Warning information about scams and commercial fraud in the UAE
The UAE is a major global hub for trade and business, making it a target for many forms of commercial fraud and scams. Fraudsters are constantly changing their tactics, forms and methods of fraud, but some of the common types of commercial fraud and scams observed in the UAE include:
I. Forms of fraud and commercial fraud
1. Receive goods without paying and then run away
Nowadays, it is very common in the Middle East for importers to flee to their home country or close their offices after receiving the goods. This makes it difficult to find and recover assets. Fraudsters impersonate buyers in their scams, and they often request payment by T/T upon receipt of goods or bank transfer or Western Union. When working with new buyers, never pay via T/T on delivery and do not use Western Union for business transactions.
Currently, this situation is very common, the purchasing business receives the goods and does not pay or the selling business receives the money but does not deliver the goods. Or the purchasing business does not receive the goods and does not pay (especially for fresh fruit, causing damage to the selling business).
2. Margin Fraud
Escrow is a valid method. It is a third party arrangement that holds the buyer’s funds until the seller delivers the goods. Escrow is a secure way to protect both parties – the seller and the buyer. However, like all international payment methods, scammers have found ways to cheat honest businesses out of their money using escrow.
Escrow fraud occurs when a scammer sets up a new online escrow service with low fees and attractive offers. Buyers and sellers sign up, the buyer sends money to the site, and the escrow site suddenly shuts down and the money disappears. When paying a company through escrow, first make sure the escrow company is legitimate.
3. Forging documents and papers from banks
Businesses need to be extremely careful not to be scammed by scammers who forge bank documents or papers such as money transfer orders, etc., then send them to businesses and deliver the goods. This is a common form of fraud, so businesses must check if the money has reached their account before delivering the goods.
4. Hacking business information during transactions
Many businesses that are victims of computer, email or account hacking have no choice in the matter as computers can be compromised while users are online. However, some of the disadvantages associated with getting the victim to open a file allow the scammer to access sensitive information. This is similar to phishing, in that the scammers “copy” legitimate documents that the victim is used to receiving. In many cases, fraudulent businesses modify LCs, modify bank payment orders, modify emails about payment accounts, payment banks, etc. to deceive partners. This phenomenon is very common today.
5. Fraud is the partner for transaction
Scammers send emails asking for the business’s banking details. These can be very convincing if the scammer is impersonating a company that the business regularly deals with, or a company that regularly pays deposits directly to the business. When asked to provide banking details, even bank account numbers, other payment methods. Therefore, businesses should be proactive and always call the partner company directly and ask directly if the request is valid and correct before transferring money.
6. Bank employees collude with buyers
In some cases, businesses buying and selling goods signed a DP payment contract through the bank. When the original documents were sent to the bank, bank officials colluded with the purchasing business and handed over all original documents to the purchasing business to pick up the goods without payment.
7. Delivering but not receiving the goods or leaving them for a while causing the goods to be damaged
Currently, a common form is that the purchasing enterprise completes the procedures to receive the goods but the payment terms are TT postpaid. When the goods arrive at the port, they do not receive the goods immediately (usually for agricultural products, fresh goods). Leaving them at the port for a while will cause the goods to lose quality, high storage costs, then refuse to receive the goods or force the price down, etc. Many export enterprises that apply TT postpaid payment and do not deposit will suffer great losses if the importing enterprise does not receive the goods. At that time, the exporting enterprise has to bear many costs such as transportation to and from, storage, and other costs.
8. Non-delivery scam
The exporter absconds when he receives the money and does not deliver the goods, the importer receives nothing or an empty container, this triggers an automatic shipping document and “proof” that the seller has completed the transaction, the seller has received the money and the buyer has received nothing. The complication here is that the payment and shipping documents can be very legitimate and international trade depends on them.
9. Issuance of guaranteed checks
Currently, in the Middle East, purchasing enterprises often apply the form of payment by issuing a check with the total contract value and giving it to the seller as a guarantee. That check will be recorded as valid for a certain period of time. After receiving the goods, the purchasing enterprise does not pay the seller. Usually, that guarantee check is a fake check, the purchasing enterprise does not have money in its account. In fact, there is no money in the account of the importing enterprise or if there is money, they will withdraw it immediately after receiving the goods.
II. How to prevent commercial fraud and scams
Here are some ways to ensure international transactions go as smoothly as possible:
1. Check contact information
When signing a transaction contract, the buyer or seller must have a phone number and be willing to agree to make a phone call, check via Skype or video. If the only way to contact is an email address, be careful. It is also helpful to see a physical address (not a PO box), but some companies that provide services rather than products, such as consultants, may work from home and are not willing to provide an address. Also, see how quickly the partner company responds to queries. If it takes several days to receive a response, it is worth noting. In addition, businesses can hire a consulting firm, law firm, etc. to verify the information of the partner company. Furthermore, businesses can also ask the Trade Office or the Vietnamese Embassy in the host country to verify information about the legality of the partner company.
2. Rely on international banks or escrow
Payment methods that bypass banks can be risky. While fees are higher and paperwork is more complicated, relying on an international bank to issue a letter of credit or using a trusted escrow service is a much safer alternative for both buyer and seller.
3. Avoid shipping fraud
No buyer wants to pay for goods that are not delivered, or are not delivered in the correct quantity, or are of poor quality. To avoid shipping fraud, use international payment methods such as documents of acceptance (D/A) or escrow and security services that allow the buyer to inspect the goods before paying. Additionally, buyers can request an independent cargo quality inspection unit to inspect the quality of the goods before loading them into containers.
