by Marcello Mantelli, Avvocato in Milan – Turin (Italy)

Learn about common international scams in B2B sales. Discover how to identify and safeguard your business from fraud in global trade.

International trade offers immense growth opportunities for businesses but also exposes them to a greater number of risks, including frauds. International frauds in business-to-business sales can cause serious financial, reputational, and legal damage, hindering business and undermining trust in global trade.

Fraud is a crime regulated by art. 640 of the Italian penal code, which was specifically designed to protect free consent and assets.

Some of the most common international scams we have identified in our work as lawyers in the field of international contracts are:

1.Advance Payment Scam: In this scheme, the scammer requests an upfront payment for goods or services that they will never deliver. They often offer lower-than-average market prices to persuade the buyer that they are getting a great deal. Once the money is received, the scammer disappears without providing the promised goods or services.

2.Unusable Goods Scam: The scammer contacts the buyer, offering products at very advantageous prices. The buyer places the order and pays in advance or with a sight letter of credit, but receives completely unusable, non-marketable, or even counterfeit goods.

3.Phishing Scam: The scammer sends emails or text messages that imitate the brands and trademarks of real companies, inducing the buyer to click on malicious links or provide bank details or passwords. Once this information is obtained, the scammer uses it to steal money or commit other crimes, such as extortion by encrypting the victim’s files.

4.Man-in-the-Middle Scam: In this scheme, the scammer intercepts communications between the buyer and seller and modifies payment information or shipping instructions. The buyer makes the payment to the scammer’s account instead of the legitimate seller’s account and never receives the goods. A variation is the use of an email that appears externally as that of a customer or known contact, the opening of regular negotiations until the shipment of the goods, which then disappears without any payment being made.

5.Fake Invoice Scam: The scammer sends the buyer a fake invoice for goods or services never supplied. The buyer, unaware of the fraud, makes the payment to the scammer’s account without first performing the necessary checks.

How to Recognize (Some) International Scams

First of all, always verify the identity of the supplier/customer and their representatives: before signing any contract, making any delivery, order, or payment, it is essential to verify the identity of the business partner and their authority to sign contracts. It is perfectly legitimate to ask for this information!

Also, it is better to be wary of offers that are too advantageous: if an offer seems too good to be true, it probably needs further investigation.

In any case, exclude: i) sending personal information via email or messages: companies, for example banks, never ask for passwords or bank information via email or text messages; ii) clicking on unknown links without adequate preliminary checks.

Then check the payment process and verify the people authorized to receive it for the buyer, avoiding paying by bank transfer directly to unknown accounts or through unreliable intermediaries. Sometimes, a direct phone call or an email to the customer or supplier (at the correct phone number or address) can be a traditional but effective method of control.

How to Protect Yourself from International Scams

Here are some suggestions:

1.Implement an Internal Control System: Establish internal procedures for verifying suppliers and customers, managing payments, and protecting sensitive information.

2.Train Staff: Provide staff with the necessary training to recognize scams.

3.Use Computer Security Software: Implement antivirus software, firewalls, and other computer security measures to protect company systems from cyber attacks and phishing.

4.Use International Contracts as Work Tools: Using best business practices to finalize international sales contracts can greatly reduce risks.

5.Report scams to the authorities: In case of a scam, immediately report the incident to the competent authorities and cooperate with them in their investigation activities.

Preventing scams is crucial. Businesses can lower the chances of becoming targets by being cautious safeguarding their transactions and international sales.