December 23, 2011 Updated May 8, 2014
This article is designed to be a starting point for international buyers in the long quest to find out if a company they are dealing with over the internet is genuine. Whilst the process may appear to be a simple one, sometimes it can be a very frustrating and time-consuming process. What follows is the very basics of 'DYODD' (Do Your Own Due Diligence) which can be applied to many different types of business contacts you are likely to deal with, and without spending any of your cash.
What follows is a long and sometimes technical read, and we make no apologies for it. We are in fact only scratching the surface of running due diligence, so be thankful we don't know everything, otherwise this page would be a book! This website (ScamSurvivors.com) is not a professional due-diligence company, we do not hold any qualifications in this regard. Information given here is based on our collective experience of internet research on scammers and the various companies they purport to represent. You the trader must not in any way consider this article as any form of defacto standard, nor consider that the information here is complete.
What Information Do I Need...?
First and foremost, you must have some very basic information about the company you are dealing with, as follows:-
- Full Company Name
- Company Incorporation Details (if applicable)
- Company Postal Address / Factory Address
- Company Telephone Number
- Company Fax Number
- Company Email Address
- Company Website URL
- Company B2B Website URL
- Contact Person Name
- Contact Person Telephone Number
- Contact Person Email Address
- List of Goods Being Purchased By You
What Tools Do I Need...?
You do not need many tools to run basic due diligence, but you do need to know how to use them. Some are simple, others need a little more work. Let's get started.
- Google Internet Search Engine [link]
For those that have possibly been on another planet for a while, Google has an internet search engine accessible through google.com or one of the many language specific domains that they own. We recommend Google as the key tool for your research because it is #1 in the world and more likely to yield results than any other internet search engine in existence today. In fact, I do not even recommend using the search feature on our own Forum software, I use Google instead. So, remember... Google is your friend.
- Company Incorporation/Tax Lookup [link]
This can be anywhere from very simple to near impossible, but you really must try to do this. Many supposed traders online will use the details of a company that they have either completely made up, or have stolen. Having the ability to look up the Company Incorporation (or Taxable Entity) record is certainly not the end of the story if it comes back with a positive result. The person you are dealing with could still be a scammer with stolen details. It is simply a way of weeding out the very obvious bad guys. We will discuss this aspect in a little more details further down this page.
- International Numbering Plans [link]
INP contains tools for looking up information about telephone numbers. By entering the telephone number you can find out what country the number is in (if you didn't already know), and whether the number is a mobile or geographic (meaning landlines). You also get to know the name of the network operator, which can be very useful for further checking on geographic numbers. One of the issues with a geographic number is that you have to take number portability into consideration. Many operators offer VoIP (Voice over Internet Protocol) services giving a user in one country access to a number in a totally different country. Being able to look up information about the network operator could indicate a VoIP service.
- DomainTools Registration Lookup [link]
If the company you are dealing with has their own website, then feeding in the domain name to the link above may give you some additional information about the registration of the domain itself. You do need to be careful with the results, and read what it says. The key pieces of information you look for are the Registrant details, the Created Date and Expiry Date. We will talk about this data a little further down in this article.
- Chambers of Commerce
Additional information about a company may also be sourced via the Chamber of Commerce within the borders of the country you wish to deal with. You should be able to locate these via a search on Google. If the CoC have a good enough website, you may be able to perform a search for a company name or other registration information, otherwise you will have to make contact with them via telephone, fax or email. Do not forget to give the CoC the street address of the company you are attempting to deal with. Their local knowledge may quickly tell you that a quoted address simply does not exist, or that it actually belongs to someone completely different. You may find language being a barrier via this route, and as such you may require some help from someone that knows their language.
Effective Google Searching
Using Google search engine can be quite daunting for people not used to doing research, as the sheer volume of results could be huge. Your aim is to provide Google with enough information to allow it to bring back the most relevant results on page one, and for those to be exactly what you need to read. It is suggested that you read the help page about Google Search [link] to help you understand the basics of how to search.
Remember that any piece of information you have about a company can be searched for, and the list from the earlier section "What Information Do I Need..." gives you the basis of your search queries.
Try to include additional keywords into the search that could alert you to a previously reported scam or fraud. For example, if you enter Charles Soludo into a search, you will get in the region of 146,000 results, which isn't that much helpful as it is a very popular name. Now try Charles Soludo "scam" to only include results that have the word scam in the index too. That one then comes down to 80,000 records. Do not forget the word fraud either, so a search for Charles Soludo "fraud" gets you 73,000 results. You will also note that results are sorted differently, so using both words in two searches can be helpful to narrow things down. Use this technique on any piece of information, like company names, postal addresses, people names etc.
Telephone numbers are a little more difficult to search for as they can be written in different ways. However, let me show you how to alter the formatting in different searches to help you get the maximum out of it. We will use a sample number taken from a randomly selected Profile:- 0023733117099 - Ok so how would you change the formatting to get different results?
- 0023733117099 - Gives 4 results.
- 23733117099 - 2 results here.
- "237 33117099" - 684 results. Remember that here the quotes force the search to include 234 AND 33117099
By far the biggest indicator of a scam attempt, is a communication from someone saying they are from a registered company that does not actually exist, but how would you know this?
Registered Companies come in various flavours, so you should first make yourself familiar with the different types within your target country. Some additional reading links follow for your perusal about this subject:-
- Wikipedia - Limited Company [link]
- Wikipedia - Limited Liability Company [link]
- Wikipedia - Proprietary Company [link]
- Wikipedia - Public Limited Company [link]
As with many scammers, they tend to forget, mix up or simply do not know what the correct company suffix should be. So, it would be quite common for a scammer to use both Ltd and Plc in descriptions of a company in the UK. This would be quite incorrect, as it could never be both.
