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billbenson
01-30-2009, 07:46 AM
I had a recent order I did with Indonesia for 24K including shipping. Made me nervous, but I got a wire transfer up front for over my cost and they wired me the balance due when they received the goods.

I just got a RFQ for 144K for Malaysia, another fraud center. I sell to the oil industry so it could be legit. So far, everything looks legit and I get a lot of fraud email orders, so I have a good feel for it.

Does anybody know of anyway to scam on wire transfers? My bank manager said on the last order, that once the money is in your account, it's like cash.

CraigFLA
01-30-2009, 08:49 AM
Three questions I would have ...

1. If they know how to put money IN my account, does that mean they know how to take money out too?

2. If the money is dirty, can the US government or the Malaysian/Indonesian government take it back?

3. Might they take the goods and not pay the balance due?

phanio
01-30-2009, 02:16 PM
CraigFLA - Great questions.

BillBenson – Don’t know how they could scam on wire transfers. To transfer funds – you actually have to have the cash to back up the wire. But, they do get your account number. Might want to ask your bank to mask your number – many banks do this – provide a temp one that then redirects to your account once inside your bank.

Once you get the funds – they are cash – just like sending cash through the mail. Having said that, there are some very sharp scammers out there. But, your bank should also approve the transfer – meaning that they ensure funds are available and from a legitimate institution. They have to run the sending bank through a national database (part of the Patriot Act – I think).

Could also look into having your foreign buyer purchase a letter of credit. Thus, the letter of credit and issuing company will ensure that funds are available and sent before releasing your goods – kind of what ebay does to ensure everyone gets what they want or to ensure seller gets paid.

Just some thoughts.

billbenson
01-30-2009, 03:14 PM
I thought about the letter of credit idea. On the last order, I set up a seperate account, so I can move the money out of the account right away. The customer doesn't have the account number where the money is at that point, just the same ABA as it is in the same bank.

It would be a nice order. I'd make about 50K on the deal.

Its still in the quoting stages, so who knows, but it looks promising.

Business Attorney
01-30-2009, 11:58 PM
I have never heard of a scam that can reverse a wire transfer once it is in your account. The whole concept of wire transfers is that it is essentially electronic cash. Once you have the cash, the sender cannot get it back. Too many deals are dependent on the finality of wire transfers for me to believe that you could be scammed out of the money if you actually confirm that it is in your account before you ship (or at least release) the goods.

I can see how someone could scam his own bank into wiring funds that do not exist (for example, his deposit is a forged check), but that would be a problem his bank would have to deal with on its end. They could not say "oops, we made a mistake; please return the funds."

seolman
01-31-2009, 12:12 AM
A transfer is a transfer. However on large amounts sometimes the buyer might balk at the idea of sending such a large amount in advance. In such cases the best way to handle it might be an irrevocable letter of credit confirmed by a US bank of your choosing. If you have a good relationship with a strong US Bank they should pay you against an invoice, proof of insurance and signed BOL (or similar docs indicating the goods were shipped in good order). Confirmed letters of credit have little value when they are confirmed by banks with whom you have no dealings. The whole idea of a bank confirmation fee is the bank is supposed to basically confirm your documents are in order and pay you locally, then request money from the foreign bank.

A bank that does not know you will simply make an excuse that there is a discrepancy in your docs and request approval for the discrepancy from the foreign bank thus making the confirmation pointless because then the foreign bank can refuse to pay due to the discrepancy and your out of luck. Powerful banks almost always pay powerful banks so if your bank is worth anything and pays you then tells the foreign bank "all is in order give us the money" they get their payment usually without much trouble.

billbenson
01-31-2009, 01:14 AM
The interesting thing is that countries like Malaysia are used to paying cash up front. I don't think I'll need a LC. I could break it into two orders as well. Delays delivery, but lowers their risk. 75% on order and the remainder on delivery. That covers my cost anyway. Some nice cash flow as well.

Like I said, its still in the RFQ stage, but it seems real?