Safe Trade Tips 3

3 - Protect Yourself Against Payment Risk
Using a Letter of Credit (LC or L/C) or escrow are the recommended payment methods. If the seller seems more focused on payment than any other issue, or indicates that cash payment must be made urgently, more caution should be given to the transaction. Be extra cautious when the seller asks you to send money to an account whose real owner cannot be traced.

Letter of Credit (L/C)
A Letter of Credit is the most preferred payment method in international trade. However, there is some possibility of fraud due to incorrect or forged shipping documents. Minimize the potential for fraud by contacting the L/C issuing bank. Be sure to check the L/C number, opening date, opening place, name and address of the issuing bank, shipping date, valid date, loading and unloading port, applicant, period of presentation, amount, as well as details of trans-shipment, partial shipment, etc.

Escrow
Escrow.com is a transaction settlement service used by many of the leading eCommerce websites, including eBay and others. Escrow.com acts as a secure third party to protect Buyers and Sellers.

Avoid Telegraphic Transfer (T/T) payments
Importers: It is NOT wise to accept an overseas supplier's request for pre-payment. In most cases, a request for T/T payment involves attempted fraud.
Exporters: It is NOT wise to agree to accept payment from an overseas buyer after they have received products. Once a buyer has received samples or products without payment, it is very difficult to get them back.

Avoid Payment by Western Union
Many of the online fraudulent cases reported involve payment via Western Union. After a buyer sends funds, the receiver breaks contact and the party disappears. You cannot trace the real name of an account holder with a wiring service such as Western Union.