Dec. 19, 2023

Shandong is a province in north and east China, where is the hometown of Confucius. In recent years, more and more vendors of steel products in Shandong province were becoming dishonest, and even scammers. And most of them came from a city called Liaocheng in Shandong province, and some of them established their companies in Jinan city, which is the capital of Shandong province.

Regarding their ways of fraud, in fact there is nothing new.

Scamming trick one: low price, but very inferior products. We have a case which was started from three years ago, a steel product supplier in Liaocheng city, sold two orders of stainless steel plate to our client who has two companies, one is in Israel, another is in Bulgaria, of course the prices were very competitive, however, after receiving the cargos, our client found that the cargos were not stainless steel at all, but ordinary steel plate, which of course was much much cheaper than stainless steel plate.

Scamming trick two: low price, and short delivery. Low price is the beginning to trap client, and after receiving the cargos, foreign importers will find that the delivered cargos actually were 1/2 or even 1/3 of ordered quantity.

Scamming trick three: low price, and no delivery at all. Same to above one, low price is the beginning to trap client, and after receiving the pre-payment, the scamming supplier will manage to ask the foreign importer to pay more money. In one case, the supplier setup valid period of the price in proforma invoice to be 3 days; after three days, and after the foreign importer pay the prepayment as per agreement, the scamming supplier said that the price valid time is three days, now it’s expired, so we will setup a new price, which is higher, so you need to pay more prepayment.

Valid period of price only exist in quotations, when the supplier setup this valid period, is to urge the buyer/importer to consider to accept the price/quotation earlier. But the price in proforma invoice generally is ascertained, while proforma invoice will be considered as the symbol of closing of a deal, so the price on proforma invoice cannot have a valid time. Obviously, it’s a scamming trick.

We had ever heard of about 10 similar cases, of this type of Shandong steel product fraud, and these cases may have below common characters:

• The problem supplier companies are in cities of Liaocheng or Jinan, of Shandong province;

• They may have a same-name off-shore company, who has one NRA account (off-shore account) in Zhejiang Chouzhou Commercial Bank, which is a Yiwu local bank headquartered in Yiwu, Zhejiang, China;

• Their price is extremely low, might be even lower than market price; of course this is their key measure to trap clients.

If you find your Chinese suppliers have above characters, you need to be very cautious, and it’s strongly recommended not to do business with them at all.