Most trade losses do not come from bad products. They come from paying the wrong counterparty. A few checks before the first payment remove most of that risk.
1. Confirm the company exists
Ask for the company registration and check it against the official registry in the supplier’s country. The name, address and directors should match the documents you will receive later.
2. Match the bank account to the company
The beneficiary on the proforma invoice should be the same legal entity you are contracting with, in the same country. Treat any request to pay a third party or a personal account as a warning sign, and confirm changes to bank details by phone using a number you already hold.
3. Ask for evidence of production
Recent mill test certificates, product certifications, factory photos with identifiable details, or a video call from the production floor all help. A producer can usually provide these quickly; a broker reselling unseen goods often cannot.
4. Check references and trade history
Ask for references from buyers in markets similar to yours, and look for a consistent trading history. Long, unexplained gaps or very new companies offering large volumes deserve extra care.
5. Be wary of prices far below market
Commodity prices are widely known. An offer well below the market, combined with pressure to pay quickly or to send money for “documents” first, is a common pattern in trade fraud.
6. Use inspection and payment terms that protect you
Independent inspection before loading and payment structures such as a letter of credit or payment against documents reduce exposure on first trades. Move to simpler terms as trust is earned.
TP4 reviews relevant business and trade information before commercial terms. That reduces risk; it does not replace your own checks. See the Trust Center.
General information, not legal, tax or financial advice. Updated October 2026.