Most Common Types of International Trade Frauds and How to Avoid Them

Most Common Types of International Trade Frauds and How to Avoid Them

While engaging in foreign trade can be extremely lucrative for a person, they must be extremely careful while venturing into this domain. There is no dearth of malicious parties and scammers in the sphere of international trading due to which one may end up getting scammed and have to bear huge losses.

The most common types of international trade frauds:

● No-delivery scam: Here the vendor absconds with the money, and the buyer may either not receive anything, or they may receive empty containers that trigger automated shipping documents and acts as “proof” that the transaction has been made by the seller. To avoid such a situation, one must learn how to find if a company is legitimate before dealing with any vendor for the first time.

● Escrow fraud: Escrow scams take place when a con artist sets up an exciting online escrow service that has attractive incentives and low-fees. As the buyer sends money through the site, the platform suddenly closes down and the money disappears. Hence, whenever paying a company through escrow, one must be assured of its absolute legitimacy.

● LOI (Letter of Intent) scam: In such a situation, one may get a huge order for their products. Fraudsters typically ask for a large number of goods and ask the sellers to fill up a vendor registration form. They subsequently ask the seller to pay a certain sum of money for that form and order completion. However, after sending the money, the seller loses all contact with the company and is never contacted by them again. This is the reason why sellers must understand how to check company status so that they can gauge their legitimacy.

● Phishing: Here a scammer sends an email requesting the bank details of a person. These emails can be extremely convincing, as the con-artists typically tend to imitate a company one most frequently deals with or a firm that usually pays with a direct deposit. Hence, rather than blindly divulging banking information or details about any other payment method, one must contact the relevant company directly and clarify if they have indeed sent the mail or not.

To reduce the risks of fraud, one must do their due diligence before connecting with any prospective buyer or seller. Any authentic company won’t hesitate to give detailed contact details at once. People should steer clear of firms that create a fuss about revealing their phone numbers or physical address.