Fake Supplier Scams

Fake supplier scams involve fraudulent vendors who make contact with a business, secure an order or contract, collect payment or a substantial deposit, and then deliver nothing — disappearing once the money clears. A second variant involves cloning the identity of a legitimate, well-regarded supplier: the scammer replicates the real company's name, branding, and website to intercept orders genuinely intended for the authentic business.

The fraud can be highly sophisticated. Some fake suppliers operate convincing websites, produce professional quotes and catalogues, and maintain brief telephone contact to build trust before requesting payment. Others work the opposite extreme: they respond to tender opportunities with implausibly low pricing, using urgency and competitive pressure to hurry procurement staff past their due-diligence steps.

Fake supplier scams disproportionately affect importers and buyers sourcing goods from overseas, where physical verification is harder and the supplier relationship is largely conducted digitally. B2B marketplaces and industry directories have become a common hunting ground, as fraudsters can register under legitimate-sounding company names with minimal scrutiny. The financial impact goes beyond the immediate loss: procurement disruption, missed production schedules, and reputational damage with end customers often compound the initial fraud.

In a typical case, the fake supplier makes initial contact either by responding to a public tender, cold-emailing a procurement team, or advertising on a B2B marketplace. Their offering is positioned attractively — often significantly below comparable market pricing — with professional documentation that may include brochures, certifications, and references. Early communications are handled promptly and professionally to establish confidence.

Once a purchase order is placed, the supplier requests a deposit — commonly 30–50% of the order value — by bank transfer. Some will conduct a small, genuine initial delivery to establish credibility before seeking a much larger follow-on order that they then default on. After the deposit clears, contact slows, then stops entirely. The company registration number, website, and phone lines may all disappear or prove to be fabricated from the outset.

In the clone-supplier variant, the fraudster monitors public tenders or identifies a genuine supplier in your industry, then contacts your procurement team pretending to be that supplier — sometimes intercepting genuine email threads following a business email compromise. Payment instructions are subtly different from the real supplier's, redirecting funds to the fraudster's account.

Fake supplier scams succeed because procurement teams face constant pressure to reduce costs and maintain supply continuity. A below-market quote from a new supplier looks like a win; scrutinising it too hard risks losing a potentially valuable source. This competitive dynamic creates a built-in incentive to move quickly.

The fraud also exploits the fact that many supplier relationships — particularly in digital-first industries and international trade — are never verified in person. A convincing website, a registered company number, and responsive email communication can all be fabricated cheaply and quickly.

Finally, upfront deposits have become normalised in many sectors, particularly for custom manufacturing, international freight, and seasonal goods. Fraudsters position themselves in exactly these contexts, where an advance payment request does not raise immediate suspicion. By the time the goods fail to arrive, the criminal has long since moved on.

A procurement manager at a manufacturer finds a new supplier offering components at a significant discount on a B2B marketplace. The supplier's website looks professional and they respond quickly to enquiries. A sample order is placed for a small amount, delivered promptly. A much larger order follows with a 40% advance payment by bank transfer. Delivery dates are repeatedly pushed back. After several weeks, emails bounce, the phone number is disconnected, and the website disappears. The company registration number belonged to a dissolved entity.

We can supply [product] at 40% below market rate — secure your order with a 50% deposit by bank transfer today and we'll ship within 10 days.

Our current stock of [goods] is available for immediate delivery. As a new customer introductory offer, we require only a 30% advance. Please transfer [amount] to reserve your allocation.

I'm reaching out from [company name] regarding your recent tender for [goods]. We can supply at [low price] per unit with delivery in [timeframe]. Please find our quote and bank details attached.

To confirm your order, please transfer the deposit of [amount] to the following account. We will issue a confirmation and shipping timeline upon receipt.

We are an authorised distributor of [brand]. Due to end-of-quarter clearance, we are offering stock at [discount]% below RRP for bank-transfer orders placed this week only.

Following our sample delivery, we can confirm availability of the full order quantity. A 40% advance of [amount] will secure production. We anticipate dispatch in [timeframe].

Before placing an order with any new supplier — particularly one requiring an upfront deposit — apply a structured due-diligence process:

- Company registration: verify the company number against the official corporate registry in their country of incorporation. Check the registered address, filing history, and director names. - Physical verification: where feasible, arrange a site visit, or commission a third-party verification service to confirm the premises exist and match the claimed operation. - Reference checks: request at least two trade references from existing customers, and call them using numbers you find independently — not numbers provided by the supplier. - Bank detail cross-check: confirm the bank account name matches the legal company name. Request a copy of the supplier's bank statement header showing account holder and IBAN/sort code. - Start small: for new suppliers, place an initial trial order of modest value on protected payment terms (letter of credit or escrow) before committing to large upfront transfers. - Reverse-search the supplier's email domain and website registration date. A professional company website registered last month is a major warning sign.