Opinions, knowledge and resources from China Checkup's expert contributors

Chinese Companies Have To Deal With Scammers Too

by Matt Slater May 22, 2014

Chinese Companies Have To Deal With Scammers Too

Many people doing business with Chinese companies are aware of the danger of scams. Less people consider the possibility, however, that Chinese suppliers also face the danger of being scammed.

In this interesting forum post, one Chinese supplier takes the time to warn others in the community about the various tricks and schemes used by scammers who prey on Chinese companies doing foreign trade.

We’ve translated and edited the post here, as it makes for interesting reading, and reminds us that Chinese companies face many of the same problems as their counterparts abroad:

Foreign Trade Scammers

Those of you working hard in the foreign trade industry were presumably rookies at one point, carrying the flag to faraway places and ending up getting thrashed by your clients. Many trials and tribulations await you on the road to becoming a respected foreign trader, so here I’ll give some pointers on how to overcome them and put a few more tricks up your sleeve.

Features of Emails From Foreign Trade Scammers

  1. Not displaying interest in the actual products.
  2. Being uninterested in price.
  3. Not requiring samples.
  4. Focusing on the method of payment.
  5. Focusing on credit.
  6. Focusing on the bank.
  7. Using Yahoo, Gmail or Hotmail email addresses.
  8. Frequent use of the following words: Sir, urgent, payment terms, bank, remit, confidential, check.
  9. Long emails that seem detailed but are actually full of vacuous small-talk.
  10. Phishing emails are particularly common at the moment and beginners often fall for them.

They often start by sending enquiries on B2B websites, saying that they are very interested in your products and would like to buy them in large quantities. They ask you to quote a price and make all sorts of requirements on the details.

The next day (the more adept scammers wait about a week before replying) they reply saying they have a product type and want to know if you can produce it. Then they give you a URL, which is a phishing site which gets you to enter your email address and password.

They automatically record these and then they can see all of your emails, and some of them will set up automatic forwarding of emails to their own account which also deletes the originals in yours. Then they’ll contact clients using your name. So, when the website asks for your email address and password, the phishing rod is waiting to hook you.

These sound like fairly standard scams that we also receive on a regular basis. It’s inevitable that scammers are targeting both sides of foreign trade deals alike: buyers and sellers.

Interestingly, the forum post then moves on to what it describes as “pitfalls” when doing foreign trade deals. It gives a list of commonly overlooked contract clauses and other parts of a deal that novice traders often overlook, such as payment terms, shipping terms, penalties and so on.

Reading from the mindset of a buyer, the way the post describes perfectly reasonable terms as “pitfalls” is a little strange. For example, it describes letters of credit that require proof of shipping before payment is made as a kind of “pitfall”. To a buyer, that seems like a very reasonable term!

It’s interesting that sellers may see these kinds of terms as irritating pitfalls to be wary of. The post even makes out that the people putting them into contracts and terms are “hiding them deeply” and not letting them “leak out early”.

The post is certainly something of an eye-opener on the opposite perspective of forming trade deals.




Matt Slater
Matt Slater

Author

Hi there, I'm Matt, the founder of China Checkup. Originally from the UK, I am now based in Brisbane, Australia.

Frustrated by the scarcity of concise, high-quality and timely information about Chinese companies, I setup China Checkup whilst living in Shanghai in 2013.

My team are proud that China Checkup's company verification reports have now helped thousands of clients from all corners of the world to do business in China more safely.

  

 


Related Articles

China City Tiers - An Overview
China City Tiers - An Overview
If you've ever visited China or researched the Chinese market, you will probably have heard of the concept of "China city tiers". Brought about by the rapid growth of Chinese cities over the last 20 years, labelling a...
Read More
Chinese Company Ownership Chart - An Introduction
Chinese Company Ownership Chart - An Introduction
This article has been written to introduce our Chinese Company Ownership Charts - a popular element of our company verification reports. Introduced as a feature in our "Pro" & "Full Scope" company verification rep...
Read More
China Free Trade Zones - Where Are They?
China Free Trade Zones - Where Are They?
Since establishing the first China Free Trade Zone in Shanghai in 2013, Chinese authorities have moved swiftly and established a further 10 zones, with even more planned. Although the Shanghai Free Trade Zone is now f...
Read More


Also in Safer, Better Business in China

5 Ways China Company English Names Can Be Misleading
5 Ways China Company English Names Can Be Misleading

by Matt Slater September 19, 2018

We often come across China company English names which we feel are misleading.

They are misleading for a number of reasons - some accidental, some deliberate, some cynical - but the root cause is that companies from Mainland China are registered in the Chinese language, not in English.

Here we give some background on China company English names and introduce the 5 ways in which we find they can be misleading.

Continue Reading

What is the China Customs Enterprise Classification System?
What is the China Customs Enterprise Classification System?

by Matt Slater September 12, 2018

China Customs Enterprise Classification is a system used by China Customs to grade companies which engage in foreign trade.

Following a long implementation phase, a new classification system was confirmed in May 2018. It had been updated primarily to reflect China's broader implementation of a nationwide social credit system in recent years..

Under the new China Customs Enterprise Classification system, companies are no longer ranked AA, A, B, C or D - there are now 4 different categories which are introduced in this article.

Continue Reading

Which Chinese Currency are in Circulation?
Which Chinese Currency are in Circulation?

by Matt Slater September 03, 2018

If you're travelling to meet or dealing with a Chinese company it is worth bearing in mind that there are several different types of Chinese currency.

Depending on whether your business is in Mainland China, Hong Kong, Macau or Taiwan you could well need to be looking at 4 different exchange rates. 

Here we introduce each of the 4 Chinese currency currently in use in "Greater China" - the Renminbi, Hong Kong Dollar, Macau Pataca & New Taiwan Dollar.

Continue Reading