Case of fraud: Ultralow price of the goods

The low price always was the bait for trustful buyers. If the price is extremely low in comparison with a market price or 30-50 % lower than market price, you should be cautious.

This problem is especially actually today, during world financial crisis, when buyers search for the lowest prices to make cost of goods lower or to save financial assets. Swindlers can offer the lowest prices with referring on objective reasons, including decrease in the cost of raw materials, energy carriers, sale of the goods by the manufacturer below cost to avoid stopping of producing or bankruptcy.

In all cases swindlers hope to receive payment till buyer sees goods. There are two kinds of swindlers. The first kind of swindlers can be satisfied with little money. They can offer to pay for samples of the goods, for example. In the best case you will receive the ordered goods, but with a bad quality. The second kind of swindlers wants to receive big money from you, so, samples of goods and even trial cargo can have satisfactory quality, because they wait for payment of big order.

If your terms of payment are not the postponing of payment after arriving of goods, you should follow our advices to minimize risk of fraud:

1. Check information about Seller through the Internet. You can request your bank to check up this company. Send inquiry to your embassy in country, where company is situated.
2. Ask Seller about his other clients, known clients. Contact these clients and ask their recommendations.
3. Remember, payment by Letter of Credit can reduces risk of non-payments, but is ineffective way to decrease risk of fraud if the LC’s documents do not include report of Inspection Company, which has trust from you.
4. When you sign contract, you should pay attention to the conditions of regulating in case of non-executing of obligations.
5. Remember, payment systems like Western Union are used for remittance to well-known people only. These kinds of payment systems are very popular in swindlers, like payments by stolen bank’s cards.
6. One of the ways to find trust between both Seller and Buyer is the using of an escrow payment service. The escrow payment service is reservation of payment sum on the account of the 3rd party (bank or other company) and remitting of this money to Seller as soon as Buyer receives goods and check conformity of the goods to the documents from the Seller (technical specification to the contract).

Andrew Getko

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