Payment pressure before any verification
A supplier pushing for a large deposit before you've verified their business licence, factory address, or export history is the single most common warning sign. Legitimate factories are generally comfortable with a buyer taking time to verify them first.
A showroom with no verifiable production behind it
Some operators run a sales showroom without owning or controlling any actual production — effectively acting as an unlicensed trading company while presenting as a factory. Asking to see the production floor directly, not just a showroom, is a reasonable and normal request.
Business licence and bank account mismatches
A payment request to a personal bank account, or to a company name that doesn't match the business licence and contract, is a serious red flag. Payments should go to a business account matching the contracted entity's registered name.
Prices that are meaningfully below every other quote
A quote significantly cheaper than every comparable factory you've spoken to is worth extra scrutiny rather than excitement — it can indicate a lower-quality substitution planned for production, or in rarer cases, an operator with no intention of producing the order at all.
The simplest protection: independent verification
Verifying a factory's business licence, export history and physical production capability in person — or through someone who can do it on your behalf — closes off nearly every version of this problem before a deposit is ever sent.
The pattern underneath all of them
Most sourcing frauds combine the same three ingredients: a payment request that departs from normal practice, an entity you cannot verify, and an unwillingness to be independently inspected. Any one alone can be legitimate — a new supplier may have a new account, a small factory may have no audit history. Together, they describe a transaction in which you would have no leverage if anything went wrong.
The general rule that follows is to concentrate your verification on those three points rather than trying to audit everything. If the entity is verifiable, the payment goes to a matching business account, and an independent inspection is welcome, the remaining risks are ordinary commercial ones.
Due diligence that takes an afternoon
China publishes an official company registry — the National Enterprise Credit Information Publicity System — where a business licence number can be checked against the registered name, address, legal representative and status. A supplier that cannot supply a licence number, or whose number does not match the name on the contract and the bank account, has answered the question.
Beyond the registry, ask for a live video walkthrough rather than photographs, request two references you can contact yourself, and check that the bank account name matches the registered company exactly. None of this requires travel or specialist help, and together it removes the majority of the situations where buyers lose money.
If you have already paid
Act immediately and in parallel. Ask your bank to attempt a recall of the transfer — this works sometimes if the funds have not yet been withdrawn, and almost never afterwards, so speed is everything. Report to your own police, since it establishes a record and may engage international cooperation channels, and report to the platform or marketplace if the introduction came through one.
It is worth being candid about the odds. Recovery of funds voluntarily transferred is rare, and the realistic priority shifts to stopping any further payment, documenting everything for any legal route, and checking whether other buyers have been contacted by the same entity. Knowing this in advance is also the strongest argument for verification before payment rather than after it.