QUICK ANSWER The main fake supplier red flags on a China order are a business license that does not match the national registry and a trader posing as the factory. Next come a supplier that will not show you the production floor, a price far below every other quote, a refusal to send a paid sample and certificates the issuer cannot confirm. On the payment side, watch for a payee other than the company on the contract, new bank details sent by email and a demand for 100% up front. Before any deposit, look the company up on China's National Enterprise Credit Information Publicity System (www.gsxt.gov.cn) with the 18-character Unified Social Credit Code from its license. Confirm any change in bank details by phone, and tie the balance to an inspection or to shipping documents you can verify with the carrier.
Most fake supplier red flags show up before the deposit, and the last checks come at shipment. Platton, a US forwarder specialized in imports, works on your side at that stage. We book your freight with the carrier, and our platform shows your container in real time from booking to delivery, so you can see your goods move before the balance goes out. Check the eight signs below before any money leaves your account, then get a quote for the freight once your supplier passes them.
1. The business license does not match China's national registry
When you are importing from China, the supplier's business license (营业执照) is the first document to ask for and the easiest one to check. Every license carries an 18-character Unified Social Credit Code. Under the State Council plan that introduced the code, each company holds one code and each code belongs to one company. Look the company up by that code or its registered Chinese name on the National Enterprise Credit Information Publicity System (www.gsxt.gov.cn), the official registry linked from the website of the State Administration for Market Regulation. A real supplier sends a clear copy when you ask for one. Stalling, or a blurred scan, is the first red flag on this list.
China's market entity registration rules list the entity type, business scope, registered address, registered capital and legal representative among the items every company registers, and they forbid forging, altering, renting out, lending or transferring a business license. A license that belongs to another company is a red flag in itself, even when that company is real.
What to compare on a Chinese business license
| What to check | Compare it with | Red flag |
|---|---|---|
| Company name | The registry record, your contract, the proforma invoice and the bank account | A different name anywhere in that chain |
| Unified Social Credit Code | The registry record found by that code | Not 18 characters, no record, or a record for another company |
| Registered address | The address on the supplier's website and emails, and the site you see on video | Another city, or a facility that does not match the video call |
| Business scope | The product you are buying and the claim to be a manufacturer | Trading or sales only, from a supplier calling itself a factory |
| Date of establishment (成立日期), on the license and in the registry record | The years in business the supplier claims | A company founded months ago selling itself as a long-time exporter |
| Registry history | Annual reports, administrative penalties and the abnormal operations list | Missing reports, penalties, or a current abnormal operations listing |
An abnormal-operations listing or a company registered last month
Chinese companies file an annual report through the registry between January 1 and June 30 each year, and the report is public. Under the enterprise information disclosure regulation, as amended by State Council Order 777 in 2024, a company that misses the deadline goes on the abnormal operations list (经营异常名录) and is given an administrative penalty. A company listed for missing two annual reports in a row loses its business license if it has not corrected the problem and cannot be reached at its registered address or place of business. A listing does not prove fraud by itself, but it shows the company has missed a basic legal duty. Ask for the reason in writing, and hold the deposit until the listing is cleared.
If the date of establishment (成立日期) on the license and in the registry record was last month, the company cannot have the decade of export experience its profile claims. A young company can still be genuine, but its claims about history and past customers need more proof.
2. The license says trading company, the sales pitch says factory
The business scope (经营范围) on the license lists what the company is registered to do. A manufacturer's scope covers producing goods like yours. If the scope covers only trading or sales while the salesperson talks about "our factory", you are probably dealing with a middleman presenting itself as the maker.
A trading company is a legitimate business, and for small orders across many product types it can be the practical choice. The trouble starts when it claims to be the factory. You pay what you believe is a factory price with no direct line to the people making your goods. A seller willing to hide what it is also gives you reason to doubt its other claims. Ask questions a factory answers on the spot, such as monthly capacity, the number of production lines, the machine that makes your part and the lead time for your quantity. A very wide catalog of unrelated products points to a trader as well.
3. No live look at the production floor
A live video walk-through of the production line is the quickest way to see whether the factory exists and makes your product. Production photos copied from another factory's website are a known trick. A showroom can belong to anyone. Set the time of the call yourself. Ask the person holding the camera to show the machines making your product and to hold up a sheet of paper with your company name and today's date. Then compare what you saw with the registered address and a map search of that address.
