Here’s How a Friend Lost $18,000 to a Factory Payment Scam: And How to Avoid This Same Fate

Apr 15, 2024 | 0 comments

A hacker stole $18,000 from a friend through a factory payment.

Here is how you can avoid a similar fate.

Read on for how it played out and steps on protecting yourself.

It was June 2019 when I got the terrible news from my friend.

(Quick side note – this happened before we even kicked off our agency. This friend wasn’t a client, just someone close. It definitely gave us a lot to think about right from the start.)

A wire for the order balance payment had been sent to the factory’s “new bank account,” but his factory said they hadn’t received the payment.

After a few checks, it was revealed that a hacker had somehow accessed the ongoing factory conversation thread

Cue panic and that feeling of your stomach dropping.

The scam was sophisticated. Here’s how they did it:

From an almost identical email address (only difference was the domain ending) they included the ongoing conversation thread and mimicked the writing style of the factory rep, using the rep’s name. The final step was the scammer requesting the balance payment to be sent to an updated bank account.

Now here’s the kicker—the scammers went as far as registering a lookalike business name to accompany the banking info so as not to raise red flags.

It all looked legit. And in the moment, I think most people would have fallen for this elaborate scam.

Very unfortunately, he never was able to recover that $18,000.

This incident led us to completely revisit our process for sending supplier payments. 

Here’s what we currently do before making payments:

Education. Everyone on the team is trained to spot scams.

➤ A minimum of three team members review and cross reference bank account information to ensure there are no changes or differences on invoices.

➤ If a bank change is made by the supplier we check the email address and call our rep on WeChat to confirm.

We also normally call the factory owner to make an additional check.

This issue isn’t unique to China—scammers are everywhere. I felt awful for my friend. I still do. But hopefully we can all learn from this experience to protect ourselves.

Do you know anyone who was scammed in business? What happened?

Stay Ahead of the Sourcing Curve

Become a sourcing super hero! Get the latest China sourcing news and tips—handcrafted and delivered to you by our team.

No spam, ever. Our monthly newsletter will share tips on negotiating, increasing quality, best ways to communicate with your suppliers, and many more insights and stories.

Subscribe Now to get “in the know” about what’s happening on the ground in China.


Submit a Comment

Your email address will not be published. Required fields are marked *

Our Newsletter

Join a community of forward-thinkers. Receive curated insights, expert analyses, and the latest trends directly to your inbox. Don’t miss out on exclusive offers, event invitations, and valuable resources. Stay informed, stay inspired — sign up now for a future of informed decisions and endless possibilities.

You’ll Love Our Newsletter

Become a product sourcing superhero! Get our best tips and insights to your inbox once a month. No spam, ever.

You have Successfully Subscribed!