Is My Chinese Supplier a Scam? 12 Patterns and the Checks That Catch Them

The question "is this supplier a scam?" usually arrives after the deposit has been sent, and at that point the honest answer is that the options are poor. The same twelve patterns account for almost every loss we read about and hear about, and each one has a check that costs an hour or less. This guide describes the pattern, the tell, and the check, in rough order of how much money each one takes from importers. It does not name companies; the patterns matter more than the names, which change.

The twelve patterns#

1. The bank-account switch (business email compromise)#

What happens. Weeks into a normal order, an email arrives from the supplier's usual address, or one letter off from it, saying the company's bank account has changed for tax, audit or "foreign currency" reasons. You wire the balance; the real supplier never receives it. The FBI's IC3 counted 24,768 business email compromise complaints and about USD 3.05 billion in reported losses in 2025, and its earlier advisories identified banks in China and Hong Kong as the most common destination for the diverted wires. The scammer is often sitting inside the supplier's hacked mailbox, reading the thread and timing the message to the real invoice.

The tell. Any change of payee, bank, country or account number by email, however plausible the reason. Look-alike domains (a dropped letter, .cn swapped for .com), a sudden switch to a personal webmail address, or pressure to pay "today".

The check. Confirm every change by voice on a phone number you already had from the contract or the business licence, never on one in the email. Keep bank details in the signed contract, stamped with the company chop, and treat the contract as the only source. Send a small test wire to a new account before the balance. Require two people to approve any payee change on your side.

2. Payment to an account that is not the company#

What happens. From the first invoice, the payee is a person, a Hong Kong company with a different name, or an "agent". The goods may or may not arrive; when they do not, you have paid someone with no contract with you.

The tell. Payee name on the invoice does not match the Chinese company name on the business licence. Reasons offered: "the boss's account is faster", "our export company", "to avoid tax".

The check. Pay only to a company account in the exact licensed name. Since December 2022 any licensed Chinese company can export without a separate foreign-trade registration, so there is no legal reason to route payment through another entity. If a Hong Kong company is used, it must be named in the contract and verifiable in the Hong Kong Companies Registry e-Search. How to read the licence is in how to check a Chinese business licence.

3. The vanishing deposit#

What happens. A factory in financial trouble takes 30% to 50% deposits from several buyers, delivers nothing and closes. Sometimes it first offers a discount for a bigger order with a higher deposit.

The tell. Unusual willingness to cut price in exchange for a larger deposit; long silences after payment; the sales contact leaves; the company's gsxt.gov.cn record shows abnormal-operation listings or recent changes of legal representative.

The check. Look the company up on gsxt.gov.cn before paying and again before the balance. Keep the deposit at 30% and the balance after inspection. For orders above your pain threshold, a pre-order factory audit confirms the lines are running and the order book is real.

4. The trading company that says it is a factory#

What happens. Not always fraud, but the root of many disputes. A trader shows another factory's photos, quotes a factory price plus a hidden margin, and cannot control quality or lead time because it does not control production.

The tell. Business scope on the licence lists only sales or trade verbs; the "factory" address is an office tower; the salesperson cannot answer process questions; a video call never reaches the shop floor.

The check. Licence business scope, a live video walk of the lines for your product, and the full test in factory vs trading company.

5. The price that is too good#

What happens. A quote 30% to 50% below every other quote you collected. Either the goods will not come, or they will come in a lower grade, lower count, or with a surprise charge before release.

The tell. Nobody else can get near the price; the supplier does not ask the questions a real factory asks (tolerances, packaging, certification); MOQ is suspiciously flexible.

The check. Collect five quotes before you believe any. Use the price range as a fraud filter, not just a negotiation tool. Ask for the cost breakdown; a real factory can explain its materials and labour.

6. Sample bait and bulk switch#

What happens. The approved sample is perfect; the bulk is a different material, a different factory's output, or short by 10% to 20% per carton.

The tell. The supplier resists a pre-shipment inspection, or wants it done by "our QC". Production photos avoid the product.

The check. Sign the golden sample, write it into the contract, and book an independent pre-shipment inspection against it before paying the balance. Count cartons at loading.

