China Trade Commission Begins Company Certification To Fight Business, Consumer, & Investment Fraud

Online, July 23, 2011 (Newswire.com) - It was announced today by CTC's Public Affairs Director Paul Zhang that a new company certification process was launched by the China Trade Commission this week that will help reduce investment and business fraud between Eastern and Western companies and entrepreneurs. "Currently, more than 1,297 scams have been reported or identified by those trying to do business between China and the West. Both Chinese and foreign businessmen and investors have been swindled for more than $300 million USD since 2010" reported Zhang.

According to statistics obtained by the CTC, a full 38% of the frauds are generated from on-line sales of either non-existent products, or products that were never shipped, or shipped products that are clearly defective. "Small Chinese operators who do not expect repeat business will knowingly ship defective goods knowing that buyers abroad have no affordable recourse other than to file a law suit in China which is a costly undertaking". When buyer complain, the shipper merely suggests that the products were damaged in the shipping process and suggests that they "insure the next shipment". Bait and switch scams are also very popular and claim many victims.

But far larger frauds are perpetrated in the commodities and investment marketplace. Chinese investors have been sold "Water-front luxury homes and real estate" on the shores of the Everglades swamplands, and in abandoned areas ravaged by Hurricane Katrina for millions of dollars. Scammers don't hesitate to use forged properties appraisals, land titles, and title search reports. One Chinese businessman from Shanghai, bought a $23 million home in Beverly Hills only to learn that it is the subject of a complicated divorce and IRS law suit that has already been dragging on three years. The broker who even leased a luxury office in L.A. to perpetrate this fraud has since vanished. For any purchase over $100,000USD the CTC urges buyers to spend a few dollars on professional due diligence.

So the China Trade Commission has now expanded its professional due diligence services to include an international database from China, America, Australia, Canada, and the U.K. to identify known frauds and scammers on a Black List with provisions for new scam alerts to be posted by victims. "At least by identifying the 67.000 known frauds, we can help stop the carnage of new victims" added CTC Executive Director Anthony DeMarco. The database will be added to the CTC's website within 15 days and the scam alerts are already being posted.

Further, for a small due diligence fee, anyone can make an inquiry about any company in any country and receive a report back from the CTC within 10-30 days as to the reputation and business history of that company. CTC members will receive their report for free. These due diligence reports will help businessmen from abroad and in China make intelligent business and/or investment decisions. "We want to lower the risks for all parties and encourage the development of a safe business environment." added DeMarco who went on to add, "One big problem we need to overcome is "face". Too many Chinese businessmen are too embarrassed to report they were victimized, so we will guarantee confidentiality of all reports received".

Companies will receive CTC certifications based on a 5 star basis. Companies with complaint-free unblemished business histories will receive 5 star ratings whereas those with more than five complaints in any 90 day period will not receive any certification at all until the complaints have been satisfied. The CTC has assigned a staff of five full-time due diligence specialists to undertake this new project, and will be recruiting university interns as well to help expand the program in coming months. "If we can reduce the fraud rate by even 2%, this program will be a success" concluded DeMarco.

China currently does more than $3 Billion USD of business every day with the world, and almost 5% of this business includes some allegations of fraud or misrepresentation between buyer and seller. Only Nigeria has a higher complaint rate, but America is not far behind. In all fairness however, past investigations and arbitration conducted by the CTC indicate that about 50% of the complaints ultimately boil down to simple misunderstandings and misinterpretations of terms and conditions due to language problems. "Yet many unethical business owners deliberately exploit the language gap with pages of legal fine-print that even confuses lawyers, to swindle others, and we want to expose them to the world on-line" concluded Zhang.