A supplier with a real factory can usually arrange this at short notice. Repeated delays, or a call that never leaves the office, should stop the deposit until you get a proper look. On larger orders, a third-party factory audit goes further. An inspector visits the site, checks the machinery and the quality systems, and confirms that the address is a working plant, not an empty office or an apartment.
TAKEAWAY One red flag is a reason to pause and verify, since it sometimes has an innocent explanation. A license that does not match the registry, or a refusal to show the production floor, should stop the deposit until the supplier puts it right. When several signs appear together, walk away and find another supplier.
4. A price far below every other quote, or brand-name goods at a fraction of retail
Get quotes from several suppliers for the same written specification, and look hard at any price far below all of them. It usually means cheaper materials than you asked for, or a quote built to win the deposit. A common version is bait-and-switch pricing. Once the deposit is paid, the price goes up, and the supplier blames raw materials or a changed specification. Lock the price and the specification in writing before any money moves.
Brand-name goods at a fraction of retail are a different problem, because the loss lands at the US border. When CBP suspects that goods carry a counterfeit of a trademark registered with the USPTO and recorded with CBP, it can detain them for up to 30 days from the date they are presented for examination. Once it determines the mark is counterfeit, CBP seizes the goods and, without the trademark owner's written consent, forfeits them (19 CFR 133.21). By then the supplier has been paid and the freight is spent. While the goods are detained, the container sits in a customs hold with port charges adding up.
5. No paid sample, or certificates the issuing lab cannot confirm
A supplier that makes your product can send you a sample of it, and paying for that sample is normal. Refusing to send one, or insisting on a full order first, suggests the supplier does not have the product or cannot make it to the standard it claims. Order a paid sample and test it against your written specification. Keep the approved piece as the reference production is judged against. Ordering more than one sample and comparing them helps catch the "golden sample", a piece finished by hand to win the order, which mass production never matches.
Certificates need the same care. For goods that fall under a US agency's rules, such as CPSC rules for children's products or FDA rules for food, have the sample tested against the requirement that applies. For any certificate the supplier sends, ask for the certificate number and the name of the issuing body. Then contact the issuer directly and confirm the certificate is genuine and was issued to this company for this product. A certificate the supplier promises to send only after you order is a red flag.
6. The payee on the invoice is not the company on the contract
The legal name on the business license, the sales contract, the proforma invoice and the bank account should all belong to one company. A personal account, or an account in another company's name, breaks that chain, and money that lands there is hard to follow. The US Treasury's Financial Crimes Enforcement Network (FinCEN) warns that supplier impersonation scams often send the money first to foreign intermediary accounts, and that such payments are often irrevocable (FinCEN advisory).
A mainland factory sometimes asks for payment to a related Hong Kong company. That can be legitimate, but treat the Hong Kong company as a second supplier to check. Get its full name in writing and search it in the Hong Kong Companies Registry. A company name search there is free through the e-Search Services on the e-Services Portal. Take extra care with a Hong Kong payee that appears late in the deal.
7. New bank details arrive by email, with pressure to pay today
A request to pay a new account is the core of the bank account switch scam, a form of business email compromise (BEC), which the FBI describes as a scam aimed at businesses that work with suppliers and pay by wire. In 2025 the FBI's Internet Crime Complaint Center (IC3) received 24,768 BEC complaints, with $3.05 billion in reported losses (2025 IC3 Annual Report).
On a China order the message usually looks routine. It may come from the supplier's real mailbox after a break-in, or from a lookalike domain one character off. It refers to your real order and says the usual account is frozen or under audit, so please pay a new one today. Treat any change in payment details as unconfirmed until you verify it through a second channel, as the FBI recommends. Call the supplier on a number you had before the request arrived, never one from the message. Check the sender's address letter by letter. Agree the bank details in writing early in the deal, so a later change stands out.
TAKEAWAY If money has already gone to the wrong account, call your bank immediately and ask it to recall the funds, then file a complaint at ic3.gov with the full transaction details, whatever the amount. Speed matters. In 2025 the IC3 Recovery Asset Team handled 3,900 incidents through the Financial Fraud Kill Chain and froze $679 million, a 58% success rate.
8. Full payment up front, and a no to escrow, a letter of credit or an inspection
A healthy supplier that wants repeat business will normally accept a deposit, with the balance due after an inspection or against shipping documents. A demand for the full order value before production puts all the risk on you. The US International Trade Administration calls payment in advance the least attractive option for the buyer, and notes that buyers worry the goods may never be sent (trade.gov).
