The “Fake Factory” Scam: How to Verify a Chinese Supplier Before You Pay a Deposit

You found a supplier on Alibaba. Their photos look professional, and their prices are low. You are ready to wire the 30% down payment. Stop. In our years of handling freight forwarding and customs brokerage, the most painful stories we hear aren’t about lost cargo—they are about money sent to “factories” that didn’t exist. Knowing how to verify a Chinese supplier is the single most important step for any Philippine importer.

1. The “Business License” Check Every legitimate company in China must have a business license. If they refuse to show it, walk away. Once you have it, check the “Scope of Business” (经营范围) section

• Factory: Look for keywords like “Production” (生产), “Manufacturing” (制造), or “Processing” (加工).
• Trader: Will typically list words like “Wholesale” (批发), “Distribution” (经销), or “Import/Export” (进出口).

According to the China-Britain Business Council, verifying the business scope is the single most effective way to determine legal operational capacity.

2. The “Real-Time” Video Audit Photos can be stolen. Ask your sales contact: “Can you video call me right now and walk onto the production floor?”

• Red Flag: “The boss is away,” “The WiFi is bad,” or “We don’t allow cameras.”
• Green Flag: A live walkthrough where the logo on the workers’ uniforms matches the company name on the license.

3. The “Sample” Trap A common scam is sending a high-quality sample bought from a competitor, then mass-producing low-quality goods for your order.

The HBK Strategy: Never rely on a single sample sent directly to you. Use our China Warehouse Address to consolidate samples from three different suppliers. This allows you to compare quality side-by-side before you commit to a bulk order.

Financial Red Flags to Watch When they send the Proforma Invoice (PI), look closely at the bank account Beneficiary Name.

• Legit: The bank account name matches the business license name perfectly (in English or Pinyin).
• Risky: The account is a personal name or an offshore company in Hong Kong.
• The Fix: Using a secure payment method is critical. Our Supplier Payment Assistance service ensures your money goes to a verified corporate account, adding a layer of safety that direct transfers often lack.

Watch: How to Spot a Fake License To see exactly how to read the Chinese characters on a license, watch this guide.

Professional Verification If your order value is high, “trusting your gut” is not a strategy. You need boots on the ground. While HBK focuses on logistics, we can often verify if a supplier’s address is inside a legitimate industrial park based on our daily pickups.


Don’t gamble with your capital. Verify first, ship second.