The clearest red flags: payment to a personal or third-party account, bank details that change mid-deal, demands for 100% upfront, refusal to do a video call or show the factory, prices far below market, and stalling on documents. A real factory checks out in China's official company registry — verify before you transfer money.
One bank transfer and the money is gone: recovering a deposit from China is almost impossible. The good news is that a scammer almost always leaves traces — in the payment method, in the documents and in the official registries. Below are 9 signs that give away a dishonest supplier before you transfer any money. No single sign is a verdict, but two or three together are a reason to stop and dig deeper. The main rule is simple: verify first, pay second.
1. Payment to a personal or third-party account
The most dangerous signal. A legitimate factory accepts funds into a corporate account whose name matches the legal entity in the contract. A request to transfer to a personal card, the account of an "acquaintance", or a company with a different name is a classic money-siphoning scheme.
What to do: pay only into an account whose name exactly matches the company in the business license and the contract. Any discrepancy in the recipient's name — stop.
2. Sudden change of bank details mid-deal
Mid-deal an email arrives: "the finance department has changed banks, please pay to the new account." Often this is not the factory but an attacker who has intercepted the correspondence (a man-in-the-middle attack). The old details were genuine — the new ones lead to the scammer.
What to do: confirm any change of bank details through a separate channel — a video call or a call to a previously known contact, not by replying to the same email.
3. Demand for 100% upfront payment or opaque payment methods
A serious factory works on terms like 30/70 (deposit/balance). A demand to pay the full 100% in advance or to transfer via Western Union or cryptocurrency is a way to make the payment irreversible and untraceable. A structure with the balance paid after a quality check lowers the risk on its own: we covered how this works in the guide "Factory inspection in China: how it works and why before the balance payment".
What to do: stick to a structure with the balance after inspection and avoid irreversible payment channels.
4. Avoids video calls and won't show the factory
If a supplier refuses a video call or a video tour of the workshop, citing "company policy", there is probably no production at the address. Fake factories exist only online: stock photos of workshops and made-up addresses.
What to do: ask for a live video tour of the production with today's date spoken aloud. A refusal is a red flag. The most reliable option is a physical visit to the factory by a real person.
5. Price significantly below market
If the price is substantially below market with no logical explanation (volume, clearance of leftover stock), it is either a different quality or a trap. Real factories operate on thin margins, not on "miracles". A lowball price is a scammer's favourite bait, because the prospect of a bargain dulls your vigilance.
What to do: compare at least three offers for the same product. An abnormally low price with no reason is grounds for deeper verification, not for celebration.
6. Drags their feet on providing documents
A legitimate supplier provides a business license, certificates and references without any problem. Evasion, excuses or an endless "we'll send it later" on basic documents is a disqualifying signal.
What to do: request the business license (营业执照) and cross-check the name, registration number, registration date and business scope against what they claim.
7. A trader posing as a manufacturer
Many "factories" are actually trading companies. In the business license, the business scope does not include manufacturing of your product category. This is not always fraud, but an intermediary adds a markup and does not control quality on the line. We covered how to spot this in the guide "Factory or intermediary: how to tell a manufacturer from a trader".
What to do: cross-check the business scope in the license against the supplier's claims. If manufacturing of your category is not listed, ask directly whether this is a factory or a trader.
8. Certificates and test reports that can't be confirmed
Scammers send fake CE/ISO certificates or test reports. The forgery usually surfaces at customs or during marketplace verification — after you've already paid. Signs: a mismatch in the product name in the report, dead links, no number to verify against.
What to do: verify the report number and date directly with the laboratory that issued it — SGS, Intertek or TÜV. If a report is "unverifiable", treat it as invalid.
9. A bad track record in official registries
Every scheme leaves traces in official data: court cases from other buyers, the blacklist of dishonest debtors (失信被执行人), missing annual reporting, a low tax rating, declining registered capital. A scammer cannot clean this up.
What to do: check the company in China's National Enterprise Credit Information Publicity System (GSXT): status, registered capital, legal representative, business scope and any court or administrative cases.
Quick checklist: 9 signs and what to do about them
Save this list and run through it before every new deal with a supplier from China.
- Payment to a personal / third-party account — pay only into an account in the name of the legal entity from the license.
- Change of bank details mid-deal — confirm through a separate channel (video call / phone call).
- 100% upfront payment, Western Union, crypto — use a structure with the balance after inspection.
- Avoids video and a factory visit — live video tour + physical visit by a person on site.
- Price significantly below market — compare 3+ offers for the same product.
- Drags their feet on documents — request and cross-check the business license.
- Trader posing as a factory — cross-check the business scope in the license.
- Unverifiable certificates — verify the report with the laboratory (SGS / Intertek / TÜV).
- Bad track record in registries — check GSXT: court cases, 失信, reporting.
The main rule: verify before you pay
Fraud by Chinese suppliers is almost always predictable — it reads from the payment method, the willingness to show the factory and the traces in the registries. Two or three signs together mean: stop and verify before you transfer any money.
At Silk Way Sourcing, supplier verification is part of the full cycle: factory search → supplier verification → production oversight → quality control → logistics. This is what sets us apart from companies that only handle shipping: a carrier does not check the legal entity and does not travel to the factory. We check the company in the official registries and send a real person to the production site before you pay. The founder has over 10 years of work in China, and the on-site verification is carried out by a Beijing team of native Chinese speakers — for a China-based company to which a foreign buyer transfers money, a face and accountability are the main lever of trust.
More on the topic: the guides "Supplier check before the deposit: a Chinese supplier verification checklist" and "How to find and verify a manufacturing factory in China: a guide for wholesale importers".
