China Red Star Investigation Agency provides private investigation, company investigation, skip tracing, background check, asset search, company verification, supplier investigation, factory audit, business support, legal support, recovery of money owed by Chinese suppliers services and more.

Supplier Fraud Prevention

Home Supplier Fraud Prevention

Supplier Fraud Prevention

For overseas small and medium-sized enterprises, cooperating with Chinese suppliers involves dealing with a multitude of risks. Due to cultural differences, language barriers, labor costs, and geographical distance, among other reasons, detecting and preventing fraud from Chinese suppliers has become extremely challenging for foreign companies. You may find it difficult to obtain accurate, real-time, and comprehensive information, or to understand the thought process of fraudsters, making it hard to identify their deceptive behavior and make correct risk assessments and informed business decisions.

Check China vendors

Suppliersr fraud can occur in a highly intricate manner, stemming from one or multiple sources.

These fraudsters, tricksters, and dishonest businessmen employ pseudonyms (including contacts and corporate representatives) and false company information, striving to appear trustworthy while using shell companies or counterfeit documents to deceive for financial gain. The nature of cross-border transactions often allows them to evade international investigations or prosecutions. If not promptly identified, suppliers fraud can inflict severe damage on the finances and reputation of overseas small and medium-sized enterprises. Many foreign companies have fallen victim to deceitful Chinese suppliers, with numerous stories circulating about overseas buyers being duped by unscrupulous sellers from China. In most cases, conducting background checks and legal recourse against Chinese suppliers is exceedingly difficult for overseas buyers or comes at a high cost. These overseas victims can only resort to sending emails to Chinese companies with hollow threats of seeking compensation. However, they may no longer be able to contact the Chinese suppliers or recover their losses through legal means. Therefore, before facing significant losses, it is crucial to verify the legitimacy of Chinesesuppliers. There are many feasible methods that can greatly reduce the risk of vendor fraud, saving you a significant amount of time and money, and allowing you to conduct business with Chinese suppliers with peace of mind.

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Check all new suppliersrs

This includes checking official registration document, verifying business licenses, and screening for any history of fraud or other wrongdoing.
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Field verification

By visiting a supplierr's place of business and conducting a hands-on review of their operations, inspectors can identify potential red flags and assess the overall risk of fraud.
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Monitor supplier's performance

Regular inspection of supplier's documentation and monitoring of supplier's performance will help to identify changes in supplier information and operational anomalies in a timely manner.

The key to combating suppliers fraud is how to prevent it from happening in the first place.

A typical form of supplier fraud in China is the false supplier.

Fraudsters use seemingly trustworthy false supplier information to commit fraud, including: false legal representatives, fraudulent phone numbers, fraudulent bank accounts, untraceable false addresses, trading merchants posing as manufacturing plants… etc.

While detecting and preventing suppliers fraud is not easy, it is possible. Measures such as conducting shell scans, document checks, verifying key information and implementing operational follow-up can significantly reduce the incidence of supplier’s fraud.

China suppliersr Fraud Prevention
Prevention China Vendor Fraud
Preventing Fraud by Chinese Sellers

How we can help you identify and prevent suppliers fraud?

Registration Verification

Check supplier registration documents and verify information matches to assess the authenticity of the supplier.

Identity Checking

Identity theft/impersonation is a prevalent and significant threat, and fraudsters mostly use false identity documents to commit fraud.

Qualification Check

Intellectual property rights, qualifications, product certifications of the supplier are checked.

Business follow-up

Timely knowledge, monitoring and control of contract performance during the contract performance process are effective in preventing contract fraud.

Data Mining

Data mining in official government documents to obtain key information about suppliers through multiple channels.

Address Checking

Most of the scams and frauds can be avoided if the address is verified.

Background check

Relevant background checks are conducted on suppliers, business executives and shareholders.

Regular Audits

Regular supplier audits can keep abreast of the supplier's business status and adjust the business strategy to avoid fraud in the cooperation.