You receive an email from your supplier requesting payment for an order into an unfamiliar bank account belonging to a different company that they claim is their export company, and you pay it because the email address sending you the request is correct.
In some unfortunate cases, though, it turns out that a scammer has somehow gotten access to their email and the bank account wasn’t actually your supplier’s after all.
You’re out of pocket and neither you nor your supplier wants to take responsibility for the payment lost to a scammer.
So, how can importers be sure that the company and bank details being provided by a supplier are legitimate, especially if they’re unfamiliar?
By performing this fast, effective supplier bank account verification.
We help confirm the bank account provided is that of your supplier and we document it.
You should perform this check at the very beginning (before the first payment) of a relationship with a new supplier, or in case of any change in the bank account or email address that they usually provide.
We follow this process:
- Get the website, or Alibaba/GlobalSources/Made-In-China profile, of the supplier, if any, and note the phone number shown on that website/profile.
- Call the phone number from the site, and ask for confirmation that the contact person you provided actually works for that company.
- Call the phone number provided by the client, and ask for confirmation that it leads to the contact person given to them.
- Get the bank account information in English from the supplier by email: bank name, bank branch name & address, SWIFT address, bank account number, account name and address.
- Confirm it’s a company bank account, and the company name seems to be the same one as communicated by the client.
- [If the company is different] Request a letter from the supplier, in Chinese, with their company chop, certifying that they want payment on that other company’s bank account (insert all the details of that company and that bank account in the letter) and any payment to that other company will be treated as a payment to their own company for all commercial and litigation purposes.
- If the supplier’s bank account can only receive USD (which is rather common in China) and the transfers can only be initiated from overseas, the client (you) sends a small USD amount to the supplier, without telling them what that amount is.
8. If the supplier’s bank account can receive an in-country payment, Sofeast sends them a very small sum from a local bank account as a test payment (typically not by SWIFT and as a local payment, but using the bank account information in English provided by the supplier).
9. Get the supplier’s confirmation of receipt, and their confirmation of the right amount, both by email (note the email address) and by phone (note the phone number), and also get their confirmation that they did send the email.
We need information about the supplier: company name & address; contact information including contact person name + phone number + email address; and an email introduction to the supplier.
If you know their website, or their Alibaba/GlobalSources/Made-In-China profile please let us know, too.
Yes, we usually check bank accounts in China, Hong Kong, Vietnam, and India, and we may be able to do so in other SE Asian countries, too.
In China, if the payment can be sent in RMB, we can usually send it for no extra cost (count up to 1 week). In Hong Kong, Vietnam, and India, we can also send a bank wire there, but an extra 30 USD fee applies.
Looking at the bank account information alone, we won’t be able to immediately match it with the company’s official registration name or number, unfortunately, without making a test payment to confirm it. This is why:
- Why is the beneficiary name not the exact official name? Because the official registered company is only the one in Chinese characters (for Chinese companies, for example), while the bank needs to use a company name in English for international transactions on the SWIFT network (and it can be quite a different name, not necessarily a direct translation).
- Why can’t the business official number be matched? Because it is not one of the fields of the bank account information.
That’s why making a test payment (sending about 1 USD to them — for example 0.87 USD — and asking them to confirm the exact amount received outside of their email system) is an essential step in establishing if it really is their bank account.
How much does a supplier bank account verification cost?
If ordered as a standalone service this verification costs 99 USD*.
*There will be approximately an additional US$50 to pay if you have to send a test payment in USD to your supplier’s USD bank account in China.
Aside from this bank account verification. What else can I do to assure safe purchasing?
This bank account verification solution is usually combined with the following:
A Supplier Legal Records Check where we provide you with peace of mind that the company you wish to deal with is who they say they are.
An Initial Factory Evaluation which acts as your on-site due diligence where our auditor evaluates a potential supplier based on their manufacturing capabilities before you start working with them. We also evaluate risks associated with potential suppliers, such as: non-existent quality system, no preventive maintenance, incorrect or false information given, etc.