the buyer is scammed is high:

–  The scammer website contains only English, which is not common for most Chinese companies based on our long sourcing history dealing with local Chinese companies. This gives a feeling that they are only interest to dealing with (or, scam with) foreign business.

–  They are existed in Panjiva as well, but with no transaction history.

–  We called all the phone numbers available and none of them successfully took us to any contact person. However, after several times of calling, we finally reached the project contact to pick up the phone. When we asked about the case, the girl on the phone said she knew nothing and hung up the phone. From the above observations, we believe the buyer is not just meeting a non-responsive supplier. He has been scammed, losing 30% of its advanced payment.

What can he do? Honestly, not much. He can call the police (in Chinese) and ask them to help handle it. However, in practice, it will be very difficult to deal oversea with this kind of crime. Some lawyers could eventually deal with this case. Still, I really want to stress on the fact that preventive measure should be taken to avoid scamming situations. Obviously, if the buyer had turned to SAOS or other professional agents to help check before the deposit, this suffering would have been prevented.

If you are not sure about your new Chinese supplier and you need to pay certain deposit to them beforehand, better to check before you do. SAOS offers a simple and small, yet professional and effective service called “Scam-Alert”, and our aim is to prevent you from being scammed. With all the checking via our local channels and even some official ways (e.g. Access the Chinese government database), we will provide you with our risk indicator index and accordingly, reduce your risk of being scammed.

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