HOW TO: Outsmart international scammers

Thanks to a global online marketplace, finding international suppliers and purchasing goods for import is quite easy. Unfortunately, with a steady increase in online sales has come an increase in international sales scams targeting uninformed, optimistic buyers.

Buyers are not, however, totally vulnerable. There are a number of options importers can employ in order to protect themselves from being scammed.

This article can help avoid the three international sales scams we see most often: The disappearance of the seller after payment, substandard goods being supplied, and the fake customs payment.

Let’s look at ways you can identify these scams and walk away before parting with your money:

Trust your suspicions

International trade offers few guarantees that a full shipment, or full payment, will ever come your way. So how do you avoid falling victim to international sales scams? The best means of protecting yourself, and your business, from fraudster are extreme caution and awareness of common scamming methods.

Here are two scenarios you can consider to be red flags, and what to do about it:

A foreign contact wants to send you a gift

International scammers can pose as a seller, a freight agent, or even a contact you meet via social media. We’ve heard of countless scenarios where this “new connection” targets their mark by pretending to send a gift. The receiver is then contacted a few days later by someone posing as a clearing agent, and told to pay customs duties on the gift.

In some cases they are told the parcel contains money, and that an additional penalty must therefore be paid to clear it. This promise of cash forex is alluring, but it a very unlikely reality. It is illegal for courier companies to transport cash. An international contact may only send you money via a recognised method of international payment.

If a contact abroad truly wants to send a gift, ask them to do so via a reputable courier company like DHL or Aramex. Insist that they share the tracking information and cross check the tracking number with the courier company’s call centre to confirm the parcel is real before paying any customs fees. If it is a legitimate gift, bear in mind Customs allows a rebate (non-payment) of duties on gifts worth less than R1,400 twice a year, providing it is not acholic products or perfume.

If you are not 100% sure of a parcel’s nature, do not pay anything towards receiving it. Even if the parcel is real, the worst that can happen is that it remains at Customs and eventually gets destroyed. You cannot be held liable for this if the parcel is unsolicited.

Have a question?

Get in touch

Pressure to make un urgent upfront payment

Fraudsters who run international sales scams often manipulate buyers by feigning an urgency to make payment. They create all sorts of reasons, like supposed low stock availability or shipping deadlines. Don’t let this keep you from doing your due diligence.

If, for any reason, you don’t believe the shipment is real, insist on documentary proof of the shipment before payment. This can be achieved by paying via a letter of credit, and/or insisting on a pre-shipment inspection.

Research the Seller

You can do the following to learn more about your suppliers legitimacy and identify international sales scams:

Take special care to research the seller when purchasing popular, high value, or rare items, especially when these goods are advertised at good prices.

Get the seller’s physical address and phone number.

Check whether the seller is registered with the correct phone number and physical address in their telephone directory or local directory assistance service.

Look up the company’s address on Google Earth and see if the location is appropriate for the type of business. While there, take note of companies in the same street or neighborhood. Phone these companies to confirm your supplier is, in fact, still there and trading.

Ask your freight agent to have their local branch contact and verify the supplier’s business and give their opinion on the business’s legitimacy.

Search online and look for company reviews.

A number of sellers are registered on PayPal. Check if the supplier has been a verified member of PayPal for a reasonable period of time. To check the seller’s PayPal status you will need to initiate (but not finalise) payment to the seller. On the “Check the details of your payment” page is a “seller’s reputation link.”

Make use of a reputable business-to-business trading platform

Most international trading platforms have a method for rating sellers and a section where previous buyers can leave feedback.

Look for established sellers with a reputable rating and a history of positive transactions from happy buyers. It is preferred to only communicate with the buyer through the trading platform. That way an independent record of the communication is kept. The majority of trading platforms offer some buyer protection from international sales scams, like escrow. Read about their buyer protection policy on their website or contact them directly for information.

Use a payment method that offers buyer protection.

Aim to never wire money directly into a seller’s account unless you have an established relationship with them or otherwise trust the seller. Rather choose a more secure payment option.

A number of the established business-to-business trading portals offer an escrow service which you can make use of. For large payments, a letter of credit or documentary bank collection may be considered.

Take control of the freight and use insurance.

A common scam is for the seller to send damaged or substandard goods and blame the damage on the shipping provider. To protect yourself against this scam arrange the freight yourself and invest in freight insurance. Due to the low claim rate in international transport, freight insurance rates tend to be reasonable. Click here for assistance with freight quotes.

By adhering to the above advice you can dramatically lower your chances of being scammed, giving your more confidence when sourcing new products.