Analysis of foreign trade fraud cases: types, characteristics and preventive measures

In the field of international trade, fraud incidents occur frequently, and their complexity often confuses many salespeople. In international trade, due to language barriers, differences in laws and regulations, different customs and cultures of various countries, and limitations of geographical distance, the prevention awareness of foreign trade practitioners is particularly important. This article will discuss in detail the main types and case characteristics of foreign trade fraud, as well as relevant warnings and preventive measures.

Main types of foreign trade fraud

International trade fraud can be roughly divided into two categories: Liar type and profiteer type. Scammers usually design a scam from the beginning, such as the common “419 scam letter”. This type of fraud usually uses current international events such as coups and civil strife to lure victims, claiming that victims can earn huge returns. In contrast, profiteers use various means to commit fraud in the normal trade process, such as price reductions, forced claims, etc.

Among them, the “pie in the sky” appeal in scammer cases is alarming. The operation method of this type of scam seems simple, but in fact, the deceived may encounter a variety of traps, including being lured to negotiate in a third country, forced to pay handling fees, having bank information stolen, or used for money laundering and other purposes.

Analysis of fraud methods

Another common foreign trade fraud technique is defrauding goods. This type of scam is most common in West African countries, and manipulators usually use D/P settlement or small advance deposits. When the goods arrive in Africa, scammers may collude with freight forwarders to release goods without a bill of lading or unreasonably refuse to pay, leaving the goods stranded at the dock, eventually leading to customs auctions.

This type of fraudster often claims to be from traditional fraud centers such as Nigeria and Benin. They show unfamiliarity with the product during transactions and usually emphasize the speed of transactions and attractive prices to promote exports. Merchants can easily close the deal. Scammers may also gain trust with the first transaction and then make larger transactions, using fake payments or incorrect banking details to achieve their goals.

Domestic anti-fraud strategy

In the face of domestic fraud, foreign trade practitioners should adopt a cautious attitude. First of all, it is recommended to conduct a detailed check on the other party’s company, especially to see whether the company name standard meets the formal requirements. Understanding whether the company has a certain market reputation and real background has become the key to avoiding being deceived.

For situations where the details are unknown, the following principles should be followed:

1. Believe it or not: Although there are no guarantees, you should take a serious approach to potential trading opportunities.
2. Don’t let the hawk out of sight: When it comes to money transactions, don’t let go easily, and make sure not to make any promises before seeing real money transactions.
3. Follow the rules: The contract should be strictly followed for the first transaction to avoid potential losses due to bribes or kickbacks.

In addition, if the other party insists on meeting, try to do it in the environment of the other party’s company rather than in a private or public place. Someone should accompany you when visiting and maintain contact with the outside world to ensure personal safety and transaction transparency.

Summary

By having an in-depth understanding of the various forms and characteristics of foreign trade fraud, practitioners can improve their awareness of self-protection and reasonably prevent possible risks. Be sure to adhere to industry rules and regulations and remain calm and rational in every transaction to ensure that your own rights and interests are not infringed.