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Ancient China Business Scam. Back With A Vengeance This Season.

By Dan Harris on Posted in China Business

As a China lawyer, I hate Decembers. I love them because they are always one of our firm’s busiest months (which is true in spades this year), but I hate them because they are also the month when we get the most contacts regarding frauds and scams (which is also true in spades this year).  December is fraud month because that seems to be when Chinese companies seem to decide whether they plan to continue operating as a viable business or not and oftentimes those who choose “not,” will decide at the same time to go out with all guns blazing. December is also a great month for consumer scams coming out of China.

I hate getting the scam/fraud calls because 99 times out of 100, the best we can do for the caller is to tell them to be more careful the next time; it just does not make sense to pay a lawyer to chase a phantom. 

Here is a composite of the latest one we have been seeing:

You are a United States company that buys its product from China. You are really in a rush to get your product in time for the Christmas season so maybe you are not being as careful as you usually are. You get a call from someone who purports to be from your China manufacturer (and this person probably is). They tell you that they have changed bank accounts due to “tax reasons” or because of “a government loan” and ask you to please make your next payment to the new account. You want your product and you want it fast and so you do so. Then the company calls you a few days later and says it will not ship you your product until you pay it. You then call a law firm who tells you that you have a really really difficult case and who are you going to sue? The company who you never paid and can with a very straight face say they have no clue who called you about the new bank account and why the hell did you pay some person so much money who you do not even know? Or the person you just paid who probably barely exists by this point? 

Be careful out there.

  • John

    Your example happens all year, not just at Christmas. But, I’ve got to ask. What kind of person actually sends money to a bank account on the directions of an unknown person? Under these circumstances any “responsible” manager is going to verify the information with their Chinese contact. If this isn’t happening, it is time for the company to replace their supplier management team. Unfortunately, it is not illegal to be stupid.

  • LH

    My first experience being scammed in China was a very small-scale variation on yours.
    I walked into a crowded bar in Shanghai and pulled up a seat. A girl came over and asked if I’d like a beer. I said sure, how much? She said such-and-such. All I had was a 100rmb bill, so I gave it to her. She took it, turned around, and walked out of the bar. By the time I realized what had happened she was long gone and the crowd was too thick for me to chase her down. I looked around and there was a big sign on the wall that said “do not give money to anyone unless they are dressed like THIS (picture of waitress outfit).” :-\

  • MHB

    If the website has no address, don’t trust it. If it has an address, google it. At the least use google satellite view, best to use street view in the UK/US – there are plenty of scams here too! It only takes five minutes. You can find out a lot! Would you buy from a house in a residential area? Unless it’s handicrafts, don’t bother!

  • DaMn

    Ha ha! Awesome. Hilarious. Dumb dumb dumb dumb. KTV tonight boys!

  • Pingback: Scams by Chinese suppliers: what to do?

  • http://www.facebook.com/william.e.dix1 William Edward Dix

    You have to love the brazzenes of these criminals and the stupidity of the people that they sting. Make sure that you have reliable antivirus software installed to stop phishing and installation of foreign programmes.