7. The cloned website or copied store#

What happens. A website or marketplace store with a real factory's name, photos and certificates, operated by someone else. Payment details lead to a different company.

The tell. The domain was registered recently; the "factory" has several websites with different contact details; the Alibaba store is new with few transactions but a large catalogue.

The check. Check the domain registration date, search the company name in Chinese on gsxt.gov.cn and compare the registered address with the website, and call the landline listed on the public record rather than the one on the site.

8. The certificate that is not real#

What happens. CE, FCC, RoHS, BSCI or ISO certificates that are edited, expired, issued for a different product, or from a body that does not exist.

The tell. Low-resolution PDFs, mismatched product models, a certificate number that does not verify on the issuer's site.

The check. Verify every certificate number with the issuing body online; for ISO, use the certification body's public register. For products that must be tested for your market, commission your own test on a production sample. See product certifications explained.

9. The hostage shipment#

What happens. Goods are produced and loaded, then a new charge appears before the bill of lading is released: "export fee", "customs inspection", "container surcharge". Pay or the goods sit.

The tell. Charges not in the contract, appearing after the balance is paid or when the goods are at port.

The check. Use an Incoterm you understand (FOB with your own forwarder keeps the export side with the seller) and name all charges in the purchase order. Your forwarder should hold the booking, not the seller's. See EXW vs FOB vs DDP.

10. The "verified" badge as the only proof#

What happens. A buyer trusts a platform badge (Verified Supplier, Gold Supplier, years on platform) and skips due diligence. The badge is bought or reflects a paid check at a point in time.

The tell. The supplier's answer to every verification question is the badge.

The check. Treat badges as a filter, not proof. Run the licence check and a video walk anyway. How to read the badges is in how to verify an Alibaba supplier.

11. The agent who is paid by the other side#

What happens. A "free" sourcing agent, interpreter or guide who steers you to suppliers that pay them a commission, inflates quotes, or buys from a relative's trading company.

The tell. No fee asked; suppliers all seem to know the agent; refusal to show original supplier invoices.

The check. Pay your agent and ask for supplier receipts. The vetting list is in China sourcing agent: what they do and how to check one.

12. The mould and IP grab#

What happens. You pay for tooling or share drawings; the factory registers your design or trademark in China, sells your product to others, or refuses to release the mould you paid for.

The tell. No NNN agreement, no mould ownership clause, your brand name not registered in China.

The reverse also happens: a seller that openly offers other brands' logos or "1:1" copies is a warning sign on its own, because those goods are seized at the border; see buying branded goods from China.

The check. Sign an NNN agreement in Chinese law with the real entity, write mould ownership and return terms into the contract, and register your trademark in China before you show it to anyone. The U.S. Commercial Service's China guide stresses that the first-to-file system allows bad-faith registrations unless you file first.

The three habits that stop most of this#

1. Verify the legal entity. Business licence, gsxt.gov.cn record, company bank account in the same name. Thirty minutes.
2. See production, live. A video walk of the lines making your product, or a third-party audit for anything large. One hour, or USD 300–400 for an audit.
3. Inspect before the balance. An independent pre-shipment inspection against the signed sample, and a deposit no higher than 30%. USD 300 per man-day.

A supplier who objects to any of the three is giving you the answer.

If you already paid#

• Within hours: ask your bank to recall the wire and contact the receiving bank; funds that have not been moved on can sometimes be frozen.
• Within days: report to your national fraud centre (IC3 in the US, Action Fraud in the UK, the Canadian Anti-Fraud Centre) and to the platform if the order ran through one; open a Trade Assurance dispute if it applies.
• Collect evidence: full email headers, the contract, the licence copy, payment records, the supplier's public record from gsxt.gov.cn, and screenshots of the store or website before it disappears.
• Consider a police report in China: for a factory that took deposits and closed, a criminal complaint in the supplier's city is sometimes more effective than a civil claim, though lawyers who handle these cases warn that police may treat it as a commercial dispute. A lawyer with criminal-complaint experience in that province is the right contact.
• Do not pay to "release" anything after a confirmed fraud; the second payment is part of the same scheme.

Patterns and figures were checked in October 2026. The mechanics change little from year to year; the names, websites and excuses change constantly.