Yes, we are obsessed with this scam, but only because at least once a week someone contacts us who has fallen prey to it and we really do not like having to tell people that there is pretty much nothing we can do. And like we are always saying, we are seeing smart and sophisticated and internationally savvy companies falling for this one. The scam to which we are referring is when an American or European company (that’s what it usually is) sends its China payment to the wrong bank account, and if you are doing business with China that involves your company making payments to a Chinese company, you should know about it and be on guard for it.
For more background on this scam, check out the following:
- China Fraud. You Are NOT Immune To This One.
- China Fraud Season Starts Early This Year
- China Scam Alert: The Different Company Bank Account. Again.
- Cheated By China. Check Your Insurance.
In a recent post, 7 Tips to Prevent the “Different Bank Account” Scam. Renaud Anjoran at the Quality Inspection Blog sees this scam as occurring “mainly in two forms”:
A crime organization hacks its way into the supplier’s email system and sends invoices to customers. Tracking the people behind these bank accounts is usually impossible.
A salesperson uses her personal email account for work (as is very common), then quits but doesn’t say it to customers, and asks for payment to another bank account.
Most importantly, Renaud lists the following seven things companies can to do to avoid this scam, though he rightly notes that “there is no silver bullet” for doing so:
- Get to know your suppliers who speak English (if you don’t speak Chinese) and get your supplier’s landline phone numbers as that cannot be hacked. Call if you have any concerns.
- Get your supplier’s bank account information in advance and ask them to refer to “bank account information document” on their invoices, rather than listing out full bank details every time.
- Ask your suppliers to fax you their invoice and make sure the sending fax number belongs to your supplier’s company.
- Do a first small wire to confirm the account.
- Have a special procedure for confirming the company name. Note also “that paying a Chinese company in mainland China is safer for you” than paying them overseas in Hong Kong, Taiwan or elsewhere.
- Have a special procedure for confirming bank account changes. “Follow the same procedure as point 5, but also call several people in the company. They will understand your attitude if you tell them you are worried about the “different bank account scam” — they are also a victim when it happens to their customers.”
- Pay by Letter of Credit (L/C). If your supplier will allow it, pay by L/C.
Any more tips?