Many anecdotal stories can be found on the internet for import export scams, often involving importers making payments for products that do not exist.
Importers and exporters need to take a cautious approach when building new relationships with customers and suppliers.
Due diligence is key
Most import export complaints involve customers who have paid cash in advance then either never received the goods, received partial shipment or received something other than what they thought they were buying. In the majority of these cases the buyer did not take the appropriate steps prior to sending the payment to verify and screen the company they are doing business with.
Methods to avoid scams and fraud, therefore creating a safe trading environment
Verify any new customer or supplier with their local Chamber of Commerce
Use the internet to investigate the company:
Search the company’s website address, business name, phone numbers, email addresses, and any other data to see if you can find any complaints or feedback about them.
Always verify bank details!!
Before paying any company for the first time verify the bank details with a source in the company different to the original source
If the bank details of an existing supplier change always verify the change with a second source in the company
Aim to avoid advance payments
And it doesn’t matter if this is not the first time you will be conducting business with a company.
Use a payment method that offers better protection for both parties, such as Letters of Credit or CAD terms.
Ask for business references
When you receive the references contact them – follow up with the referee. Ask them to share their some relationship history with the company.
Ask for a product sample before placing an order
Use the sample to validate product match and quality. Don’t just assume you will receive what you are expecting without verification.
If practical, visit their business location
or have someone you know visit their business to verify their claims.
And never lost sight of the old adage – if it seems too good to be true, it probably is!
If the prices being offered are significantly lower than market rates be very cautious when proceeding.
Always remain vigilant!