Stopping China Supplier Fraud -- When In Doubt, Check Them Out

Every few weeks someone calls or e-mails us for legal assistance in dealing with a Chinese supplier who failed to deliver promised goods or delivered goods of such low quality as to be worthless.  Oftentimes, these requests are from an individual or small company that has ordered product only this one time from China.  Most of the time, the amount at stake (last week it was 300 dvd players) is too small to warrant attorney intervention.

The China Business Services Blog just did a post on how to prevent such fraud and its suggestion is brilliant in its simplicity.  The post is called "Trade Risk: Online Supplier Fraud," and the advice is (to sound a bit Johnnie Cochraneish), when in doubt, check them out: 

Every month importers around the globe who have sent payment to suppliers they�ve met online, only later learn they have been deceived and their payments have been lost. In most all such situations the so-called �supplier� is an unlicensed individual working from home who has placed �supplier� type websites online and is soliciting business or payments from unsuspecting overseas buyers.

Here�s a great, free way you can start to protect yourself. Tell the potential supplier that you have contracted with a third party inspection company to audit their company and/or factory and see the response you get from them. If they will not allow it, then in most cases you can be sure you are dealing with an unlicensed or shoddy entity. If they say that it is okay, then certainly have them checked out and see what you find.

This is great advice. 

Of course, if the supplier agrees to be inspected you will either need to proceed with an inspection or just take your (by now reduced) chances and go ahead and order.  However, if the supplier refuses an inspection or, more likely, seeks to dodge it, you will know the type of supplier with whom you are dealing and you can make the smart choice to not buy.