Avoid the "Contract Trap" Scam on Alibaba.com

As I have stated in the past, much of the best information about how to avoid fraud and NOT have to use the Alibaba Fair Play Fund is to do your homework.  Prepare yourself in advance.

While it's a big Web site and info is hard to find, I have pulled out another case study from Alibaba.com that describes ways to avoid scams and fraud.  This one is called the "Contract Trap."

Have a read:

The Contract trap

Case description:

This company offered us a government project for the supply of wooden furniture to a Togo government agency. I even went to Togo to meet the principal and the people from this government department.

We had been tricked into paying the sum of USD 30.000 plus other expenses to the value of almost USD 40,000. The money our company paid was supposed to pay for the bidding/lawyer fee and legal fee for the contract.

They said they would pay us the money for the furniture immediately after the legal process, but to date, they have not dispatched the money for the said contract.

Analysis of this case:

1. Any unsolicited business proposal, especially large high-profit government projects from African countries should be carefully scrutinized. Most of them are too good to be true. Check with your embassy in that country if there is really such a government agency. Or consult with your bank, an attorney, or the police about the contract.

2. The con artists will always tell some stories to you, such as you need to register in some business agency to export your products to their country or something else. In this case, they asked for a bidding fee, a lawyer fee and legal fee for this contract. It is necessary to understand whether or not this is a normal process for a business contract in that country.  

3. In such a fraud case, you are not dealing with one scammer; you are fighting with a group of scammers. Someone will pretend to be an attorney and guide you to their trap step by step. Someone will pretend to be a government official and give you confidence in this contract. They are a professional scammer group instead of an individual scammer.

4. Search the company name or government agency via a search engine to find some useful information for your business