how to avoid international fraudCheck the credentials of potential partners before engaging in business
Be sure to check the background of all potential partners before engaging in any business over the internet.
Payment Letter of Credit (L/C)
A Letter of Credit is the preferred payment method. However, there is some possibility of fraud due to incorrect or forged shipping documents. Minimize the potential for fraud by contacting the L/C issuing bank.
Be sure to check the L/C number, opening date, opening place, name and address of the issuing bank, shipping date, valid date, loading and unloading port, applicant, period of presentation, amount, as well as details of transshipment, partial shipment, etc.
Avoid T/T (Telegraphic Transfer payment)
For Buyers : It is unwise to accept an overseas supplier's request for pre-payment. In most cases, a request for T/T payment involves attempted fraud.
For Sellers : it is unwise to agree to accept payment from an overseas buyer after they have received products. Once a buyer has received samples or products without payment, it is very difficult to get them back.
Avoid Payment by Western Union Most of the fraudulent cases involve payment via Western Union. After a buyer sends funds, the receiving breaks contact and party disappears. You cannot trace the real name of an account holder with a wiring service such as Western Union.
Make a clear contract
You should make a trade contract and keep it for a specific period to prevent argument. The contract should include sales conditions, payment method, an arbitration clause, quality inspection, etc.
Stay in frequent contact with business partners
Call the company's phone number and check that the person you are in touch with actually works for the company. Be suspicious of any trader who uses only an e-mail address and cell phone and is reluctant to reveal a telephone number. Maintain frequent contact and ask in detail about price, quality, payment method, contracts, etc. Genuine traders will respond positively and promptly. Most successful internet traders maintain close contact with business partners and reply promptly to inquiries.
Check Contact Information E-mail Address : Do not rely on e-mail to contact a business partner. Even if the company has its own domain name, you may not be able to trace its owner. Fax Number : Look out for companies that use the same number for telephone and fax. They are likely to be small businesses. Also, it is best to avoid companies that list only a fax number in their contact information. Website address : An impressive website does not guarantee the honesty or existence of a company. Don't be lulled into a false sense of security. Samples For Sellers : Request a nominal payment for samples. When an unknown buyer requests samples while hinting at a large order, it is always wise to request at least a nominal pre-payment. For Buyers : Request samples to check the quality of product. Order a sample before committing to a purchase order to be sure that the product meets your expectations. Don't forget to pay for samples.
