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Features of Chinese LC Business Fraud
Several L/C business fraud cases in China have been witnessed among our clients worldwide, here are the features of those cases. 
 
1.Chinese L/C business fraudsters - actually located in North China: Shijiazhuang, Zhengzhou, Qingdao, Dalian, Tianjin - create a new trading and export company, usually for one year and pretend to be manufacturers online but they will never put on their Business License and other certificates on their website.
 
2.Their websites are rent for one year from non traceable hosts (Korea, USA etc.) and composed of standard-modules, all the websites have an absolutely identic layout with the same functions. Also they will use ‘fake address’ or non-exist address on their website. 
 
3. They do not present their complete set of documents and licences for due diligence with different kinds of trivial excuses: 
a. Company / Business Licence (they will offer fake licenses sometimes)
b. Bank Account Licence (and the complete bank coordinates and contact data of the bank officer)
c. Foreign Trade Registration / Export Licence
d. Copy of Tax Registration
e. ISO Certificates
f. Copy of the ID-card of the company owner and general manager
g. Coordinates of the Insurance Company and the contact person
h. Coordinates of the Shipping Company and the contact person
The range of their different (rotten) excuses is nearly unlimited...
 
4. If you ask for the direct phone number and the direct email address of the director of the company or the general manager, you will never get, indifferently how many times you ask for. They normally use a mobile phone number or a single emailbox to contact the buyers. No fixed office number is available. 
 
5. If you ask them to accept local third-party‘on-site factory auditing or inspection’services, they will decline or disappear suddenly. Normally the big importers will use professional auditing services to protect their interests in China, especially when they know nothing about Chinese. Only local experts can find out the truth for them in China sometimes. 
 
6. They insist on their own shipping agency and on the fact that they will do by themselves the quality and quantity control. Some professional scammers will be able to change the items in the container during the transportation in China, say, from the factory warehouse to the port yard. 
 
7. Payment:
(a.) they insist on a pre-payment/deposit of usually 30% TT, but do not give any guarantee for the countervalue
 
(b.) they do not accept a Bank Guarantee or a deferred LC
 
(c). if the accept LC, then only an irrevocable, confirmed, non divisble, non transferable LC 100% at sight
 
8. They offer big quantities of commodities (non ferrous metals) for prices which are far below the world market prices (even the manipulated LME prices).
 
9. After they have sent their offer, you get ’bombed‘ by their standard emails every day: 
?Hello, my dear friend, how are you? When will you open the LC for us? Please tell me again the name and coordinates of the issuing bank.“
 
10. They will sign with you any kind of agreements and issue whatever document you want and ask for (Working Agreement - IMFPA - Guarantee of Price and Delivery etc.), because they know from the very beginning, that they will disappear and never keep the agreements.
 
11. They use a ‘fake’identity card or ‘steal’a real identity card to register a company.
 
12. Conspiracy with their shipping agent:
(a.) they change the goods inside the container on the way to the yard with a fake seal number (or they even dismantle the container door without breaking the seal number.)
 
(b.) they issue a falsification/fake of a real, existing, official BL; they get the original BL number from their contact person from the shipping agency
 
13.After they have got the money, they disappear - they do not answer your mails. The phone line is 'dead’, the fax (if they have... usually they use only one number for phone and for fax) does not connect; they disappear from Skype as well... There is no possibility to get into contact with them.
 
Please read here to know how to cope with such cases in China. 
 
Source: STIN Verification Team and Dr. Harald Dasinger, a sourcing expert from Germany
 
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