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The
following are some examples of international trade fraud and
advice on how to avoid it.
 Example
1 - obtaining samples fraudulently
When
an unknown buyer requests samples while hinting at a large
order, it is always wise to request at least a nominal payment
for the samples. If the buyer refuses to pay the mailing costs,
let alone the sample charge, you are advised to beware.
Example
2 - false promises leave the exporter with un-saleable stock
Swindlers
often try to convince a supplier that they are about to place
a large order on an L/C basis. They encourage a images manufacturer
to go into early production on their specifications, claiming
that is a test and promising early payment. However, once
production is complete the buyer goes back on his word, and
the images manufacturer is left with un-saleable stock. To avoid
this type of situation, when commencing business with unknown
buyers, it is safer not to agree to early production, no matter
how enticing the offer may be.
Example
3 - deimagesding discounts by invoking spurious conditions
in documentation
In
order to create artificial conditions for refusing to accept
goods or for reducing prices, some buyers deliberately include
vague terms in the L/C and later claim an intentionally "UNPAID"
clause. A variation is to place orders on L/C & D/A, but
to withhold payment for the D/A part of the contract.
Example
4 - sending illegal job hunters disguised as buyers
Some
company may send job seekers disguised as buyers. If you have
any doubts, consider the age and position of the person. Very
young or low ranking buyers should arouse suspicion. When
groups of buyers are encountered, the credibility of the company
should be thoroughly checked.
Example
5 - refusing payment for the second part of a shipment
After
gaining the trust of an exporter in the first part of a deal
by making immediate payment by T/T, the fraudster then refuses
to pay for the second part of the shipment. When working on
a T/T basis, once the shipment has been made, if the importer
refuses to make the payment, there is no way for exporter
to obtain the money. Therefore, if you think you're dealing
with an unreliable partner, the T/T method should be used
on a pro forma basis only.
Example
6 - uncollectable payment due to a financially unstable opening
bank
When
accepting an L/C from an unknown bank in an underdeveloped
country, be sure to check the credibility of the bank. If
there are any doubts about its financial condition, it is
advisable to request confirmation of the L/C from a reliable
bank.
Example
7 - refusing payment for goods received on credit by establishing
a new company
Some
importers deliberately shut down their existing companies
and set up new ones in order to avoid payment, leaving exporters
unable to collect money. If your partner suddenly changes
his or her company's name and places a big order on credit,
it is wise to check the company's legal status on the export
contract and shipping documents.
Example
8 - commission fraud in exchange for a bigger order
Luring
an exporter with the promise of a big order, dragging out
the negotiations to keep him hooked, and then demanding
a fee for brokering the deal at the last minute is another
common type of fraud.
Example
9 - securing goods at discounted prices by delaying the payment
All
transactions on credit should be avoided, no matter how small
the amount. Even though an importer may not initially intend
fraud, if the payment is delayed, the exporter may end up
having to negotiate a discount in order to get paid, even
though there is nothing wrong with the product.
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