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Cases of international trade fraud firms need to avoid

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International buying and selling of goods is an important economic activity that comes with potential opportunities and risks that cannot be overlooked, including cases of fraud. For businesses and individuals involved in international transactions, recognizing and avoiding fraudulent schemes is extremely necessary to protect their interests and assets. In this article, we will learn more about common forms of fraud in international goods buying and selling to avoid and avoid encountering them.

What is international purchase and sale of goods?

International purchase and sale of goods is the process of trading goods between countries, through international trade contracts. This activity includes the export and import of products, from raw materials to finished products. International transactions not only help businesses expand markets and increase revenue but also promote global economic development through the exchange of goods, services and technology.

Cases of international trade fraud

Fraud through fake contracts

One of the common forms is that partners falsify contracts or provide false information about their company. They can use names, logos and information of reputable companies to create trust for partners. After the contract is signed and the transaction is completed, the seller will not receive payment or the buyer will not receive the goods as promised.

As a result, the seller loses money because he does not receive payment from the buyer after delivery. On the contrary, the buyer loses money because he does not receive the goods after paying the fraudulent partner. If a company or individual is associated with a fake contract, they can lose credibility and trust from customers and business partners. Having to resolve legal disputes and investigate fraudulent contracts can cost significant time and effort for both parties, diverting attention and resources. Frauds can damage business relationships between partners, weaken trust, and cause relational tension. Fraudsters may continue to use the same tactics to scam others, causing more damage to the business community.

Fraud through email scam

One of the most common email scams is asking to change payment information during the transaction process. Typically, the scammer will send an email to one of the parties to the transaction (usually the buyer), asking to change payment information, such as a bank account number or another payment method. They often justify that there was a change in the payment system or there was a technical issue that needed to be addressed immediately. This gives the email recipient a sense of urgency and makes it easy to accept the request without checking it thoroughly.

When payment information is changed at the request of the fraudster, the transferred money will not go to the real partner’s account but instead to the fraudster’s account. Once the fraud is recognized, often after the transaction has been completed and the funds have been transferred, recovering the lost funds becomes extremely difficult and sometimes impossible.

Fraud through fake orders

Thieves will often approach businesses by placing orders in large quantities, often exceeding the normal needs of the business. They can create a sense of urgency or appeal by offering higher prices or promising special preferential terms.

After receiving the order, the business begins the process of producing or importing goods to meet the requirements. When the goods are prepared and delivered to the designated address, thieves will often choose this time to disappear or refuse to receive the goods. Businesses will lose both money and goods without receiving any payment from the crooks.
Businesses will suffer serious financial losses when they have to produce or import goods without receiving payment from criminals. This can affect the business’s ability to operate and survive. When a business falls victim to fraud, its reputation can be severely damaged. Business partners may not have confidence in this business’s ability to conduct transactions, leading to loss of customers and future business opportunities.

If there is not strong enough evidence to confront criminals in the law, businesses may suffer not only financial losses but also legal consequences, including lawyer fees and lost time. time and effort.

Fraud through prepayment

Prepayment fraud is one of the most common forms and causes significant losses for businesses and individuals involved in international transactions. This is often a technique that thieves use to take money from buyers without providing goods or providing poor quality goods, leading to financial loss and reputational loss of the buyer.

The buyer may have to pay part or all of the order value before receiving the goods. Once the crooks receive the money, they may disappear or refuse to deliver the goods, resulting in significant financial loss for the buyer. Once the down payment has been made, the buyer may have to spend additional time and effort searching for legal options or trying to resolve the issue with the fraudster. This not only causes financial loss but also reduces business performance and increases costs.

Falling prey to prepayment fraud can damage the buyer’s reputation in the international trading community. Other businesses may avoid dealing with them in the future, affecting their ability to expand their market and grow their business.
When encountering cases of prepayment fraud, buyers may lose new business opportunities and lose confidence in the international market. This can cause limitations in expanding markets and finding new cooperation opportunities.

Fraud through fake documents

In the crooks’ strategy, creating fake documents such as invoices, certificates of origin and related documents is not only to deceive buyers but can also defraud financial institutions such as bank.
When receiving fake documents, the buyer may pay for an order that does not exist or has a significantly reduced value. This leads to financial losses for buyers and causes distrust in the international trade process.

Cases of fraud through fake documents not only affect finances but also damage the credibility and reputation of both parties involved in the transaction. Buyers may lose trust in business partners and conversely, partners may also lose credibility in the trading community.

Awareness and prevention of fraudulent cases in international goods trading not only helps protect assets but also contributes to creating a healthy and sustainable commercial environment.

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