How to avoid Internet Fraud - For buyers
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| Check
the credentials of potential partners before engaging in business
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Be sure to check the credentials of all
potential partners before engaging in any business over the internet.
You can check the backgrounds of established manufacturers or
wholesalers with EC21
Credit Report. Unfortunately, few resources
are available to verify the legitimacy of newly established businesses.
Be especially vigilant when dealing with new businesses.
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| Use Extra Caution with High Value and Popular Items |
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Certain types of items (e.g. computers, jewelry, electronics, etc.) carry a higher fraud risk and require additional checking before completing the sale. Do additional checking, especially with popular items that tend to be sold out in stores.
Be suspicious of deals that seem too good to be true. They usually are.
Be suspicious of sellers offering very low prices for hard to find items who seem to have a large number of these same products.
If a seller is offering a number of the same items, ask to speak with the seller's supplier. Independently verify that the supplier is a legitimate business with the correct address and phone number through a telephone directory or by calling directory assistance.
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Letter of Credit and Escrow
are the recommended payment methods
 Letter
of Credit (L/C)
| A Letter of Credit is the preferred
payment method. However, there is some possibility of fraud
due to incorrect or forged shipping documents. Minimize the
potential for fraud by contacting the L/C issuing bank.
Be sure to check the L/C number, opening date, opening
place, name and address of the issuing bank, shipping date,
valid date, loading and unloading port, applicant, period
of presentation, amount, as well as details of transshipment,
partial shipment, etc. |
Escrow
Escrow.com
is the transaction settlement service used by many of the
leading e-Commerce sites, including eBay and eBay Motors.
Escrow.com acts as a secure third party to protect the Buyer
and Seller. (but refer to www.escrowfraud.com)
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Avoid
T/T (Telegraphic Transfer payment)
It is unwise
to accept an overseas supplier's request for pre-payment.
In most cases, a request for T/T payment involves attempted
fraud.
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Avoid
Payment by Western Union
Most of the fraudulent cases
reported to EC21 involve payment via Western Union. After
a buyer sends funds, the receiving breaks contact and party
disappears. You cannot trace the real name of an account
holder with a wiring service such as Western Union.
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| Be wary of items with delayed shipment |
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| Exercise caution when purchasing items with a significantly delayed delivery date. Delivery dates further than 20 days after your payment involve more risk. Be aware that PayPal sellers are not allowed to sell goods with delivery dates delayed more than 20 days from the date of payment. |
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| You should make a trade contract and keep
it for a specific period to prevent argument. The contract should
include sales conditions, payment method, an arbitration clause,
quality inspection, etc. |
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| Stay
in frequent contact with business partners |
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Call the company's phone number and check
that the person you are in touch with actually works for the company.
Be suspicious of any trader who uses only an e-mail address and
cell phone and is reluctant to reveal a telephone number.
Maintain frequent contact and ask in detail about price, quality,
payment method, contracts, etc. Genuine traders will respond positively
and promptly. Most successful internet traders maintain close contact
with business partners and reply promptly to inquiries. |
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| Check
Contact Information |
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E-mail Address : Do not rely on
e-mail to contact a business partner. Even if the company has its
own domain name, you may not be able to trace its owner.
Fax Number : Look out for companies that use the same number
for telephone and fax. They are likely to be small businesses. Also,
it is best to avoid companies that list only a fax number in their
contact information.
Website address : An impressive website does not guarantee
the honesty or existence of a company. Don't be lulled into a
false sense of security. |
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Request samples to check the quality
of product.
Order a sample before committing to a purchase order to
be sure that the product meets your expectations. Don't
forget to pay for samples. |
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| Be
Wary of Over-generous Offers |
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| Be wary of potential partners who
offer a particularly high or low price in the first instance.
It is easy to be tempted by such offers, but they are most
often attempts to defraud. This method is most commonly employed
in the mobile phone and computer-related business. |
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