4. Use free payment methods
The saying is true: “There is no such thing as a free lunch”. Offering huge profits or impressive profit margins for free products or services or “no strings attached” services can be scams. Nowadays, Vietnamese businesses are often asked by their partners to use TT payment method (due to low fees) and are often scammed.
5. Some places where scams often occur
We all wish it didn’t happen, but some regions have high levels of fraudulent activity. Some regions in the Middle East, Europe, Africa, and Central America are notorious for fraudulent transactions. When engaging trading partners from such regions, take extra precautions and safety measures.
6. Maintain evidence, documentation and paper trail
Sellers and buyers should have clear documentation that specifies the product, shipping method, payment method, expected delivery date, and any special terms such as pre-inspection or customs and tariff information. Additionally, retain correspondence such as mail, email, receipts, and third-party interactions (escrow services, etc.) in case of a dispute over non-payment or non-delivery of goods.
III. Measures to ensure safety when trading
1. Business Verification
Always verify the legitimacy of a business, especially a new or unfamiliar one. Check their licenses with the relevant economic departments (e.g. Dubai Economy and Tourism, UAE Ministry of Economy).
2. Be careful when trading online
Use trusted e-commerce platforms, check reviews and verify the authenticity of the seller. Avoid clicking on suspicious links in emails or SMS.
3. Protect personal and financial information
Never share sensitive information such as PINs, OTPs (One Time Passwords) or bank account information over phone, email or unverified websites.
4. Build contracts according to international standards
It is necessary to draw up the terms of the contract according to the international commercial contract standards (Incoterm). Before signing any commercial agreement, carefully read and understand all the terms and conditions. If necessary, seek legal advice.
5. Secure payment methods
Use secure payment methods and methods that provide business protection. Businesses should use banks as intermediaries (bank payments) to ensure safety for both sellers and buyers. Before transferring money, it is necessary to check multiple channels such as email, phone, text messages to ensure the correct account number and bank... to avoid cases where hackers hack emails to change the account number and bank name.
IV. How to deal with fraud and commercial fraud
No matter how careful you are, you can still fall victim to international trade fraud. When you find yourself in this situation, time is of the essence – act immediately.
1. The first step is to contact the buyer or seller. Sometimes the problem is simply a misunderstanding, a wrong order, or something beyond the trading partner’s control. If you are dealing with a reputable seller or buyer, they will be more than happy to talk to you to resolve the situation.
2. Step two is mediation , if the buyer or seller refuses to contact. Some escrow services and international payment sites offer mediation services, you can hire an independent mediator or contact the International Trade Council.
3. Step 3 is to work with your bank, scammed buyers who paid for their goods with a credit card or through their local bank can request a payment hold or chargeback. Again, timing is important here and holds/refunds are at the discretion of the financial institution and their policies.
4. As a final step, if contact, conciliation, credit/cheque retention or claim for reimbursement is unsuccessful, you can file a lawsuit with International Arbitration or Judicial Authority or contact the Vietnamese Embassy in the UAE and the Vietnamese Trade Office in the UAE for assistance.
List of UAE scam businesses
In recent years, fraud and commercial fraud have been very common in the UAE, not only for foreign enterprises, but also for enterprises in the UAE. In response to the above situation, the Vietnam Trade Office in the UAE would like to send a list of companies in the UAE that have committed fraud and commercial fraud against Vietnamese companies and companies in the UAE as follows:
1. Bab Al Rehab Foodstuff Trading LLC
2. Odessa Point Trading LLC
3.Digital Genius Technologies
4. Daemo International
5. Noor Al Sidra Trading
6. Fair Words Goods Trading
7. Wahat Al Rayan Trading
8. Max Clove Technologies
9. Future Star Electromechanical Works
10. Alpha Star Building Contracting
11. Harun Abdul Latif Foodstuff Co LLC
12. Max Clove Technologies LLC
13. Anoh Arya General Trading LLC
14. Green Rock General Trading LLC
15. Rasha Gulf Oil Trading FZC
16. Regal Plus General Trading LLC
17. Vision General Trading LLC
18. Grow Fresh General Trading LLC
19. Fresh Spice Foodstuff Trading LLC
20. Bab Al Rizq Foodstuff Trading LLC
21. Commodity King Trades LLC
22. Sohaz Foodstuff Trading Co LLC
23. Bab Al Rizq Foodstuff Trading LLC
24. White Jewel General Trading LLC LLC
25. Commodity King Traders LLC
26. Sama Al Ahlam Foodstuff Trading LLC
27. Al Jazan Foodstuff Trading LLC
28. Sky Max Star Trading LLC
29. Sana Manufacture of Plastic Bags LLC
30. Grow Fresh General Trading LLC
31. Kapaz General Trading LLC
32. Natal General Trading LLC
33. Reesha General Trading LLC
34. Agro Link Foods FZE
35. Qasr Alkaram Foodstuff Trading LLC
36. Ahmed Taha General Trading LLC
37. Mirzaaz Foodstuff Trading LLC
38. Crezantium International FZ LLC
39. Natal General Trading LLC
40. Max Star
41. Seven Emirates Spices LLC
42. Ultimate General Trading LLC
43. Foot Print General Trading LLC
44. MKN Fruits and Vegetables Trading LLC
Vietnam Trade Office in UAE
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