Email provides business owners with a powerful and convenient tool to communicate with suppliers half the world away. Unfortunately, it also gives hackers, scammers and other malicious persons an easy way to lure their victims and make money off them.
Many such victims are importers attempting to purchase bulk orders from a Chinese supplier. Now, while there are numerous safe and reliable Chinese suppliers, there are also the fraudsters who give these companies a bad name. Since this really happened to our own customers last year, we would like to write this blog to remind importers to take highly attention before wiring the payment to their suppliers.
How Such Email Scams Work
There have been a large number of cases out of China of scammers obtaining the email addresses (and passwords) of both importer and the Chinese supplier company. They then create similar email addresses for both importer end and supplier end. They use the fake supplier email address to talk to you, the importer. They use the fake importer email address, similar to your email address, to talk to the suppliers.
Remember they are tracking your emails and those of the suppliers in the meantime. So when you send an email to the real supplier, the fraudsters use the similar fake supplier email to send you a reply, pretending to be the person you wrote to. They do the same with the suppliers as well.
They are usually very responsive and manage to gain your trust. They may also offer you great discounts on the bulk order and even accept a minimal down payment (around 20% to 30% usually) so that you finally decide to make a purchase from them.
As soon as you bite the bait and ask for a bank account you can wire the money to, they will tell you that they have changed their bank accounts. They will give you a new bank account which is in the name of an individual or another company altogether.
They will give you several reasons for this. The most common reasons heard are that they have a different bank account for ‘tax reasons’. Or else they will tell you that the company that holds the bank account owns the supplier company. If you pay, you are sunk. You will never receive your shipment and there is no way you can ever claim that money from your bank even if it’s a scam.
Things You Should Know About Avoiding Scams
While almost anyone can have their email addresses and passwords stolen these days – after all not even governments are safe – there are some steps that you can take to make sure that you are indeed paying for goods that you will receive.
1. Spot fake email addresses quickly
Checking email addresses works some of the time, but not always. Many suppliers have their own websites and domains, so their email addresses will usually end with their domain name. For instance, a company named ABC with its own website at ABC.com will usually have an email address that goes like xyz@ABC.com.
But many a legitimate Chinese suppliers and do not have their own website or domain, even if they are reputable suppliers. In that case, their email addresses are usually on free email clients like Hotmail, Yahoo, Gmail etc. So they may look like this: firstname.lastname@example.org, email@example.com, firstname.lastname@example.org or email@example.com etc.
This makes it easy for scammers to carry out their cheating. They set up a similar email address so you often can’t tell the difference at a glance. They can simply mix up the word order in the email to make it look similar. For instance, an original supplier email address that is firstname.lastname@example.org can be used to create a fake email ID such as email@example.com. If we don’t look carefully at the email address from which we receive the correspondence, it is easy to get tricked into thinking we are still dealing with the original suppliers.
2. Confirm that the supplier has indeed changed bank accounts
While it is not always possible to visit the suppliers with whom you are dealing, you can certainly contact them to find out whether they have indeed changed bank accounts. Start by
faxing them to find out if they have changed bank accounts. To be doubly sure, also follow up by phone. And check email addresses for any discrepancies.
Always take care when you wire money to strangers, even if they are suppliers that you know and have dealt with before.