Fraud type · Advance payment fraud
The fake supplier: paying in advance for goods that never arrive
The product is scarce, the price is good and the supplier has it in stock right away. You just have to pay first. Then nothing arrives, or something very different.
How does it work?
Short answer: a fake supplier offers goods that don’t exist or aren’t theirs. They ask for prepayment, or a deposit “to start production” or “for customs”, and disappear. They often use the name of an existing company, a professional website and someone else’s real certificates.
The variants
- The cloned supplier: the name of a real company with its own domain and bank account. See Spotting a clone company.
- The fake web shop or platform profile: a business web shop or profile on a trading platform, set up for a few weeks.
- The extra costs: after the first payment come “customs fees”, “insurance” or “certificates”.
- The wrong goods: something is delivered, but something else, less, or of poor quality.
- The scarce product: at times of shortage, with prices below market.
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9 red flags
- Price clearly below marketfor a scarce product.
- Prepayment onlywith no other payment method possible.
- Account in someone else’s nameor in another country than the supplier.
- A young domainfor a company that claims to have existed for years.
- Contact details don’t match the registeror the official website.
- Certificates or photos from the internetthat also appear at other companies.
- No visit or video possibleof the warehouse or factory.
- New costs keep appearingafter the first payment.
- Pressure: “other buyers are waiting”.
One red flag is not proof. If you see two or more, stop and check further first.
Checklist: how to check a new supplier
- Look up the supplier in the official register of its country: does the company exist, since when, with what activity?
- Check how old the domain is and whether it fits the company in the register.
- Call the company on a number you looked up yourself.
- Check the IBAN: country, bank and account holder’s name.
- Search the photos and certificates and verify certificates with the issuing body.
- Start small, or use a safer payment method such as a letter of credit or payment on delivery.
- For large orders, have the goods inspected by an independent party before paying.
What to do if it goes wrong
- Call your bank immediately and ask them to recall the payment.
- Don’t pay extra costs to “release the delivery”.
- Report it to the police and report the website or profile to the platform and the hosting provider.
- Warn the real company if its name was misused.
Let Safetybizz check it
Safetybizz checks a new supplier before you pay: does the company exist, how old is the domain, and do the contact details and bank account belong to it.
Frequently asked questions
What is advance payment fraud?
A scam where you pay in advance for goods or services that are never delivered, often by a fake supplier or a clone of an existing company.
How can I pay a new supplier more safely?
Start with a small order, use a payment method with more security such as a letter of credit or payment on delivery, and have large shipments inspected beforehand.
Why does the age of the domain matter?
A company that has existed for years usually has had the same domain for years. A domain only a few weeks old for an “old” company is a strong sign of a clone.
Read also
- Spotting a clone company
- Invoice with different bank details
- Ordering in someone else’s name
- Checking a company before you do business
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This page is general information and not legal advice.