Most of the supplier fraud cases that reach our disputes team share a depressing feature: the loss was preventable with about an hour of verification before the first payment. Here is the checklist we run for clients.
1. Verify the company exists — exactly as named
Pull the official registration record from the National Enterprise Credit Information Publicity System using the supplier's Chinese name (the English name on a website or card has no legal status). Confirm: registered status is "存续" (active), the business scope covers manufacturing or sale of your product, registered capital is plausible, and the establishment date matches the "15 years of experience" claim.
2. Match the bank account to the company
The single highest-value check: the beneficiary account name must exactly match the registered company name. Payments to a director's personal account, an affiliate in Hong Kong with a similar name, or "our finance company" are how most unrecoverable losses happen. A legitimate factory can always receive payment in its corporate account.
3. Check the litigation record
Chinese court judgments are public. We search for the supplier (and its legal representative) in judgment databases and enforcement-defaulter lists. A pattern of quality-dispute losses, or a legal representative on the dishonest-debtor blacklist, ends the conversation.
4. Confirm who you're actually dealing with
Trading companies posing as factories are endemic. Ask for the manufacturing licence and a production-site address, then verify against registration records. A video walkthrough with the company name visible is a reasonable ask in 2026 — refusal is information.
5. Paper the deal before the deposit
Verification tells you who the supplier is; only a contract controls what happens when something goes wrong. Before wiring a deposit, have a bilingual purchase agreement with quality standards, delivery terms, and a Chinese-forum dispute clause — and sign an NNN if any designs change hands.
The red flags that should stop a wire
- Beneficiary name ≠ registered company name
- Pressure to pay 100% upfront, or discounts for skipping contracts
- Refusal to provide a business licence copy ("company policy")
- A "new account" notification mid-transaction — classic email-compromise fraud; verify by phone on a known number before redirecting any payment.