Pressure can also come as a request for a larger deposit or an earlier payment, often with a discount for paying fast. The clearest form of this red flag is a supplier that refuses every protected option, whether escrow, a letter of credit or a third-party inspection before the balance. A request to pay by Western Union or cryptocurrency is a hard stop.
How to check a China supplier before the deposit
Each of the eight fake supplier red flags has a check that settles it, listed here in the order you would usually run them. Most belong before the deposit, and the last row protects the balance.
Supplier checks before you pay
| Check | Where | It passes when | Stop when | Red flag |
|---|---|---|---|---|
| The company exists | www.gsxt.gov.cn, searched by the company's code or Chinese name | The record matches the license | No record, another company, or an abnormal operations listing | 1 |
| Factory or trader | Business scope on the license, and capacity questions | The scope and the answers fit the claim to make your product | A trading-only scope behind a "factory" pitch | 2 |
| The production floor | Live video call, or a third-party audit on larger orders | You see your product being made at the registered address | Only pre-recorded clips, or repeated delays | 3 |
| The price | Quotes from other suppliers for the same specification | The price sits within the range of the other quotes | Far below every quote, or rising after the deposit | 4 |
| The product | Paid sample tested to your specification, certificates confirmed with the issuer | The sample passes and the issuer confirms the certificate | No sample, or a certificate nobody can confirm | 5 |
| One company on every document | License, contract, proforma invoice and bank account | The same legal name on all four | A personal account or another company's name | 6 |
| The bank details | A call to a phone number you already had | The supplier confirms the details by voice | New details by email, with pressure to pay today | 7 |
| The payment terms | The purchase order | A deposit, with the balance after inspection or against shipping documents | 100% up front, or a refusal of every protected option | 8 |
| The shipment | Bill of lading copy, with the container number run through BIC's check-digit calculator and tracked with the carrier | A valid check digit, and the container moving with the carrier named on the bill | The number fails the check, or the carrier has no record of it | 8 |
The shipment documents themselves, such as the commercial invoice and the product certificates, are a separate check made before the cargo moves, covered in our guide to supplier document validation.
The same checks apply outside China, against the local registry. Vietnam runs company registration through its National Business Registration Portal (dangkykinhdoanh.gov.vn). In India, an exporter needs an Importer Exporter Code (IEC), apart from a few narrow exemptions, and anyone can verify an IEC on the DGFT website. Our pages on shipping from Vietnam to the USA and shipping from India to the USA cover each lane.
Payment terms that protect your deposit
How you pay decides how much money is exposed if the supplier turns out to be fake. The table draws on the US International Trade Administration's guidance on methods of payment.
Ways to pay a China supplier, and where each one stops
| Method | When the money goes | What protects you | What it does not do |
|---|---|---|---|
| Wire transfer in advance | Before production or before shipment | Only the supplier's good faith | Bring the money back if the goods are never sent |
| Escrow | To a third party at order, released to the supplier after you accept the goods | The funds sit with the escrow holder until the agreed conditions are met, including a set period to inspect the goods on delivery, such as five days | Protect you if the escrow firm is not licensed or accredited, so check that first |
| Letter of credit | Your bank pays once the supplier ships and presents the documents the credit requires | No payment obligation until the goods have shipped as promised, on the evidence of the documents | Check the goods, because banks examine documents only. The fees also make it relatively expensive |
| Documentary collection | Through the banks, in exchange for the shipping documents | You receive the documents of title only when you pay or accept the draft | Check the documents, because the banks do not verify that they are accurate |
| Open account | 30, 60 or 90 days after the goods are shipped and delivered | The goods reach you before you pay | Expose you, because the risk sits with the supplier |
Payment protection on a sourcing platform, such as Alibaba's Trade Assurance, applies on that platform's own terms, so read them before you pay through it. Whichever method you use, put the payment terms in the purchase order. Spell out the deposit, what triggers the balance, the inspection and the documents the supplier must hand over. On a custom product, add who owns the molds. A small first order also limits what a bad supplier can cost you. The first-time importer guide covers what that first purchase order should contain.
A supplier that insists on DDP terms, arranging the freight and the US customs entry itself, also controls the shipping documents you would pay the balance against. Read how DDP shipping works before you agree to it.
