The Internet offers a global marketplace for sellers and buyers from every corner of the globe. Inexpensive, fast and convenient - these are few of the qualities that has made Internet so popular among business community in such a short span of time. It offers a level playing field for all business - irrespective of size and location.

Unfortunately the anonymous nature of Internet - bedrock of a free and fair global communication medium - has been abused by scamsters and con artists to defraud at global scale. Crooks also recognize the potentials of cyberspace. So, we see same scams that have been conducted by mail and phone on the World Wide Web and in email.

Without prior knowledge about these scamsters and how they operate - it is hard to tell the difference between genuine online sellers and criminals who use the Internet to rob people.

This article discusses common business related frauds and abuses as also how to protect yourself from such cyberfrauds.

We have identified following frauds and abuses that commonly take place in e-business transactions. It should be noted that the borderline between abuse and scam is rather thin in cyberspace, one should exercise proper caution as there's hardly any regulatory body that can punish these scamsters.

• Sample Chor ('Chor' is a Hindi word - meaning thief)

• False promise leaves manufacturer bankrupt

• L/C fitted with limpet mine




• Part Payment Scam




• Bank colluding with Fraudster




• Illegal immigrant disguising as buyer




• Switching identity




• Abusing Payment Clause to delay payment




• Switching identity




• Fax Fraud




• Loan Scams




• Internet Hoax




• Nigerian 419 Money Offer Scam




• Nigerian Scamsters in the disguise of buyer




• Non-existent Internet Services




• Nigerian Oil Import Fraud

Sample Chor - Common Internet Abuse

Samples and catalogs are very important for buyers in selecting new supplier/product. It is quite unlikely that a major order will materialise without the buyer checking samples or meeting seller in person. However, sellers can not send samples to every inquirer - as there are many unscrupulous traders as also fraudsters who collect sample for exerting pressure on existing supplier or simply making money. As I said - the borderline between abuse and scam in cyberspace is rather thin in most cases.

How to distinguish between genuine buyer requesting sample and a habitual sample pincher ? ('Chor' is a Hindi word - meaning thief).

Like most things in life - there is no short cut or surefire solution - careful observation, prior knowledge of similar scams and exercising caution can help you protect yourself from most scamsters. Its like driving car - while there is no guarantee that accidents never happen - one can cut down significant risk factor by following traffic rules.

Here are a few tips :

1. Sample is part of a business transaction - a serious buyer usually negotiates on all business terms like payment method, delivery, quality etc. alongwith sample. On the other hand - the negotiation of most sample chors start and end with sample. So, exercise caution if you sense undue haste in request for sample.

2. A serious buyer knows what he or she wants or is pretty near to it. Overseas retail shop owners may sometimes lack clarity in describing exact look or specification of a product - however they are specific about their requirements, order quantity, nature of their clientele etc. Close examination of articulation of interest provides clue to the actual intent of inquirer. However, the articulation of a non-English speaking person can not be ideal and one has to factor this in the evaluation.

3. When an unknown buyer requests samples while hinting at a large order, it is always wise to request at least a nominal payment for the samples or at least the mailing cost.

4. Ask for Buyer's Federal Express Account number (so that courier cost is on buyer's account). Fed-Ex in India offers the service where you can send sample at buyer's expense, the buyer should have a Fed-Ex account. Regular buyers usually maintain account with one or more international courier companies like Fed-Ex, DHL, UPS etc.

My experience is that, serious buyers usually do not mind paying courier expense. Remember, courier cost is usually many times than sample cost and anybody who is ready to pay that should be very serious.

A note of caution - please exercise discretion if you are asking handsome advance payment. Asking advance payment for sample is not same as asking Fed-Ex account number. Even serious buyers may not like to pay an unknown seller in advance. Put yourself in buyer's shoe and ask yourself if you would do what you are suggesting others. International business is full of risks (and comensurate gain) - you should learn to cope with it. Overdose of caution may kill an otherwise lucrative contract.

Happy Surfing

Dr. Amit K Chatterjee

Related Links:

• Internet Frauds and Scams - Part I : Understanding the Fraudsters and their work

• Traps in Internet: Nigerian Scam - Be careful of deadly snakes flourishing in cyberspace

Source: FAIDA - Newsletter on Business Opportunties from India and Abroad Vol: 4, Issue 16 ; Dec 16' 2003