Five safeguards against fraud by Chinese machinery manufacturers: ① Factory Verification (on-site or video checks of facilities, equipment, and workers to expose shell companies); ② Account Verification (pay only to official corporate accounts, never to personal/private ones); ③ Prepayment Control (limit initial deposits to 30% or less; avoid full upfront payment); ④ Account Change Protocol (verify any last-minute changes to payment details via phone or video call to prevent BEC email fraud); ⑤ Goods Inspection (use third-party services like SGS or BV for pre-shipment inspection)—Common scam traits: low-price lures, urgent demands for payment, and requests for payment to personal accounts.
I.
Spotting Common Scams
Shell Companies (no factory/OEM resellers soliciting orders with low prices); Phishing Websites (impersonating major manufacturers or using domains with slight spelling variations); Email Fraud (BEC scams impersonating suppliers to announce account changes); Product Mismatch (high-quality samples vs. downgraded bulk goods); Absconding with Funds (disappearing after receiving the deposit)—First, identify the scam type (low price + urgent payment + personal account = three high-risk signals).
II.
Payment Security
Corporate Accounts (account name must match business registration); 30% Prepayment (cap for initial orders; avoid 100% upfront payment); Platform Escrow (e.g., Trade Assurance—funds released after inspection); L/C (Letters of Credit for large orders); Phased Payments (deposit / machine inspection / shipment / final acceptance)—Payment timing is key to fraud prevention (the lower the prepayment, the safer the transaction).
III. Preventing “Account Change” Scams
High-risk scenario: Seller emails claiming an account change and requesting payment to a new account; Response: Must verify directly with the contact person via phone or video call; Verification: Ensure the payee name and account number match historical records; Sender: Check the email domain carefully (impersonators often change just one letter);
Stay calm: Any urgency to pay demands high vigilance—account-change scams account for the majority of foreign trade financial fraud (secondary verification is mandatory).
IV. Preventing Quality-Related Scams
Sample verification (request and inspect samples); FAT (Factory Acceptance Test) (test run with materials before shipment); Third-party inspection (pre-shipment inspection by SGS, BV, or CCIC);
Documenting acceptance (video of test run + acceptance form); Linking final payment (pay balance only after passing acceptance)—preventing quality scams relies on “inspection” (verify samples, test machines, inspect goods; do not pay in full before acceptance).
V. Rights Protection Plan
First, preserve evidence (contracts, transfer records, chat logs); second, act within 48 hours (SWIFT recall); third, file platform complaints (Trade Assurance claims); fourth, enforce deposit rules (double refund under Article 587 of the Civil Code);
fifth, arbitration or litigation (e.g., CIETAC)—five preventive measures (factory audit, corporate account payment, 30% prepayment, account-change scam prevention, third-party inspection) plus a rights protection plan (evidence, fund recovery, arbitration) ensure safety in machinery procurement.