Likewise an American company being touted as a Ltd is also incorrect as the suffix would be Ltd. Co. *
(rare - see: wiki [link]) or more traditionally Llc.
Looking up company details in certain countries is relatively simple, and the most obvious ones we can locate are detailed in an additional article, as below:-
[*]How Do I... Lookup Company Details Online...? [link]
As mentioned above in the "What Tools Do I Need" section, the Chamber of Commerce (if you can locate one) is also a route to finding company information. If you do have the opportunity to lookup Company Incorporation details and then talk to a Chamber of Commerce, it will be a big bonus to them as they should be able to cross-check their records using the Incorporation details. At the time of writing this article, we do not have a list of such entities worldwide, but may incorporate this information at a later date.
Prices and Quantities
Two things that seem to blind potential buyers are the prices and quantities of goods on offer. The keys are: If the prices are far below market value, it is likely to be a scam; If the quantity on offer is too high, it is also likely to be a scam.
So, how can you tell? Actually, I have asked this question quite deliberately.
If you do not know the market value range of the goods you are buying, why are you attempting to do any trade? You are liable to get ripped off right from the start. Likewise, if you do not know the production capability from an entire country for your target goods, how could you know if you are really being offered quantities in excess of that capability.
Take Cameroon Export of Edible Oil as an example. Export capability is ZERO Metric Tonnes Per Annum... why? Simple, the international market value is less than the value inside Cameroon itself, thus there is no incentive to export. Would you sell something for $10 to a local, or sell it for $5 to a foreigner... simple math, no brainer.
To gain knowledge of price and quantities, you will need to seek professional help. This should be done through your Embassy (commercial section), Chamber of Commerce, or a Trade Association if you are lucky enough to have one for your target goods. Yes it does mean you have to write letters and emails, maybe even take a trip to visit official bodies in your country.
A final note about prices and quantity. Do not kid yourself that there is any 'deal of a lifetime' on the international market. If you get offered a deal that sounds too good to be true, then it is. You must use the exit door and run away fast.
Does The Trader Own The Website...?
Always request to see a link to the traders' website. Do not confuse this with a profile on a B2B website, or a free trade advertisement website. Here we are talking about a dedicated company website with their own domain name. If they have one, you can check further into the credentials of the company. If they do not have a website, ask them why not, but it is common for internet traders not to have their own website.
The first thing that you must do is ascertain whether your trader really does belong to company whose website you have been directed to. If you are communicating with the trader via email, and his email address ends with the same domain name (eg: http://www.mywebsite.tld => TraderName@mywebsite.tld) then it is easy to say yes to that question.
However, it is very common for international traders to own a domain name and website, but use email addresses from their own Internet Service Provider, or even use free webmail like GMail, Hotmail, Yahoo etc. This is where you need to be very cautious.
Commonly, a bogus trader will use free webmail, and say they represent/belong to a certain website. You only have their word for that, so you must go and check it out.
Look at the website and locate a 'Contact Us' page, where it will detail ways of making contact with the company. If you find the traders email address on the page, then you have answered the question with a yes. If you can not see the traders email address, then write to the email address shown on that page and ask for verification that the person you have been talking to represents the company. This step is absolutely vital, and you must not bypass this check.
If you do not get a reply in 48 hours, tell the trader that unless they respond you will not deal with him. This would normally provoke the website to reply to you very quickly.
A bogus trader that does not belong to the given website will very likely be upset that you are checking up on him.
- If he complains to you about it, walk away.
- If he makes excuses for the lack of reply, walk away until they fix it.
Finally, if you do get a reply from the website it will confirm whether the trader is genuinely from that website or not. If he is not, then walk away.
Understanding Domain Name Registration Look Up
To start this section, it must be understood that the term "Domain Name" has absolutely nothing to do with a "Website". A domain name can be registered without having any website to go with it. Likewise, you can have a website even when you do not own a registered domain name.
This section deals with the name, and the reading of registration details only. We will use the lookup for Google.COM [here] as the example for this section.
The domain name lookup, known as a WHOIS, will contain a great deal of information. However, you need only concentrate on a small portion to begin with, as shown below:-
- Registrant Details
The registrant details should be the person/entity that registers the domain name and is the recorded legal owner of the domain. In many cases of fraudulent activity, the details of the registrant are completely different from that of the company you are supposedly dealing with. If you were dealing with a company in say South Africa, and the registrant details are in China, then you need to get suspicious. Typically the registrant details are either bogus, or are details belonging to someone else. Registrant details can also be hidden by services known as 'WHOIS Protection' or 'Spam Guard'. This is used quite legitimately, but would be unusual to see for large international businesses.
- Date Created
The date that a domain name is registered gives a hint as to the authenticity of the operators of the domain. It is very typical that a domain used to perpetrate internet fraud would be closed down within one or two years of its creation, though it is not always the case. You must add the longevity of a domain name registration into your bag of 'red flags' or 'warning signs'. The longer the domain has been registered the better.
- Date of Expiry
The expiration date of a domain name is directly related to the amount of money spent at registration time. If a domain has been registered within only the last 2 years, and a renewal date is a minimum length (usually no more than 2 years), then be extra cautious. Once a domain name is registered for more than a two year period, the renewal date is usually not significant. Many domain registrars have automated billing for their clients, and registration will occur automatically usually per annum. It should be noted that if a domain name has a expiry in excess of two years time, it indicates a more reliable registration because of the extra investment of money.
It is hoped that despite the length of this article, and the inherited complexity, that you the questioner is able to use the information to better understand how to perform basic due diligence on your own. Equally, it is also hoped that those people who constantly ask us "is this company legitimate" begin to understand how much of our volunteer time is actually taken up trying to answer that question.
Article originally posted by Eatyo Urgreens @ 419ScammersExposed.com