Scary Import Stories and How to Avoid Them

Avoid Import Export Scams

Though the internet has made it easier than ever to buy and trade across international lines, it’s also increased the likelihood of being scammed by an international con artist. Scams can take many forms including charging for a product that is never sent or sending a suboptimal product after the business deal is complete. Fortunately, it’s very easy to avoid online scams by educating yourself on the most common tactics used by online scammers and how to avoid them.

Alibaba Supplier Scams

Chinese B2B platform Alibaba has compiled a list of five case studies showing the most popular types of online scams and common techniques that scammers use. Based on their recommendations, here are several ways to avoid Alibaba scams and other online scams from B2B trading websites.

How to avoid import-export scams?

How To Avoid B2B Trading Online Scams - Illustration

    • Avoid unsolicited offers

      If a company sends you an unsolicited offer to purchase a product that you did not request, it is the first red flag. Legitimate companies usually focus their efforts on RFPs (Request for Proposals) or responding to requests for products on trading platforms. While it’s not unheard of for a company to solicit business by email, do your due diligence before engaging a potential client or customer.


    • Verify company information

      One of the most popular tactics that scammers use to deceive B2B customers is impersonating or gaining fraudulent access to a well-known supplier or distributor identity. The easiest way to find out if you are dealing with a scammer or legitimate seller is to verify that your B2B contact’s information matches what is available on the company website. If in doubt, contact the company directly via their Customer Service phone number or contact form, and a representative can put you in touch with someone who can verify the company’s status.


    • Verify the identity of sales agents

      Many scammers can successfully gain access to company data, including email addresses and contact info that seems legitimate, although they are not an employee of the company. If you have any doubts, try to verify the identity of an individual sales agent through LinkedIn or the company website. If you cannot, follow the steps above to contact the company and confirm a particular agent’s identity.


    • Compare web inventory to sales offers

      Did a textile company offer to sell mobile phones at a deep discount? Be wary of suppliers who offer a product that differs from what is available on their website. Compare the website’s inventory to products that the company is offering to sell.


    • Be wary of unusually low prices and discounts

      Companies may occasionally offer a deal for a product at a very deep discount. Such products may be stolen, smuggled, or otherwise obtained illegally, meaning the company did not pay anything for the product at all and is selling it for a marginal profit. Keep in mind that most countries have laws against purchasing or being in possession of stolen goods. If you cannot verify the origin of a product and it’s offered at an unusually deep discount, it’s best to avoid the sale.


    • Use escrow payments

      If you are working with a buyer or seller for the first time, use a site that offers escrow payments or protection for both the buyer and seller. As a buyer, your payment will be held in security by a third party company until you receive and are satisfied with the product. As a seller, if a buyer is unhappy with the products or goods for any reason, the escrow company will hold the buyer’s funds until the goods are returned to you in original condition. Though escrow payments take longer than usual, for buyers and sellers new to B2B trade it’s certainly worth it to ensure your peace of mind.


    • Read Reviews

      The easiest way to find a scammer is to search “company name scam” on the internet or read reviews on a review website. You may also see reviews on third-party B2B trading websites, such as Amazon, Alibaba, and eBay. Though finding negative reviews is a red flag, finding no reviews at all is also a red flag. Many scammers create fake companies to sell products. Each time they begin a new scam, they create a new phony company. If you cannot find verified reviews of a company online and they are not recommended or vetted by a trusted resource be careful about conducting business with them.


    • Don’t pay additional money to “solve problems”

      Most scammers require individuals to pay some amount of money upfront. Usually, the scam begins after the first payment. Scammers will create a seemingly legitimate problem that supposedly needs more money to solve. This problem could be a customs import fee, additional shipping or processing fees to get the product to you, or a request to purchase additional products. Unfortunately, too many buyers give into the seller and offer additional funds for fear of losing their initial investment. At the first request for more money, it’s best to avoid sending additional funds and report it to the third-party website you are using, or the appropriate authorities in your country.


    • Request or order samples first

      A widespread scam in the electronics industry is selling faulty or nonfunctional products. In this case, the seller will send the exact product that you asked for, which will be of inferior quality and may not function as intended. The best way to avoid this scam is to keep your first few orders small when working with new suppliers. Inspect the new products meticulously before placing additional orders.


    • Search for Duplicate Seller Accounts

      If you are using a third-party site like Alibaba, eBay, or Amazon, check the website for duplicate accounts for the same supplier. This tactic is especially common if you are working with a popular and well-reputed seller. If you notice multiple accounts from a single supplier, report it to the site immediately. Amazon, in particular, has cracked down on numerous seller accounts and will restrict access to companies that use multiple accounts.


