China Sourcing Scams: Red Flags and Payment Fraud

By ChinaManufacturers.com Editorial Desk · Updated 30 October 2026 · How this page was researched

The short answer: watch the payment, not only the supplier

The costliest documented scam facing importers is not a fake factory but a diverted payment: a criminal inserts new bank details into a genuine order and the buyer wires the deposit or balance to the criminal's account. The FBI's Internet Crime Complaint Center (IC3) recorded 24,768 business email compromise complaints and $3,046,598,558 in reported losses in 2025 (FBI Internet Crime Report 2025, published April 2026).

A scam, in this guide, is any scheme that induces a buyer to pay for goods it will not receive, or to pay someone other than its supplier. Business email compromise (BEC) is IC3's term for "a scam targeting businesses or individuals working with suppliers and/or businesses regularly performing wire transfer payments," carried out by compromising email accounts, phone numbers or virtual meeting applications "to conduct unauthorized transfer of funds."

Read the figures with their limits. IC3 data are complaints — reports filed by victims — so they are not a census, and the reported losses are what those victims stated. The BEC category covers every kind of BEC, including real-estate fraud, not only supplier payments. No official source quantifies fraud by Chinese suppliers specifically, and this page does not imply one.

How bank-account-change fraud works

The pattern is consistent across cases, and it exploits a normal step in China sourcing: a large international wire, often split into a deposit before production and a balance before shipment.

Access. The criminal gains access to the supplier's or the buyer's email, or registers a look-alike domain.
Observation. The criminal reads the order thread and learns the amounts, the people and the payment dates.
The request. A message announces "new bank details", timed to a deposit or balance payment.
The loss. The importer wires to an account the criminal controls. The supplier is still unpaid and will not ship.

Both parties to a genuine order can be victims at once. The buyer has lost the money; the supplier has lost the sale. IC3 also reported that businesses lost more than $30 million in 2025 to BEC scams involving artificial intelligence, so a convincing message or voice is not, on its own, evidence that the supplier is on the other end.

The controls that stop it

Two controls address bank-account-change fraud directly, and both work before the money moves.

Call back on a number already on file

Confirm any change of beneficiary — the account holder that receives the wire — by calling the supplier on a number you already hold, not one supplied in the message requesting the change. A change request that arrives by email or messaging app is, by itself, no evidence that the supplier sent it.

Match the beneficiary to the contracting entity

The account holder should be the legal entity on the contract, with the same Chinese name and Unified Social Credit Code record on the official register, gsxt.gov.cn. A beneficiary that is an individual, or a company in a different city or jurisdiction from the supplier, is a mismatch to investigate.

Some mismatches are legitimate. A trading company or export agent can be the proper payee for goods made by a factory. The test is documentation: the contract should name the payee, and any change should be confirmed independently. "Chinese companies often use agents" is true, and it is also the explanation a criminal will offer.

Red flags of a fake or misrepresented supplier

The patterns below are descriptive. No official statistic ranks them, but each points to a specific check. A red flag here means a fact that requires an explanation before payment, not proof of fraud.

A trading company presenting as the factory. Business scope limited to sales or trade, an office-tower address, no production evidence.
Prices well below the market for the specification. Usually a different material, a different product, or no product.
Refusal of a video call or a third-party audit. A real factory can show its line.
A request to pay a personal account. The payee should be the contracting company or a named, documented agent.
A business license whose USCC does not match the register. This ends the check.
A request to pay outside a platform's protection program. On Alibaba.com, Trade Assurance covers orders placed and paid through the platform; Alibaba's own guide warns "never pay outside the platform."
Samples that differ from production. Bait-and-switch shows up only when production is inspected against the approved sample.

A single positive reference, years on a platform, or a membership badge does not clear these flags. Each describes the supplier's marketing, not its legal identity or its production.

Counterfeit risk is a separate red flag

Buyers of branded or brand-like goods face a different scam: products that infringe trademarks, which US Customs and Border Protection (CBP) can seize at the border. China and Hong Kong supplied about 87% of the MSRP value of goods seized for IPR violations in fiscal year 2025, based on CBP's FY2025 statistics and the USTR 2026 Special 301 Report; by quantity, CBP puts the China and Hong Kong share at about 67% (CBP Publication 5471-0326). CBP notes that these are not official trade statistics, and MSRP values seized goods as if they were genuine.

