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    1. XtendedOwner is offline

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      #1

      A way around scammers with Western Union?

      Hi. I put a lot of thought into this and really, I can't see many fall-outs. Therefore I want to post this idea here so I can get other peoples opinions. Maybe there are other points that I am not considering.

      Ok so say you are buying something from a supplier in China. They insist on payment either by Western Union, Money Gram or Bank Transfer. If you are like me, I am trying to dropship my orders until I can build up enough money to keep my own inventory. Bank transfers take to long to go through so Western Union is the next best choice - provided you don't get burned, right?

      My solution idea for this is a conditional wire transfer. Send the money like normal through Western Union, however use the following details:

      SENDER: Your Name LOCATION: Your Location
      RECEIVER: Your Name LOCATION: Their Location

      Also in the comments or messages field add in "Do not release without Senders verbal approval."

      Of course you will need to get the supplier to agree to this. You send the supplier the MTCN as usual, so that they can verify that the funds have been transferred but you set it up so that once your customer receives their orders and approves it, you call Western Union, change the receivers name to their name and release the funds.

      Another way to this to level out the playing field (this is a little more expensive, but may be worth it) make two transfers - half and half. Once you receive the tracking numbers and "they check out" you agree to release half the funds. The other half is released when the customer approves the order.

      Using this method will balance out the risk half and half.

      So what do you think? Is this a reasonable solution?
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    2. WholesaleMod's Avatar
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      #2
      Hi XtendedOwner,

      Welcome to Wholesale Forum

      Some great creative thinking there, however please note the following two issues:

      1. Often the receiver and the receiving WU provider are in collusion to scam;

      2. What stops a fraudulent buyer from not making the change in recipient after his customer has received the goods, and instead get the payment back?

      Your solution assumes that the supplier trusts the buyer to make the switch of WU payment recipient once the customer has received the goods. This assumes that the supplier has full trust in the buyer from the start.

      If that was the case, then there are cheaper methods to send a payment to the supplier after the delivery has taken place.
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    3. XtendedOwner is offline

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      #3

      Quote:

      Originally Posted by WholesaleMod View Post
      Hi XtendedOwner,

      Welcome to Wholesale Forum

      Some great creative thinking there, however please note the following two issues:

      1. Often the receiver and the receiving WU provider are in collusion to scam;

      2. What stops a fraudulent buyer from not making the change in recipient after his customer has received the goods, and instead get the payment back?

      Your solution assumes that the supplier trusts the buyer to make the switch of WU payment recipient once the customer has received the goods. This assumes that the supplier has full trust in the buyer from the start.

      If that was the case, then there are cheaper methods to send a payment to the supplier after the delivery has taken place.
      You have a very good point there, however this is for the benefit of the buyer. The supplier doesn't have to necessarily trust the buyer, in a sense as they already have the upper hand. The buyer, on the other hand is at a total disadvantage.
      Last week I almost lost $420 because I wired by western union that much to a guy in China for two TV's. Luckily for me, he gave me the wrong last name so he was unable to pick up the funds. (Note** I did check information given against Whois.com and also at the website for the store ** All checked out) So when he got a hold of me to have me change the last name of the receiver, I got suspicious . I typed in the new last name and it popped up Nigeria. So that right there told me what I was dealing with. I was able to cancel before any bad went down.

      The buyer needs to find some way of protecting themselves from people taking their money and running. I figure this is one way that could be done. Considering the fact the buyer needs the supplier, he is less likely to burn the supplier. The supplier doesn't necessarily need the buyer because chances are he has twenty more to take their place. Once this suggestion is made, I am thinking the scammer is going to refuse the order and walk away.

      One area I see where this could go foul, is there is nothing stopping the scammer from accepting the order and taking half the money and running. So for this I would suggest maybe holding all the funds the first or second time of dealing with the new supplier. If you release the first half after receiving a working tracking number, they could mail you a box of rocks. Who knows.

      And yes, the buyer could wait till items are shipped and pull the other half of the cash, \but if he needs suppliers as bad as I do, he wont.

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      #4
      You need to consider the issue from both sides

      Suppliers also lose money to scam buyers. What stops an ill intentioned buyer from not sending the remaining half of the payment once he has received the goods? The supplier is just as afraid. There is no fail safe solution. The safest options include escrow and L/C, and even then both parties need to document the process carefully.

    5. XtendedOwner is offline

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      #5

      Quote:

      Originally Posted by WholesaleMod View Post
      You need to consider the issue from both sides

      Suppliers also lose money to scam buyers. What stops an ill intentioned buyer from not sending the remaining half of the payment once he has received the goods? The supplier is just as afraid. There is no fail safe solution. The safest options include escrow and L/C, and even then both parties need to document the process carefully.
      Yes of course there are scam buyers out there, but scam sellers far outnumber them I'm sure.
      I never claimed for this to be a fool proof way of trading. Anybody should know there is no 100%
      guarantee. This just kinda levels out the playing field. I mean, why should the buyer be the only
      one to take the risk when it's clearly the supplier or rather the make believe suppliers that are
      mostly playing foul? Besides, most companies this big usually have insurance.

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      #6
      Please note insurance wouldn't cover for what they'd consider negligence. Also the assumption that scam sellers far outnumber scam buyers is incorrect.

      Both escrow and L/C share the risk between the buyer and the seller equally, that's why they are considered the most secure. Most trade transactions happen by T/T, which is the cheapest payment method once you know and trust the supplier to deliver.

      Our suggestion is that you consider using an agent or intermediary you can trust to reduce your risks from importing. Using them will increase your unit cost, however it should also decrease your losses from non-deliveries, fewer returns and happier repeat customers.

      Hope this helps

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      #7

      Quote:

      Originally Posted by WholesaleMod View Post
      Please note insurance wouldn't cover for what they'd consider negligence. Also the assumption that scam sellers far outnumber scam buyers is incorrect.

      Both escrow and L/C share the risk between the buyer and the seller equally, that's why they are considered the most secure. Most trade transactions happen by T/T, which is the cheapest payment method once you know and trust the supplier to deliver.



      Our suggestion is that you consider using an agent or intermediary you can trust to reduce your risks from importing. Using them will increase your unit cost, however it should also decrease your losses from non-deliveries, fewer returns and happier repeat customers.

      Hope this helps
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