Red flags to look for in a new customer relationship

The export industry is full of incredibly kind, helpful and well-meaning people. Yet, every now and then one dodgy email or phone call might slip through the net and someone’s business takes a hit. As technology pushes forward, con artists and crooks find ever more devious ways to access your wallet.

Luckily, with the right knowledge and correct protocols, we can ensure that our goods travel from A to B without the fear of fraudsters. This article highlights three approaches and looks at the red flags to avoid when forming new partnerships for overseas trade.

Audit new business opportunities

It’s swings and roundabouts when it comes to the digital era. Sure, con artists now have more means than ever to get your attention, but we also have more means to check their legitimacy. A few minutes with your search engine of choice can save you big headaches.

Your first port of call is to look up their company name on Google. This will sift out the lazy trickster, but don’t be fooled just yet if the name appears at the top of the search results. A well-oiled scam machine will know the ins and outs of SEO (search engine optimisation) and could have a convincing website.

Use WHOIS to search the website address (also known as the “domain name”) to see who owns the website and search and call their phone number to check if it rings through to a human on the other end. You can also Google any email addresses — scam artists are often reported online.

Next dive into your contact book, who do you know that might have also done business or been approached by this company? If the approaching customer lists businesses they’ve worked with in the past on a website, you can reach out and check the legitimacy of these claims.

Finally, if it’s practical, go and visit the business. It’s hard to gauge someone’s tone and legitimacy over a phone or email but we’ve found humans can normally rely on their intuition. If it’s too good to be true, it probably is. Your gut has got you this far — trust it.

Check the finances

Once you’ve cross-checked the company’s online presence, it’s time to see if the company documents and financials check out.

Start by verifying the new customer or supplier with their local chamber of commerce. For UK-based exporters, more information can be found here. Next search their name on Dun & Bradstreet, Companies House or a foreign equivalent — it’ll give you the names of those in charge and some basic company account information. If this information isn’t readily available from normal sources it’s a reason for concern.

Unusual payment requests, currencies or strange terms are a big red flag and cash and advanced payments should raise your eyebrows. The export industry has processes in place to prevent financial fraud so keep the guidance in mind and don’t be tempted by opportunities for a quick profit.?

So far so good? Your final step with the finances is to verify their bank details with both banks.

Stick to your processes

No one likes paperwork — we all know that admin is the greatest foe of fun. But protocol has its place, it’s there to ensure your goods get from one side of the pond to the other with no mistakes and no hold-ups. So get creative with your product decisions, not your processes and be aware of new contacts who lack familiarity with export and import regulations.

If you’re sharing information that is not in the public domain, non-disclosure agreements are commonplace – but you should remain cautious of unusual demands for confidentiality. If a new customer requests a change to shipping documents it’s a good sign that something isn’t quite right. Be wary also of packaging inconsistencies or requests to do things in a different way. If it has worked for you previously, stand by it.

If you do find yourself in a position where you’re suspicious of a new customer, it’s best to contact the authorities. Not only might they be able to confirm your suspicions they could play a hand in helping to ensure other businesses don’t fall for a scam.

If this is your first rodeo into export, don’t worry. We’ve written a list of our favourite free export resources to guide you through the process and help you to get a feel for the industry.