My friend and fellow contributor to the CSIC, Louise Kern of www.Glo-bis.com, works with the US Department of Commerce to help identify scams. Here is her short list of BIG red flags if you are contacted by an Asian buyer that wants to do business with you.
The Chinese company contacted you off the Web.
They have “Import/Export” or “Trading” in their name.
They want to conduct a very large volume of trade.
They insist your senior executive travel to China immediately to sign the contract with them in person.
They request money prior to the trip to pay for a reception in your honor, and/or, once in China, they request money or goods to grease the wheels with local officials.
They ask you to share a ‘notarization fee’ based on a percentage of the contract price.
They have been in business for less than one year.
They can provide no verifiable references.
Here is a case study of a UK company that was not yet aware of the red flags above: Beware of business scams in China –UK buyer tricked by Grace Profit Holdings Limited trading as Shenzhen GT Industries Co Ltd
For more tips and tutorials related to scams and due diligence, enter “scam” or “verify” into the key word search on our CSIC home page.
About the blogger
Mike Bellamy – author of “The Essential Reference Guide to China Sourcing” (chinasourcinginfo.org/book) and founder of PassageMaker Sourcing Solutions (www.PSSchina.com)