    • Don’t Agree to Use Unknown Delivery Companies

      When working with new suppliers, stick to large shipping companies, such as FedEx or UPS. A favorite tactic that scammers use is telling buyers that they are going to use a small, local, shipping company. The seller then provides the buyer with a website link and tracking number. The scammer will tell the buyer to submit payment when the tracking website shows the product has been shipped or has arrived in the buyer’s country. Unbeknownst to the buyer, the seller has created this scam site and is controlling the shipping updates. Once the money is received, the website for the delivery company disappears.


    • Search the WhoIs Database

      To ensure that you are working with an experienced and legitimate company, verify the company’s website using the WhoIs database. Specifically, look at the date that the website was created. If the website was registered just a few days or months ago, be careful. Most scammers develop new websites for each scam.


  • Work with verified sellers only

    Certain sites like Alibaba verify accounts to ensure that sellers are legitimate. This verification can take different forms such as verifying the company’s business address and licenses or conducting an on-site visit to verify that the company’s business operation exists at the listed address.

How to report a scam

In the unfortunate event you are scammed out of money, it is necessary to report it. Not only is it possible that you may recoup some of the funds, but your report may be instrumental in bringing the scammer to justice and preventing others from being scammed. The following are a few ways to report scams.

Trading Website

If you found the seller or made initial contact through a third party website, you should contact a representative of the website so that they can close the seller page. If they manage funds via their website (for example, Alibaba’s Trade Assurance), they may be able to redirect your funds before the scam artist can access your payment.

Bank or Payment Website

If you made a payment through your bank, contact your bank to issue a stop payment on the check or wire transfer used to make the payment as soon as possible. Wire Transfers are usually processed once a day, so if you initiated the payment after the cut off time, you might have time to stop it.

In the unfortunate event that the payment has left your bank, contact the seller’s bank that is set to receive the money. Make sure to prepare all relevant communication regarding the sale, including emails from the trading website documenting that the seller’s profile has been closed. In some cases, the bank may be able to provide you with the official name on the account that may help you track down your culprit.

Police Department

Don’t underestimate the value of filing a police report with your local police department. In fact, filing a police report may help you when contacting the trading website or your bank. Third party companies may be willing to provide additional information to the detective investigating the case, such as the scam artist’s last known address or contact phone number.

Local Investigator

If you’ve been scammed, chances are it’s by a person in another country. In these cases, a local investigator may be able to help you obtain the missing information that you need to track down the scam artist. In one online scam case, a local investigator was able to go to the seller’s supposed “business address,” where he discovered that the address was an apartment inhabited by an elderly woman.

In hiring an investigator, you want to make sure you’re not scammed again. Contact your local embassy and request a list of local private investigators. Embassies usually maintain a list of reputable lawyers, doctors, and other service professionals for citizens in the area.

How to report a scammer

If you are dealing with an internet scammer, it’s important to remember that most countries now have an official commission or body dedicated to online scams. In the US for example, the FBI and FTC investigate internet crimes. Here are a few organizations that handle online scams in different countries of origin.

  • US – Federal Trade Commission (FTC)
    • In the US, if you deal with an international online scam or hoax of any sort, you can make a formal complaint with the Federal Trade Commission (FTC).
  • UK – ActionFraud
    • In the UK, ActionFraud manages cyber crimes. You can file a report using their online fraud reporting tool, or you can make a statement by phone.
  • South Africa – Internet Service Providers’ Association (ISPA)
    • In South Africa, online crimes are reported to the Internet Service Providers’ Association. There are different numbers to contact for different types of crimes. The ISPA office writes that it’s crucial to “follow-up and create pressure” if you want to see the matter resolved.

Unfortunately, internet scams and crimes are not always investigated immediately, particularly if there is only one victim. However, it’s imperative that you report your crime because the number of complaints will increase the likelihood that it will be investigated. It’s doubtful that you are the only person that has been scammed by a particular scam artist. It’s important to note that when a scam artist is caught, there have usually been multiple complaints.

WaystoCap Can Help You Avoid Online Scams

If you are new to importing and exporting and B2B trade, the best way to avoid scams is to use a trusted partner. WaystoCap helps individuals and businesses conducting B2B trade within Africa. If you need to find a trusted supplier, are interested in finding a partner to import your product, or need help with import/export regulations, WaystoCap can help. Sign up as an importer or exporter on the WaystoCap platform to start conducting B2B trade today.

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