Common Internet Frauds in Import Export Business Part II - Examples of Common On-Line Frauds

Foreknowledge is forewarning - an insurance against many frauds and scams. This is specially so in Internet where fraudsters of a same kind of scam follow more or less same on-line tricks, even similar language. These fraudsters believe success lies in large number - as thousands of new surfers are joining Internet everyday. What is old hat and discarded immediately by an experienced surfer - may work on a newcomer. And we must say - there is some truth in this statement - otherwise Nigerian 419 scam can not continue for so many years.

We have documented here few on-line scams and abuses encountered frequently by business persons.

False Promise Leaves Manufacturer/Exporter Bankrupt

A new kind of fly-by-night operators have devised this smart trick to defraud unsuspecting exporters. Here, so called buyer negotiates with manufacturer/exporter for custom designed product as per given specifications. The quantities are huge - sometimes there is even talk of buy-back arrangement.

The 'buyer' convinces the seller that he/she is about to place a huge order on L/C basis with attractive payment option and the seller should start production immediately.

However, once production is complete the buyer goes back on his word, and the manufacturer is left with custom designed products that can not be sold to others. The seller has no option but to sell the stock to the buyer at reduced price and under atrocious payment conditions.

Your insurance remains in not agreeing to early production, specially for unknown buyer, no matter how attractive the order is.

Fax Fraud

This is a smart trick that has fooled even experienced exporters. The fraud starts with an innocent looking fax requesting you to send detail information about your products, services, prices etc.

You may ask where is the scam ? Well, the requester provides a fax number only. The only way you can provide the information is by return fax to a number that turns out to be in a foreign country, resulting in expensive charges on your phone bill.

Beware of faxes, letters or e-mails asking you for detailed information about your products or services and providing only a fax number for you to respond. No matter what elaborate explanation is given, these people aren't really interested in buying anything from your business. The real motivation is to get you to send a lengthy fax to a foreign phone number, resulting in high charges on your phone bill.

When you dial a foreign number, your local phone company connects you to the overseas telecom company in the country you are calling. The overseas company connects you to the number you dialed. Part of what you pay for the call or fax goes to the foreign phone company - and the scammer profits by arranging to share the revenue with the company.

Remember - telephone numbers in Canada and some parts of Caribbean follow same dialing code (1-nnn-nn..etc.) as used by US companies. You may assume the fax or telephone number to be from USA - while it may actually belong to a Caribbean country.

Your protection against such frauds lie in checking the telephone/fax number carefully and insisting on full particulars about requesting company before sending a lengthy fax. Another protection against such scam is to direct such callers to visit your website for detail information (if you still do not have a website - think again. You really need one for international business).

Happy Surfing

Dr. Amit K Chatterjee

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Source: FAIDA - Newsletter on Business Opportunties from India and Abroad Vol: 4, Issue 17 ; Dec 24' 2003

Author : Dr. Amit K. Chatterjee
(Amit worked in blue-chip Indian and MNCs for 15 years in various capacities like Research and Information Analysis, Market Development, MIS, R&D Information Systems etc. before starting his e-commerce venture in 1997. The views expressed in this columns are of his own. He may be reached at )

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