Spotting the difference Genuine Factories and Fake Firms
Fraud runs deep in China's steel export industry. In addition to the fraudulent activities discussed above, there's also the problem of impersonating steel production companies.
Many companies use a business model that separates sales companies from production units. Essentially, this practice separates production from the company in order to mitigate risk. However, this provides an opportunity for some fraudulent small companies to impersonate actual steel mills during negotiations.
The usual approach is for salesmen to contact you, claiming to be from a production company, when in fact they are small individual companies. When you visit the factory, they'll take you to the production site they've described, where they've prepared an office and desk for you to use throughout the inspection process. But when it comes to payment, there can be discrepancies if the receiving account doesn't match the factory's details. The vendors might explain this by saying that the production and sales companies are separate. In reality, they're just small trading companies with a cooperation agreement with the factory, not actual producers.
There are significant risks in working with these small companies:
1. The quality cannot be guaranteed; although the contract specifies 1.5 mm thick steel, they may deliver 1.0 mm.
2. They may promise you 20 tonnes of goods but deliver only 10 tonnes, effectively cutting your order in half.3.After receiving payment, they might delay delivery beyond the agreed time, waiting for industry prices to fall before delivering. Or they may hold your money for months before shipping.
4. Worse still, some small companies may take your money and never deliver!
How can you spot these fraudulent companies? It can be a challenge as they can be very convincing. Their official websites can also appear genuine. You need to do your research to avoid falling into their traps. When choosing a cooperative, look for larger, well-established companies with a longer operating history.
A special reminder: many customers have reported that such incidents are common in areas such as Jinan and Liaocheng in Shandong Province. Be vigilant, don't be fooled by their sweet talk! Keep these points in mind and avoid falling into the trap!
MESCO STEEL
Protect Your Business with MESCO STEEL - Your Trusted Partner in Foreign Trade!
[Max Wang]
[General Manager]
[MESCO STEEL]
[mesco@mescogroup.com.cn]
[WhatsAPP+86 15134565556]