Unfamiliarity with your product's application
Limited details or unwillingness to provide information on the project in which the materials will be applied or the end user
Discrepancies on business cards that cannot be clarified
Incomplete information on the purpose of the ‘fees’ outlined in the contract
Inability to specifically explain the regulations or government entities that are allegedly imposing certain fees
Offers to sell certain internal government information or sensitive commercial information
Rented cell phones
Location of office space in residential areas
Less than one year of operation history with very young leadership
Insistence on paying for a banquet in cash to the Chinese entity prior to concluding contract
Cash requested for cost of hosting a banquet is far in excess of typical costs. [While banquets are a traditional business activity, the U.S. entity can arrange for a banquet through their hotel. While costs vary, a nice event for $10 at a local restaurant (non-western hotel) might run $200]
Unusually large product volume or urgency to purchase
Insistence that the contract is only legitimate if signed in China
Requests for an invitation letter to visit the U.S. facility prior to any substantive communication about purchase terms or exchange of company background information
Insistence upon attending a banquet prior to concluding a contract later in the evening[referring to getting the foreigner intoxicated in an effort to finalize contract terms more favorable to the Chinese buyer]

For more red flag indicators, click here

Protect Your Business!

Request a copy of the business license, check validity of address and phone number, license validity date, name of registered representative, etc.
Request a copy of the company's certificate of import/export authority
Verify the company's international trade experience and avoid firms that have less than two years of experience
Seek multiple references and check them. Request referrals to both suppliers and customers
Order an International Company Profile Report through the U.S. Commercial Service
Accept only secured forms of payment such as letter of credit or direct telegraphic transfer (T/T or wire transfer)

Report Fraud to the FBI

If you believe that your company has been a victim of internet credit card fraud you can file a complaint through the FBI Internet Crime Complaint Center at http://www.IC3.gov . IC3's mission is to serve as a vehicle to receive, develop, and refer criminal complaints regarding the rapidly expanding arena of cyber crime.

China Wire Transfer Fraud Alert!

Print | Last Updated: 8/4/11 5:27 PM