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Confirming a Supplier Scam in China Red Star Detective Agency’s Role

Confirming a Supplier Scam in China Red Star Detective Agency’s Role

Confirming a Supplier Scam in China: Red Star Detective Agency's Role

Project description:

Summary:

A German company entered into a contract with a Chinese supplier, Company B, which promised strong production abilities and competitive prices. However, as soon as the German company paid the first installment, Company B ceased communication, raising suspicions of a scam. The German company engaged the Red Star Private Detective Agency in China to investigate. The agency found discrepancies in Company B’s information, including a non-existent phone number. They discovered that the company’s office was a sham, located in a residential building. Red Star concluded that Company B was a “shell company” scam. The case highlights the importance of due diligence for foreign companies looking to work with Chinese businesses to avoid scams and poor supplier experiences.

Key Highlights:

  • A German company contracted with a Chinese supplier, Company B, based on promises of strong production abilities and competitive prices.
  • After making the initial payment, Company B stopped communication, raising suspicions of a scam.
  • The German company engaged Red Star Detective Agency, which discovered discrepancies in Company B’s information.
  • They found that Company B’s office was in a residential building, confirming it as a “shell company.”
  • The case emphasizes the need for foreign companies to thoroughly vet Chinese business partners to ensure they are legitimate, capable, and trustworthy.
Confirming a Supplier Scam in China: Red Star Detective Agency's Role

Case details:

A German company chose a Chinese company, Company B, as its supplier. Company B had convinced the German company that it had strong production abilities, technical skills, and offered the best prices for the product they needed. After a lot of discussions, the German company signed a contract to buy from them. But as soon as the German company paid the first payment, Company B stopped answering them. The German company got worried and thought they might be caught up in a scam. So, they got the Red Star Private Detective Agency in China to check out the Chinese company.

The detectives from the Red Star Detective Agency started by looking at Company B’s records with the Chinese Administration for Industry and Commerce. They found that the phone number Company B had given didn’t even exist, and lots of other info about the company didn’t match what they told the German company. Using this info, the detectives dug deeper into the boss and the contact person’s details and figured out where the company’s office was.

When they went to check it out in person, they saw that the office address was in a building that was meant for living, not business. The office had been empty for a long time, and the people who took care of the building said hardly anyone ever went to the office. When they saw all this, they quickly told the German company what was going on. They figured out that the Chinese company didn’t really have a fixed place for their business or real products. The addresses they gave to clients were all fake. This Chinese company was what you call a “shell company,” and it was a scam.

The Red Star Detective Agency has a big point to make: Foreign companies that want to buy stuff or work with Chinese companies should check them out first. This makes sure the new Chinese supplier or partner is a real business that’s officially registered, can really make the stuff they promise, and has a good history of paying their debts. Doing this will help you avoid getting mixed up with scammy companies in China that can give you a really bad experience with your suppliers.

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