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Fraud Case Studies 13 - Be cautious of business impostor

Published: 16 Mar 2009 01:05:47 PST

Case Description:

I received a call from a man saying they have agents around the world and have seen our company on Alibaba. He said that we have the kind of products their customers are looking for. They sent me all the information about their business by fax and asked for 7% commission for their services. They then sent me a letter by mail with a printed letterhead containing the same info asking me to send a free sample and a deposit of about £790 to them so that they could show it to their big customers.

I paid a UK bank to do a background check of this company. The bank report indicated that the company was legitimate. I also searched the internet for information and found nothing suspicious. I felt safe, so I sent a total of £1000 (deposit and sample costs) to them by T/T. They always claimed their customers were going to place a big order with us sooner or later; however, we still haven’t received an order and they can no longer be contacted.

Case Analysis:

1) Beware of scammers who use the name of a real company to conduct fraud on the Internet. Scammers will pretend to be an agent or branch of a real registered company to convince you that they are serious. Don’t blindly rely on a Bank report.

2) Check their background information using your own due diligence. Go to local government or state websites to locate this company and then compare it with their contact information. If the company’s registered contact information is different from the information they have provided you, be extremely cautious. It is always necessary for you to contact the real company for further verification. For verification of UK companies, the following government website can help to locate registered companies’ information:

http://www.companieshouse.gov.uk//index.shtml

3) Never send payment upfront. In this case, it is strange that the supplier was requested to send payment before getting orders from the agent. Scammers know that suppliers are desperate to establish good and long-term relationships with big buyers. This allows them to make unreasonable requests, such as upfront payment. Please be vigilant if you encounter similar requests.