A letter of credit checks documents, not goods
Under UCP 600, the ICC rules for documentary credits, banks deal with documents and not with the goods those documents relate to. So a letter of credit protects you against a fake supplier only when it requires a document the supplier cannot produce alone. An inspection certificate does that, if it comes from a third-party inspection company you appoint and is issued after the goods are checked. Credits make the most sense on larger orders and with new suppliers.
Releasing the balance against shipping documents
When the balance goes out against a copy of the bill of lading showing the cargo is on board, check the copy before you pay, because a copy is easy to fake.
Every container number starts with a three-letter owner code registered with the Bureau International des Containers (BIC) and ends with a check digit. Run the number through BIC's public check-digit calculator. Then track it on the website of the carrier named on the bill, typing the address yourself rather than following a link from the supplier.
When you buy FOB, your own forwarder books the freight. The booking and the container number then reach you from the carrier, not from the supplier. That is how Platton books FOB shipments from China. Once the balance is paid, the supplier either sends you the original bill or surrenders it for a telex release.
TAKEAWAY "For importers, any payment is a donation until the goods are received," as the US International Trade Administration puts it. Keep the deposit to an amount you could afford to lose. Release the balance only against an inspection report or shipping documents you have checked yourself.
How Platton helps with supplier risk on China imports
We work for the importer on every China order. The shipment details you check before paying come from the carrier and from our platform. When something does not add up, real people on our team answer fast. Platton is a member of WCA, JCtrans and NCBFAA, with US offices in Chicago, Portland, Savannah and Seattle.
Supplier documents collected and checked for completeness before the cargo ships
Before the cargo ships, we ask the supplier for the documents your shipment needs and check that the set is complete. A missing certificate or packing list turns up at origin, while the supplier still has time to send it. Automated documentation keeps every file for the shipment in one place, and our supplier document validation service confirms that the documents are there and complete.
Freight booked on your side, with the carrier's booking and container number
On FOB terms the freight is yours to book, and the supplier's job ends once the goods are loaded on the vessel. We book your ocean freight on the China to the USA lane with Maersk, MSC, CMA CGM, Evergreen and Hapag-Lloyd, on weekly sailings from Shanghai, Ningbo, Shenzhen, Qingdao and Xiamen. The booking confirmation and the container number come to you from the carrier, through us.
Container tracking you can check before you release the balance
Our AI-driven platform gives you real-time cargo tracking on the same screen as your booking and documents, with proactive updates as the container moves. When the supplier says the goods have shipped, you can check for yourself that the container is on the vessel before you release the balance.
Frequently asked questions about fake suppliers in China
How can I verify a Chinese company's business license?
Search the National Enterprise Credit Information Publicity System (www.gsxt.gov.cn), China's official registry, by the 18-character Unified Social Credit Code printed on the license or by the company's Chinese name, and check that every field on the license matches the record.
Can I check a Chinese supplier's credit record?
Partly. The official registry publishes each company's registration and filing records, its annual reports and any administrative penalties, which makes it a compliance record more than a credit report.
Can I trust a verified supplier badge on a sourcing platform?
Treat the badge as a starting point. It reflects checks the platform made on its own terms, and it does not replace your own.
How can I tell if a supplier is a factory or a trading company?
Check the business scope on the license, where a manufacturer is registered to produce goods like yours and a trader to buy and sell them, then ask for a live video of the line making your product.
What is the safest way to pay a new supplier in China?
Pay a deposit to the registered company's corporate account by a traceable method, and tie the balance to a third-party pre-shipment inspection or to a bill of lading copy you have checked with the carrier. Never pay a personal account, and treat an account in another company's name as unverified until you have checked that company.
Can I get my money back after paying a fake supplier?
Sometimes, if you move fast. File a complaint with IC3 at ic3.gov; an international case that meets its thresholds then goes to FinCEN's Rapid Response Team through the Financial Fraud Kill Chain, which froze $172 million across 326 international cases in 2025. A freeze holds the money in place but does not return it to you, so treat it as the first step toward recovery.
How do you know if a supplier is experienced?
Beyond the date of establishment on the license, ask the supplier for its export history and for references from buyers you can contact, ideally importers in the US. Searching the company name together with words like "scam" or "fraud" can also turn up other buyers' experiences.
Related guides
- How to import from China to the USA: the steps of a China import, from supplier terms to final delivery.
- Supplier document validation: the shipment documents to have in order before the cargo moves.
- Telex release: how the supplier releases the cargo once the balance is paid.
- First-time importer guide: the decisions to make before a first order, including the purchase order.
