The following are some examples of international trade fraud and advice on how to avoid it.
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.
Swindlers often try to convince a supplier that they are about to place a large order on an L/C basis. They encourage a 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 manufacturer is left with unsaleable 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.
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.
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.
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.
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.
New to Worldtre