How to avoid China sourcing scams

The losses are boring, not dramatic

The scams that actually take money off UK importers are rarely elaborate. Nobody is usually pretending to be a factory that does not exist. Far more often it is a payment sent to the wrong bank account, a specification quietly downgraded, or a supplier who takes a deposit on a price they were never going to be able to honour.

That matters, because it means the defences are boring too. Verification, staged payment, a written specification and an inspection stop nearly all of it, and none of them require you to be suspicious of everyone you deal with.

The payment redirection, which is the big one

This is the single most common serious loss. Someone gains access to one side's email, reads quietly for weeks, and then, when an invoice falls due, sends a message saying the usual account is under audit, frozen for the holidays, or has moved to a new bank. The tone matches the earlier messages because they have been reading them. Sometimes the sending domain is one character different from the real one.

Two habits stop almost all of it. Never accept changed bank details by email, however plausible the explanation, and confirm any change by voice or video using a number you already had rather than one supplied in the message announcing the change. Then check the account name against the registered company name on the business licence, not the name on the invoice, because fraudulent accounts frequently match the invoice.

Be wary of paying a personal account, or a company registered somewhere other than where your supplier is. There are legitimate reasons this happens, but it removes most of your recourse, so it needs agreeing in advance rather than at the moment of payment.

If money does go astray, contact your bank within the hour and ask for a recall, then report it to Action Fraud, the UK's national fraud reporting centre. The window in which funds can sometimes be stopped is very short.

The quiet substitution

More common than outright fraud, and harder to argue about. The price you pushed for was below what the quoted specification costs to make, so something changed: a thinner material, an unbranded component, a shorter process, a coating that is not what you asked for.

This is why a specification with numbers in it is a fraud defence and not just a quality tool. Materials by grade, named components with a stated position on equivalents, and a defect standard give an inspector something to check and give you something to enforce. Without them there is nothing to point at.

The warning sign is a price that moves without the specification moving. If a quote drops sharply after pressure, ask exactly what changed. A supplier who cannot answer has answered.

The deposit that buys nothing

A supplier takes a deposit, production slips, then slips again, and eventually the explanations stop being specific. Sometimes the money was used elsewhere, sometimes the order was never viable at that price, occasionally the company is not what it claimed.

Verification before payment prevents most of this. Ask for the business licence, read the registered scope of business, and check the company on the National Enterprise Credit Information Publicity System at gsxt.gov.cn. Confirm the licence, the contract and the bank account all carry the same name. Then ask for a live video walk of the production line before the deposit, not after.

Stage the money so a failure is survivable, and be cautious of anyone asking for full payment before production on a first order, whatever the discount attached to it.

Warning signs worth acting on

A price well below every other quote is information rather than an opportunity. A very wide, unrelated product range suggests a reseller rather than a manufacturer. Reluctance to do a live video call is a signal, as is pressure to move the conversation off a platform before an order exists, since that is where the protection stops too.

Watch for urgency attached to money: a slot that will be lost, a rate that expires today, a factory closing for a holiday next week. Urgency is the tool, because it is what stops people making the phone call that would end the scam.

And be careful of a supplier who agrees to everything. A factory that says yes to every specification, every deadline and every price without a single objection is often not planning to do all of it.

The routine that prevents most of it

Verify the company against the official register before you engage seriously. Write a specification precise enough that a delivery could fail it. Stage the payment and tie the balance to a passed pre-shipment inspection rather than to a date. Check the account name against the business licence. Never change payment details on the strength of an email. Keep the quotation, specification, approved sample, order, inspection report and payment records together.

None of that is dramatic and all of it is cheap. Almost every serious loss we are asked to help with skipped at least two of those steps, and usually the same two.