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How to avoid
Internet Fraud
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| Check the credentials of potential partners
before engaging in business | |
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| Be sure to check the credentials of
all potential partners before engaging in any business over the
internet.
You can check the backgrounds of established manufacturers or
wholesalers with trade institutes, local or online credit agencies,
or online services such as D&B. Unfortunately, few resources are
available to verify the legitimacy of newly established businesses.
Be especially vigilant when dealing with new businesses. |
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Letter of Credit is the recommended payment method
 Letter of Credit (L/C)
| A Letter of Credit is the
preferred payment method. However, there is some possibility
of fraud due to incorrect or forged shipping documents.
Minimize the potential for fraud by contacting the L/C issuing
bank.
Be sure to check the L/C number, opening date, opening
place, name and address of the issuing bank, shipping date,
valid date, loading and unloading port, applicant, period of
presentation, amount, as well as details of transshipment,
partial shipment, etc. |
Avoid T/T (Telegraphic
Transfer payment)
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For Buyers : It is unwise to accept an overseas
supplier's request for pre-payment. In most cases, a request
for T/T payment involves attempted fraud.
For Sellers : it is unwise to agree to accept
payment from an overseas buyer after they have received
products. Once a buyer has received samples or products
without payment, it is very difficult to get them
back.
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Avoid Payment by Western Union
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Most of the fraudulent cases reported to Lovgo involve
payment via Western Union. After a buyer sends funds, the
receiving breaks contact and party disappears. You cannot
trace the real name of an account holder with a wiring service
such as Western Union.
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| You should make a trade contract and
keep it for a specific period to prevent argument. The contract
should include sales conditions, payment method, an arbitration
clause, quality inspection, etc. |
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| Stay in frequent contact with business partners
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Call the company's phone number and
check that the person you are in touch with actually works for the
company. Be suspicious of any trader who uses only an e-mail address
and cell phone and is reluctant to reveal a telephone number.
Maintain frequent contact and ask in detail about price,
quality, payment method, contracts, etc. Genuine traders will
respond positively and promptly. Most successful internet traders
maintain close contact with business partners and reply promptly to
inquiries. |
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| Check Contact Information
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E-mail Address : Do not rely
on e-mail to contact a business partner. Even if the company has its
own domain name, you may not be able to trace its owner.
Fax Number : Look out for companies that use the same
number for telephone and fax. They are likely to be small
businesses. Also, it is best to avoid companies that list only a fax
number in their contact information.
Website address : An impressive website does not guarantee
the honesty or existence of a company. Don't be lulled into a false
sense of security. |
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For Sellers : Request a
nominal payment for samples.
When an unknown buyer requests
samples while hinting at a large order, it is always wise to
request at least a nominal pre-payment.
For Buyers : Request samples to check the quality of
product.
Order a sample before committing to a purchase
order to be sure that the product meets your expectations.
Don't forget to pay for samples. |
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| Be Wary of Over-generous Offers
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| Be wary of potential partners
who offer a particularly high or low price in the first
instance. It is easy to be tempted by such offers, but they
are most often attempts to defraud. This method is most
commonly employed in the mobile phone and computer-related
business. |
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