See the signs: Top tips for safeguarding your business against international scams

08 September 2021

While engaging international suppliers can benefit your business, it also comes with risk. As technology continues to develop and play an increasingly prominent role in daily operations, scammers are constantly finding new ways to strike. Protect your business by knowing what to look out for!

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Sharing experiences and information is an effective way to raise awareness and educate businesses on fraudulent activity so they can safeguard their operations and ‘see the signs’ before falling victim to a malicious scam.

While many Australian companies use international suppliers for varied reasons, it can be difficult to know an overseas market and which organisations are credible and reliable.

The Victorian Chamber has been helping our members source products and componentry, especially from China, for more than a decade. Here are some practical tips on how to identify early warning signs and safeguard your business:

  • Know your suppliers well before you enter into financial transactions with them. Are they manufacturers or trading companies? If required, engage an independent party to inspect them if you cannot visit them yourself.
  • Be extremely careful when you notice your supplier change their contact person, email address or banking details without letting you know or without a valid reason. Scammers may try to make these changes as discreet as possible - pay attention to details, call to verify when it happens.
  • Never make payment to a personal account, or account with a different company name. It is illegal in Australia and in China also.
  • Be careful on certain B2B platforms, your information may not be safe.
  • If you sense anything suspicious, contact the Victorian Chamber immediately and we can investigate further. Our staff in Shanghai understand Chinese business norms and have no language and culture barriers.

This year, a Victorian Chamber member who frequently purchases equipment from China contacted our international trades desk in Shanghai after noticing some unusual activity when placing their latest order.

The Director of the business saw a red flag with the banking details given to the company by the supplier, the format in which the proforma invoice was sent - and was also wary of the behaviour displayed by the individual who was chasing his company’s deposit payment.

After examining extensive email trails, the Victorian Chamber’s Shanghai office concluded something was not right and proceeded to conduct a supplier verification check.

The team confirmed the Chinese supplier in question was in fact a legitimate manufacturer; however, they had fallen victim to identity theft. The banking details presented to our member belonged to a completely different entity located 500 kilometres away.

The scammer continued to assure our member that it was an affiliated company.

Even more concerning, as soon as our member requested a proforma invoice from the supplier, the supplier’s email address immediately changed to a Gmail account with an identical signature, and in the same format as the legitimate company’s invoice.

While our member said he had noticed the different email address, he also admitted that “it didn’t click at the time,” as the communication with the suppliers on the Gmail address had seemed “quite normal.” The scammer continued to assure the Director, saying: “our company is reliable, and our clients are our utmost priority…”

Via the local Chamber of Commerce, the Victorian Chamber team was able to verify the identities of the real supplier, its export manager, and the company managers. The business and personnel were all above board.

After discussing the matter directly with the verified Chinese supplier, the team discovered that the scammer had also stolen the Australian company’s identity and used another Gmail address on the same day to start communicating with the Chinese supplier. A double con!

The scammer, acting as the Australian client, requested the supplier send him the proforma invoice, photoshopped it with different banking details and forwarded it to our member for payment.

Had our member not sensed suspicious activity and approached the Victorian Chamber for help, they most likely would have lost their USD $5,000 deposit payment.

Although scammers may not always steal large amounts of money from their victims, the interruption and distrust it creates can deter organisations from doing business overseas or trying to expand and enter international markets.

Businesses are already doing it tough through the COVID-19 pandemic, and being dealt another blow via scammers and malicious attacks is the last thing they need.

The Victorian Chamber’s China sourcing team has many years of experience assisting Victorian companies to source products, componentry, and inputs from China. We have in depth knowledge of the Chinese manufacturing industry and have unique insights into the strengths and weaknesses of Chinese suppliers, as well as the best way to work together.

With our extensive Chamber network and local industry knowledge, we are well placed to help you identify reputable manufacturers and achieve your sourcing objectives.

The China sourcing team at our Shanghai office can closely monitor your product manufacturing process and perform a range of inspection services ensuring the integrity of the process. Chinese suppliers are usually more responsive and co-operative if they know you have a Chamber representative in China. 

Contact our International Business Development Manager, Eddie Zhao, at ezhao@victorianchamber.com.au or 03 8662 5234 for expert advice and peace of mind throughout your sourcing process.

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