Buyers Beware –Double Diligence

Tip from an English Speaking Lawyer in China:  Buyer Beware! Double the Due Diligence when doing business in China!

Fraud is always a concern when doing international business; but only sometimes does it actually reveal itself.  We say, double your diligence before you pay.

A couple days ago, a buyer voiced a  complaint to me.  The buyer told me that their supplier received payment for goods.  However, the supplier denied receiving the deposit and refused to deliver the goods as per the agreement. The buyer said, “I received the supplier’s email from the same address with the supplier making a  claim that their bank account was undergoing audit and asked us to make payment to an overseas bank account.  Later I found out, the supplier never changed their bank account!”

Watch out!  A typical hacking scam, within sourcing, goes like this:

• First, hackers will break into trading company’s email inbox and follow communication between clients.  
• A supplier’s email inbox is easy access to hackers.  
• Hackers will then find  an opportunity to send an email to the  buyer.  
• Most hackers will tell buyers, ‘they are using a new bank account and all the payment made should be directed to that account.’  
• If the buyer does as told without receiving confirmation from the supplier, by phone, regarding any changes, large amounts of money will probably be lost.

Remember: any changes that seem out of the ordinary to you, get phone confirmation from the supplier before adhering to new changes.

Worried about scams and bad suppliers?  Here are some tips for Due Diligence

Why do the scam artists target small scale foreign buyers?

Small buyer, high risk & E-buyer beware! Don’t fall into a scam trap!

Be wary of these two types of scams when sourcing in China