How to pay a supplier in China without falling for fraud

For first-time importers, the biggest fear is usually quality. But the risk that costs small and medium-sized companies the most money is a different one: paying into the wrong account. The good news is that a few simple rules prevent it.

How the most common fraud works

It is known as account change fraud or business email compromise. Someone gains access to a supplier's email, or creates an almost identical address, and waits for the moment of payment. Then they send a convincing message: “our account is under audit, please pay to this new account”. The email has the same style, the same signature and even the correct order number. The money goes to an account controlled by the fraudsters and is very hard to recover.

• It happens right before a large payment: the deposit or the balance.
• The email address may differ by a single letter or in the domain.
• It usually comes with urgency: “pay today or the shipment will be delayed”.
• The new account is often in another country or in the name of an individual.

Five rules that protect you

1. Pay only into company accounts whose holder exactly matches the name of the company selling to you. Never into personal accounts.
2. Be suspicious of any change of bank details received by email, however convincing it looks.
3. Confirm the details by phone or video call, using a number you already had, not the one in the suspicious email.
4. Before the first payment, check that the company exists in the official registry (see below).
5. Check that the proforma invoice, the contract and the account are all in the name of the same company.

A practical rule: if someone asks you to pay urgently into a new account, the right answer is always “I'll confirm it by phone first”.

How to verify a Chinese or Hong Kong company

Companies in mainland China have an 18-character Unified Social Credit Code and are listed in the National Enterprise Credit Information Publicity System (gsxt.gov.cn). Hong Kong companies have a business registration number and a company number, which can be checked in the official Hong Kong companies registry (ICRIS). Ask your supplier for these numbers and check that the name, status and address match.

At Supro Group we publish the registration numbers of our three companies, with links to the official registries, so you can verify us before you buy.

Recommended payment structure for a first order

The usual practice with a new supplier is to pay a deposit, normally 30%, to start production, and the remaining 70% after an inspection and before shipment. That way you never pay all the money up front before seeing the finished goods. Be wary of anyone who demands 100% in advance on a production order.

• Deposit against a proforma invoice with all the agreed details.
• Balance against the inspection report with photos, before shipment.
• Bank transfer (T/T) to the company's account; keep the payment receipts.
• For large orders, a letter of credit adds security in exchange for more cost and paperwork.

If you have already paid into a suspicious account

Act immediately: call your bank and ask it to try to stop or reverse the transfer (the sooner, the better the chances), notify the real supplier by phone and report the case to the authorities in your country. Change your email passwords: sometimes the breach is on your side, not the supplier's.

Summary

• The most common risk is not quality, it is paying into the wrong account.
• Only company accounts in the supplier's exact name.
• Every change of bank details is confirmed by phone or video.
• Verify the company in the official registry before the first payment.
• 30% deposit, 70% after inspection.