Wire the Payment for Goods to Another Bank Account? No, No, A millions Times No.

Background

Recently, a European client (“Client”) reached us and told that he’s deceived by internet hackers. I introduce the scenario as follow:

The Client entered into a sales contract with his Chinese Supplier, with the payment terms: 30% TT in advance, 70% paid within 15 days upon receiving the subject goods. After receiving the goods, the Client received an email from” the Supplier”, asking him to wire the remaining 70% to another bank account, which is totally different account from the Supplier’s. The Client wired the payment as instructed. A few days later, he received another email from the Supplier, asking him why he still hasn’t paid the remaining balance. Until this moment, the Client realized that he was deceived by internet scammer.

In the past ten years, this is just one of hundreds of internet scammer cases that our team has been heard and/or dealt with. I have always advised my oversea clients that do not wire the payment for goods to your Chinese suppliers just by the email’s instructions, most of these emails are actually sent by internet scammers, not your Chinese Suppliers.

Key Points

Here are some key points for your reference, if you receive such emails:

1. Chinese Suppliers rarely change its bank account for receiving payment of goods. Usually, the bank account for receiving payment is provided in the Sales contract/Proforma invoice, and commercial invoice, and the bank account information in these documents shall be completely matched.

2. Please check whether the email asking you to wire the payment to another account is completely the same as the one your Chinese supplier used when entering sales contract. In some cases, we found the two emails are almost the same but just with one letter different. If you find the two emails are different, it could be sent by internet scammer.

3. If the bank account, especially the beneficiary, is not the Chinese Supplier, it is very likely provide by internet scam.

4. Even when you find the two emails are completely the same, do not wire the payment as instructed. Please contact your Supplier via telephone, whatsapp, Wechat or other Instant Messengers, which you two had used to communicate with each other, and arrange a videoconference to verify whether the email demanding payment to another bank account is actually sent by the supplier. Do not use email to arrange the videoconference.

5. In order to secure your payment, it is also suggested to ask your Chinese attorney or someone in China you trust to verify the matter with you Chinese Supplier.

6. Even thought the new bank account is provided by your Chinese Supplier upon verification, we suggest you entered a new written agreement on changing the bank account information, so as to mitigate your risk.

Anyway, do not wire the payment to any other bank account, different from that provided in the Sales contract/proforma invoice, before you can 100% sure the new bank account is actually provided by your Chinese Supplier.

Disclaimer

• The article is an important work product and copyright of CHAN & LEE PARTNERS. If you intend to reprint it, please specify the source.

• This article has been prepared for general reference purposes only and should not be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.