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Telegraphic Transfer (T/T) is the most common way to pay manufacturers in China, and elsewhere in Asia. That said, Telegraphic Transfers are irreversible once the payment is made, and the bank is not responsible for ensuring that you don’t get scammed or pay to the wrong account.
In this guide, we explain what can go wrong when paying Chinese suppliers by Telegraphic Transfer, and what you can do to prevent common issues.
Found a supplier online or at a trade show but not sure if they’re everything they claim to be? Fortunately, importers can get assistance from one of many supplier verification services to better understand if a Chinese company is a legally registered entity.
In addition, a supplier background check or verification can also answer the following questions:
Is the supplier a manufacturer or trading company?
None of these scams are unique to Alibaba.com. On the contrary, Alibaba.com verifies all Gold Suppliers and offers far more supplier data than any other B2B supplier directory.
Alibaba.com is in many aspects the safest way to source products in Asia, as long as you have a risk management process in place.
That said, Alibaba cannot monitor every single email and WeChat conversion between suppliers and buyer’s on its platform. There are rogue employees out there, and hackers breaking into suppliers email accounts.
Small businesses importing from Asia get scammed everyday. You’ve heard the stories, so that probably doesn’t come as news. Most people would assume that there is no recourse, if you are scammed by a fake supplier.
But, I know two Chinese lawyers that don’t agree.
This week, we publish a practical ‘how to guide’ for reporting scams directly to the Chinese authorities and getting your money back – co-authored by Mr Kai Xue and Mr Li Xianun – both lawyers working for DeHeng Law Offices in Beijing.
In this article, Kai and Li explains how you should deal with fraud situations, including how you should manage the scammers and how to file a police report (that will actually be accepted).
Kai Xue and Li Xianyun, please tell us a bit about your backgrounds and roles at DeHeng Law Offices
Kai Xue (Left photo) is a transactional lawyer advising mostly in cross-border finance and outbound mergers and
acquisitions. Li Xianyun (Right photo) is a litigation lawyer representing clients in general commercial arbitration or litigation, including disputes stemming from foreign trade.
All too often I hear Buyers making supplier selections on highly arbitrary factors, primarily the responsiveness the sales rep on the other side. Such factors are largely irrelevant. A supplier selection without the right data is often the root cause of quality issues further down the road. In this article, we explain how you can perform a China Company Verification by analyzing their documentation. This procedure can be managed from your office, and doesn’t require an on site visit.
During the last 6 months, we have received several reports from importers being defrauded by Chinese freight forwarding companies. Since mid August, the frequency of these shipping scam reports has increased rapidly. Thus, we decided it was time to issue a warning to our readers, and explain how you can best protect your business from scammers.
The scammers exploit the Bill of Lading
Let’s begin by introducing you to how the shipping process usually works, when no scammers are involved. Most importers buy according to FOB (Free on Board) terms, which means that their Chinese supplier takes care export clearance and delivery to the Port of Loading (e.g. Shanghai or Shenzhen).Continue reading Shipping Scams In China: How to Protect Your Business
Afraid of losing (all) your money when you’re importing from China? You should be, and you’re not alone. Paying frauds are one of the most common forms of scam, and they are targeting small to medium sized businesses sourcing products on Alibaba.com and other online B2B platforms. In the last few years I’ve seen small importers losing hundreds of thousands of dollars in this type of scam.
The first time I had to handle a payment fraud case was in late 2011. It was late on a Friday evening and I’d barely opened my first beer when I received a desperate phone call from a long term client. She had, without telling us, contacted a suppliers, in Qingdao, selling food supplements. They had previously imported the same product from this supplier and my client experienced no problems whatsoever. This time she wasn’t so lucky. The supplier stated that they did not receive a single dollar from her, something which made my client nervous considering she had transferred around US$ 40,000 two weeks before she called me.Continue reading Payment Fraud in China – How to Avoid Going Bankrupt
Hey there, I’m Fredrik!
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