USTR's 2025 Review of Notorious Markets for Counterfeiting and Piracy, published in 2026, names DHgate and Taobao as online notorious markets; AliExpress does not appear in the document (USTR). USTR's list reflects stakeholder nominations and is not a legal finding of infringement. Sourcing a private-label product through a small-lot resale channel that USTR names is a poor fit for an importer who must answer for what it imports.

If you have already paid the wrong account

Speed decides the outcome. IC3's guidance is direct: "If you discover a fraudulent transfer, time is of the essence. Immediately, contact your financial institution and request a recall of the funds." Then file a complaint at ic3.gov "regardless of the amount lost," with full transaction details.

Recovery is possible but not assured. In 2025, IC3's Recovery Asset Team ran its Financial Fraud Kill Chain (FFKC — a procedure for asking banks to freeze funds in fraudulent transfers) on 3,900 incidents involving $1,163,919,846 in attempted theft, and froze $679,013,183, a 58% success rate. International cases were far fewer: 326 incidents with $171,970,560 frozen, against 3,574 domestic incidents with $507,042,623 frozen. IC3 notes that 2025 initiations rose in tech-support and account-takeover cases, so the BEC share of those results is not given.

Contact the supplier too, by a number on file. It has not been paid, and it may hold evidence of the compromise, such as a hacked mailbox, that the bank and IC3 need.

What the statistics show, and what they do not

IC3 received 1,008,597 complaints in 2025 with $20.877 billion in reported losses, a 26% increase in losses from 2024. Most of those complaints have nothing to do with trade; the figure is context for the scale of reported internet-enabled fraud, not a measure of sourcing risk.

IC3 category	2023	2024	2025
BEC complaints	21,489	21,442	24,768
BEC reported losses	$2,946,830,270	$2,770,151,146	$3,046,598,558
Non-payment/non-delivery complaints	—	49,572	56,478
Non-payment/non-delivery reported losses	—	$785,436,888	$503,373,587

Non-payment and non-delivery cases are mostly consumer and online-purchase complaints, so they do not measure B2B sourcing fraud. IC3's 2025 report includes one case example in which a domestic fraud chain led to "a fraudulent international account in Hong Kong," handled through FinCEN and the FBI Legal Attaché in Hong Kong; that is a single case, not a statistic. The report's country table counts complaints filed from abroad by victims, not where stolen funds went. No official figure for losses to fraudulent Chinese suppliers, or for wires sent to China and Hong Kong, was found.

Frequently asked questions

How much does business email compromise cost US victims?

Victims reported $3,046,598,558 in BEC losses across 24,768 complaints in 2025, according to the FBI's Internet Crime Report 2025. That was up from $2,770,151,146 in 2024. The data are complaint-based, so they count only losses victims chose to report, and the category covers all BEC, not only payments to suppliers.

What should I do if I paid a fake bank account?

Contact your bank immediately and ask it to recall the funds, then file a complaint at ic3.gov with the full transaction details. IC3 says time is of the essence and asks for reports regardless of the amount lost. Tell your real supplier as well, using a phone number you already hold, because its email may be the compromised account.

Can money wired to a scammer be recovered?

Sometimes. In 2025, IC3's Recovery Asset Team froze $679,013,183 of $1,163,919,846 in attempted theft across 3,900 Financial Fraud Kill Chain incidents, a 58% success rate. International freezes were much less common: 326 incidents with $171,970,560 frozen. Recovery depends on reporting quickly, before the funds move onward.

Is a supplier that asks me to pay a different company always a scam?

Not always; a trading company or export agent can be a legitimate payee for goods a factory makes. The payee should be named in the contract, and any change of beneficiary should be confirmed by calling the supplier on a number already on file. An undocumented change, or a personal account, is the pattern of payment-diversion fraud.

How can I tell if a Chinese supplier is a scam?

Check its business license USCC against gsxt.gov.cn, confirm the bank beneficiary is the same legal entity, and ask for a live video tour or a third-party audit. Prices far below market, refusal of any inspection, or a request to pay a personal account or to pay outside a platform's protection program are reasons to stop before paying.

Are there statistics on fraud by Chinese suppliers specifically?

No official source quantifying fraud by Chinese suppliers was found. IC3's 2025 report does not publish BEC losses by the country where the money went, and its country table counts victims filing from abroad. CBP's seizure data do show that China and Hong Kong supplied about 87% of the value of counterfeit goods seized in fiscal year 2025.

Avoiding China sourcing scams and red flags