9 Types of Alibaba Scams and How to Avoid Them

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Nobody wants to be scammed when importing on Alibaba. However, scams do occur on Alibaba. To help international buyers protect their properties, we did a lot of research on this topic and wrote this article on different types of Alibaba scams based on our online research and real cases from our clients.

1. Use fake certificates to prove that their products or qualifications comply with your requirements.

(1) What this type of scammers does

a. Use another company’s certificate or a photoshopped one.

b. Or, give you an expired certificate.

For example:

常州胜如机械有限公司 (Changzhou Victory Machinery Co., Ltd.)

We found that its certificate on Alibaba belongs to another company, BEIRUI INDUSTRIAL Co., LTD., and that of Changzhou Victory Machinery Co., Ltd. was forged through Photoshop. Check the following pictures:

changzhou company

certi

complian

(2) Influences of Fake Certificates

Products may not conform to safety standards, such as excessive levels of heavy metals. Importing their products may cause you trouble.

(3) How to avoid this type of scam

a. You need to ask your suppliers for relevant certificates before paying.

b. Find relevant organizations to verify the authenticity of the certificates. We can help you verify them if you need to.

2. Middlemen Posting as Manufacturers.

(1) What this type of scammers does

Some companies put other companies’ products or photos on their homepages, pretending to be their own.

For example, Suzhou Hi-liang New Energy Technology Co., Ltd uses pictures of other factories on Alibaba’s homepage. It pretends to be a big company in the e-bike manufacturing industry, when in fact it is just a small trading company.

company profile

(2) How to avoid this type of supplier on Alibaba

Check a Chinese company’s background before doing business with it. Many suppliers on Alibaba exaggerate or lie on their Alibaba pages. Due diligence checks are a must.

3. Sell branded goods at very low prices.

(1) What this type of scammers does

a. Sell branded products like Apple, Samsung, Sony, etc.

b. Attract you with a price that is far lower than the average.

c. Say they have connections in the factories where the branded products are made.

apples

(2) What they will do after receiving money

a. Refuse to deliver.

b. Send fake or poor-quality products.

(3) How to avoid this type of scam

Don’t buy any kind of branded products on Alibaba. Because brand products have their own official sales channels, no Alibaba supplier would have the right to sell them. Do not trust any of these suppliers’ words. Just step away.

4. Ask for higher prices after you placed the order.

(1) What this type of scammers does

Attract you with a low price first, and ask for a price rise during the manufacturing process, or before shipment with all kinds of excuses.

Otherwise, they will not deliver the goods to you. Since you have already paid part or all of the money to the supplier, you will know it will be a bigger loss if you give up the order. This kind of scammers takes advantage of this psychology of yours.

For example, sometimes your suppliers may try to ask you for a price raise with a fake invoice. For example, “收款收据” is not a legal invoice, it is just a receipt and it’s easy to fake.

As is shown in the picture, the name of the company typed under the stamp is not the same as that on the company stamp. And these companies on this receipt do not even exist in China. But a Chinese supplier asked one of our clients to pay more money with this receipt.

receipt

(2) How to avoid this type of scam

a. Sign a contract before doing business, and write clauses for the price increase of raw materials during the business.

b. Do not pay 100% in advance.

c. If you think the increase of price is reasonable, then it is necessary to ask the suppliers to provide a legal invoice and do market research to confirm that the price increase is true.

5. High sample quality, low product quality.

(1) What this type of scammers does

To attract you with good quality samples.

(2) What they will do after receiving money

Ship products of lower quality or even completely different products to you.

For example:

Zhenjiang Zibon Electric Vehicles Co., Ltd. used to sell electric cars on Alibaba. In this link, you will find a story of how this supplier sent a crappy car to his client instead of a fancy-looking sports car:

cars

(3) How to avoid this type of scam

a. Check the company’s background to find out its strength before doing business.

b. Use trade assurance.

c. Signing clear contracts including all product specifications.

d. If possible, you can send representatives to check the product quality regularly. If you don’t have time, you can check it by video or hire a quality inspection service during the manufacturing process.

e. Check product quality yourself or hire a quality inspection service before shipping the products.

f. Do not pay 100% of the money upfront to suppliers. Or, it will be harder to ask them to rework when the product doesn’t match the samples.

6. Attract you with trade assurance but think up excuses to ask you to pay in different ways later.

(1) What this type of scammers does

Suppliers first agree to use trade assurance to attract you, then ask you to alternative payment methods with various excuses.

The common reasons are as follow:

a. If the payment cannot be received immediately, the company cannot start the production.

b. Lie to you that there is something wrong with the account you discussed before and he cannot receive the money.

You are required to transfer the money to a personal account or the company’s offshore account.

(2) What they will do after receiving money

a. It is likely that you can’t contact them after payment.

b. Pretend that he didn’t receive the money or deny that the account was connected to his company.

c. Even if he ships the goods to you, it is difficult to guarantee the quality of the products.

(3) How to avoid this type of scam

a. Insisting on using trade assurance to finish the payment.

b. Check whether the account provided by the supplier belongs to this company before payment. If you find that it is difficult for you to check, we can help you.

You are likely to face property loss if you do not use trade assurance because if you transfer money to a personal account or an offshore account off a company, it will be challenging to prove that the account belongs to the company and it will be difficult to protect your benefit.

7. Mail Fraud.

(1) What this type of scammers does

Hack into your suppliers’ e-mail, and ask you to pay money to a new account. 

(2) What they will do after receiving money

Take your money and leave. It’s almost impossible to find them.

(3) How to avoid this type of scam

Crosscheck the bank account details with various means of communication such as emails, phone calls, Whatsapp, etc.

8. Not all old members are good members.

(1) What this type of scammers does

Buy an Alibaba account registered a few years ago, and make you believe that it is an experienced old company to gain your trust.

(2) What they will do after receiving money

1. Since this is just a newly established company, it may be difficult to meet the requirements of your company or it may not have qualifications or experience.

2. It’s also possible that after you pay, the company takes the money and leaves, and you can’t receive your goods.

(3) How to avoid this type of scam

Before doing business with a Chinese company, you should not only focus on the year of registration on Alibaba but also the year of establishment of the company it belongs to and some other information. If you can’t find the detailed information, we can help you.

9. Suppliers on the Official List of Dishonest Persons Subject to Enforcement.

(1) What this type of scammers does

Many suppliers on Alibaba are from China, but some of them are being listed as Official Dishonest Persons by the Chinese authorities usually because they refuse to pay back money after official judgment. However, sadly, Alibaba will not help you check whether a company is on this list or not. Also, a company’s credit background may change with time.

(2) What will happen after receiving money

As soon as your money goes into the company’s account, your money will be frozen and used to pay off the company’s debts. Doing business with companies on the Official List of Dishonest Persons Subject to Enforcement is considered highly risky.

(3) How to avoid this type of supplier

Before doing business with a company, you need to check a company’s background. If you have any problems, you can contact us for help.

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