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Beware of Frauds When Buying Raw Material

12 / 15 / 2017

Do you realize? You may be putting yourself at a higher risk of losing money to fraud when you decide to buy products like A4 copy paper, aluminum or copper wire scrap. In China, most of such trade scams take place in the areas of Hebei and Tianjin.

V-Trust uncovered several fraudulent companies in northern China when we were entrusted by the buyers to arrange factory audit or pre-shipment inspection services. The clients placed orders for scrap items (copper wire, aluminum etc.) or A4 paper. These suppliers, which were actually fraudster, normally would start to behave very suspiciously after knowing that there would be audit or inspection.

Some of them still confirmed the inspection schedules claiming that the goods would be 100% ready. But they refused to provide the clear address with location details. They insisted that they would pick up the inspector from the nearest station early in the morning. However, on the planned inspection day, they would not show up and kept the inspector waiting at the station for at least half day with different excuses. It would be the sunset time when they eventually took the inspector to a so-called “warehouse” in a remote village after our insisting.  In the “warehouse”, there would be only a few samples piled on ground for checking without any packaging or marking.

Unfortunately, it was too late when the inspection detected the problem as the clients already paid the deposit.

How to avoid fraud in your business? Kindly take these tips with you:

1, Stay alarmed if the price is obviously much lower than the reasonable market price. 

It might be the fraudster's first step to attract you to place order and then deposit.  Some buyers would find the contact person of the fake manufacturer disappear overnight after making deposit.

2.Verify the legitimacy of company profile of the potential supplier before you place an order. 

Fraudsters may operate without any registered company in a rented building. An on-site audit at the factory will help check if the factory really exists, if it's under operation legally.

3. Investigate the financial credit status of the supplier before T/T transferring first deposit to them. 

Some buyers may realize it's already too late after they know that their potential partner is actually a notorious fraudster with very low credit record. Avoid this by checking the supplier's credit grading and analyzing.

4. Use the shipping company chosen by yourself instead of by the supplier. 

One of our clients shared his unpleasant experience that, even though he witnessed himself the copper wire scraps being loaded and locked into the container, he received a container of bricks and stones, to his surprise. Then he found out it was because his supplier collaborated with the shipping company to switch the goods before shipment.


V-Trust team
Sunny Li
Bachelor Degree with Major in International Economics and Trades in GDUFS
2 years experience as an overseas sales representative
5 years experience in V-Trust as a Senior Account Manager

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