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Import Export Institute

Avoid Import Export Scams

Those who are true import export professionals typically do not fall victim to scams and frauds – we never say never, as on a very rare occasion, and I mean rare, a seasoned import export broker or import export trader will have a run-in with a less-than-honorable transaction.  However, those import export brokers that  are very new to the industry or those that  have attempted international transactions with little or no training do fall prey to scams and frauds.  How does it happen?  Far too easily, and usually with the promise of a big profit.  We all have good intentions when conducting business and we all assume the person on the other end of the transaction is as honorable and reputable as we are.  But, that’s not always the case.

How can you protect yourself? First, learn as much as you can. Do not read a $40 book (I know we keep coming back to that, but there are too many honest folks out there that do believe reading a cheap book will make them an expert) and expect to know everything you need to learn. When you know all the details about the business, you will be able to recognize when something is not being presented the proper way. Second, do not deal with a free email account. You cannot verify a free email account and those email accounts come and go. This is not to say that EVERYONE with a free email account is a fraud, but almost every fraud involves a free email address.  Third, watch the countries known for scammers like Ghana and Nigeria.  There are more scams coming out of Eastern block countries like Romania as well.  There are legitimate businesses operating in those areas, but if something is being presented that sounds too good to be true, it probably is. Always use common sense!  Don’t let dollar signs cloud your judgment. If a stranger, who you have never met, is wanting to wire millions of dollars into your bank account, that should be enough for you to apply the brakes!

Oftentimes, the scam is not millions of dollars because, that would raise a big red flag.  Sometimes the scam is just for a few hundred dollars or maybe a thousand. How they get you is they send you a product request.  You reply with a quotation, then you are informed that your proposal has been accepted, but in order to conduct business with you, your business must be registered in their country. That will be $700. But, don’t worry, you can add that $700 to your transaction and get the fee reimbursed.  Then, you must hire a representative in that country (usually a lawyer or barrister) to complete your paperwork for a fee of $500.  And, it goes on. These small fees may sound reasonable, and they aren’t huge amounts of money, but they all add up.  In the end, you will be out money and not have a deal.  They may even send you official looking documents and certificates, but most of us can recreate those with a document creator program.

We’ve talked about the money factor, let’s talk about time. You can earn back a few hundred dollars, but the two days you wasted in gathering quotations and talking to suppliers – you won’t get that back. Additionally, what are those suppliers going to think of you when you take up their time and no deal results? They may not be eager to take your call again when you are contacting them with a REAL transaction.

If you have a business in another country you are dealing with and you have any hesitation, call the U.S. Embassy and talk to a Trade Representative. The U.S. Foreign Officers are there to serve YOU and can help you in determining if that business is real or maybe you were given the address of a parking lot.  Additionally, look at their website. Does it look like a free website? You can verify the identity of the person who registered the website and the registration address.  Ask the person you are dealing with if they belong to a trade organization that you can verify.  Check the government’s “Denied Party List.” A trade professional would know to have done that even before wasting time gathering quotations. You probably won’t read that information in your $40 book or watching that webinar that promises you can make a 6 figure income in 2 hours a day in import export. That’s another scam in and of itself.

When it comes down to it, common sense will always prevail.  Remember if it sounds too good to be true, it probably is.  Do not be a victim!!

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