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  • http://twitter.com/theeastasiaco East Asia Co.

    It boggles my mind how anyone would pay an invoice – unexpected or not – without first checking with the vendor who had sent the invoice, as Dan says one should do. This should be SOP for Purchasing Depts. All it takes is an email or a skype call.

    • http://www.chinalawblog.com/ Dan Harris

      Here’s the really scary thing though. What is happening now is that the invoice comes from the vendor. The only thing that has changed is the bank account to which the funds are wired. Who notices such a change? I sure as hell don’t. We get an invoice from someone and we owe the money and it says to wire the funds to bank account x, I tell our office manager, wire the funds. In fact, I don’t even look at the bank account, and even if I did, how the hell am I going to know that this invoice’s bank account is different from the last one?

  • Peter

    We had a client that lost 50000 USD when they paid both the deposit and balance to an account in Hong Kong where the beneficiary didnt match the seller on the PI.. luckily we didnt process this order and where only hired after the client realised what had happened. Also happened to a Chinese friend of mine who had a European client paying to an offshore account that didnt match his company name, he lost about 30 k USD since the products where already half way to the EU.

    By ensuring that the beneficiary name is matching the sellers name on the PI, Sales Agreement and business license it should be very simple to avoid these kinds of payment frauds, or am I wrong?

    A bigger issue, in my opinion, would be, what seems to be legit, companies that keep offshore entities in order to receive USD. It should be rather simple for a company to simple sidestep the buyer by denying that they ever received the payment, considering that the manufacturing company in Mainland China is not even stated as seller in any order document. If this doesnt work they could also shut down the offshore company and register a new in an employees name. Or am I wrong?