Knowledge in advance enables one to be prepared...
Let’s face it. Doing business is fraught with unforeseen risks and unpredictable circumstances. However, with our knowledge and experience, we can minimize the probability of loss. PaperIndex encourages its members to make themselves aware about the risks involved in trading on the Internet and use their sound judgment in dealing with newly found trading partners. To make your trading experience easy and safe, we provide you as much information as possible about potential buyers and suppliers. Below are some safe trading guidelines to help you trade safely in our marketplace.
Before engaging in any trading activity, always check the credentials of your potential trading partners. Trade associations, local or online credit agencies, and companies such as D & B (www.dnb.com) can help you check the background of established businesses. In many countries, offices of Registrar of Companies or Secretary of State provide the company registration information on their websites. Visit the website of registration authorities of your prospective partner’s country to find out if it’s a legitimate and licensed business.
It is always advisable to contact your prospective partner by telephone prior to initiating any trading activity. If you see inconsistent contact details, for example an address in one country and phone number from another, we recommend you look up the address in the local phone directory of that country to obtain the phone number. Call the number (even if it’s long distance) to confirm that the person you are in touch with actually works for the company. Be suspicious of any person who uses only e-mail address and cell phone for communication and is reluctant to reveal a telephone number.
Address and fax number
Beware of the companies that provide only PO Box number and fax number as their contact information on their websites. (PaperIndex doesn’t allow the businesses to list their company if they provide only the PO Box and fax numbers in their contact information.)
Do not solely rely on email to contact and conduct business with new business partners. Emails coming from a company’s domain do not suggest that the company is real and genuine. It’s easy to forge email addresses and even if the emails are coming from a company’s domain name, the business owner may still be untraceable.
Having an impressive website doesn’t guarantee the existence or legitimacy of a business entity. A content-rich website with well-presented company and product information indicates the professionalism of the business owner / management however; this shouldn’t get you lulled into a false sense of security.
If you are a buyer
Be extra cautious when a supplier is offering to sell at a price substantially below the current market price.
If you are a supplier
Be wary of buyers who offer to buy at an above-market price.
It is easy to be tempted by lucrative offers, but they are often attempts to swindle. Remember, if it sounds too good to be true, it probably is.
If you are a buyer
If a supplier wants advance payment before fulfilling the order, make sure you have done a background check on the supplier. If you haven’t done any background check, refuse to pay the advance or ask for a different form of payment. If a supplier seems to be too focused on payment than any other issue, extra caution is warranted. Additionally, do not transfer funds to personal bank accounts. Also, be cautious if the bank account of the supplier is located in a different country than the shipping address.
If you are a supplier
If you are dealing with an unfamiliar party, avoid selling your products on open-account in which case you are extending credit to the buyer. Instead, ask the buyer to open a letter of credit (L/C). However, due to forged documents there is some possibility of fraud in case of letter of credit payments too. Minimize the potential for fraud by contacting the L/C issuing bank. Be sure to check the L/C number, name and address of the issuing bank, shipping date, validity date, opening date, opening place, loading and unloading ports, period of presentation, L/C amount as well as the details of partial shipment and trans-shipment.
More about payment methods…
Escrow servicesIt is advisable to use escrow services when dealing with new business partners. Both buyers and sellers are protected using escrow services as escrow companies act as an independent third party to protect the interest of buyers and suppliers.
I. Escrow services track the shipped merchandise and verify that it was delivered.
II. The supplier isn't paid until the buyer accepts the merchandise, or the inspection period expires.
I. Escrow service confirms when the buyer receives merchandise.
II. The supplier is authorized to ship only after the escrow service verifies that the buyer has deposited the funds.
Escrow services provide the peace of mind to both – buyers and suppliers. However, beware of fraudulent escrow services if you are thinking of using online services. For more information about online escrow fraud, please visit
Telegraphic Transfer (T/T)
It is not wise to accept a supplier's request for pre-payment using telegraphic transfer. In most cases, a request for T/T payment involves an attempt to defraud.
Money transfer using Western Union and MoneyGram
Many cases of fraud involve payment via Western Union and MoneyGram, where after a buyer sends money, the receiver breaks contract and disappears. It’s not possible to trace the real name and address of account holders with money wiring services such as Western Union and MoneyGram.
If you are a buyer
Request samples to check the quality of product. Order a sample before placing a bulk order to make sure the product meets your requirements. Be prepared to pay for samples - including the shipping cost.
If you are a supplier
As a seller, always request payment for sample and / or its shipping cost before dispatching the sample, especially if your product has a high resale value.
As a buyer, you should order pre-shipment inspection of products to protect yourself against the poor quality of goods. You can demand the inspection as a condition and link it to payment. Pay close attention to shipping or contact addresses located in countries with a high incidence of online fraud such as Nigeria.
You should prepare a legally binding trade contract, which should include sales terms and conditions, payment method, an arbitration clause, product specifications, quality inspection, etc. Also, have your attorney or accountant review the contracts before signing it.
Make sure you have taken enough precautions before conducting business in regions with high reported incidences of online fraud such as Eastern Europe, Western Africa, and Central America.
Unfortunately, not every precaution works and as in offline world, not every trade goes well. If you are unhappy over a situation:
Contact your counterpart directly
In most cases, the business partners can negotiate and arrive at a solution. Contact your trading partner and arrange a telephone call or face-to-face meeting. This usually resolves the situation. Most buyers and sellers are honest and dependable and problems may simply be a matter of misunderstanding due to language or cultural differences.
Try a third party mediation service
Third party mediators attempt to contact the concerned person and try to resolve differences fairly.
Try to organize a "chargeback"
If you have paid by credit card, contact your bank to see whether they offer a "chargeback" service. A “chargeback” reverses the credit card charge, and is similar to a refund.
Contact the local Consumer Affairs agency or inform law enforcement authorities
If none of the above measures are effective, you can contact your local Consumer Affairs organization inform law enforcement authorities in your and your trading partner’s area.
You should also immediately contact PaperIndex about any suspected cases of fraud involving PaperIndex members so that we can review the status of the member's account.
Following is a collection of links that members can visit for further information about safe trading on the Internet:
|Internet Crime Complaints Center (IC3)||www.ic3.gov|
|National Consumers League's Fraud Alert System||www.fraud.org|
|FTC Complaint Assistant||www.ftccomplaintassistant.gov|
|Association of Certified Fraud Examiners||www.acfe.com|
|Financial Crimes Enforcement Network (FinCEN)||www.fincen.gov|
|Better Business Bureau||www.bbb.org|
|Anti-Phishing Working Group||www.antiphishing.org|
At present, when a user reports a case of fraud to us, we block the suspect's company profile and their buying and selling leads and cancel their membership to eliminate the possibility of repeat offences. We also maintain a blacklist of offenders to ensure that they do not gain admittance to PaperIndex at a later date. Please note that these steps are taken on the suspicion of fraud, before obtaining evidence. The PaperIndex User Agreement provides that PaperIndex can cancel suspected/offending member's membership privileges at its own discretion.
PaperIndex does not and cannot act as a mediator in disputes between buyers and sellers regarding cases of fraud. By its very nature, international fraud is extremely difficult to prosecute effectively and resolve satisfactorily. All PaperIndex members are advised to be vigilant at all times.