Due Diligence Doubts?

A Hot Tip about Country Risk in China

Last updated: 6 Nov 2012

Which Due Diligence methods are best? You may want to rethink your position after reading this. Value is meaningless if accuracy is in question.

Pu t a PI or Professional DD team in your corner! If you have ever been cheated in a business deal, no matter how large or small the amount, you have learned the true value of due diligence. The insult to your ego and personal dignity is often more painful than your financial loss. But one or two bad experiences is not enough to properly prepare or train you to do your own investigations in the future. There are over 300 known variations of scams and more than half of them are so sophisticated, that even some law enforcement officers took the bait! While most scams are aimed at individual investors or on-line buyers, the most believable and deadly frauds are the B2B frauds. B2B frauds come is all sorts of shapes and sizes but they all focus on your ?need and greed? buttons. The scammers know that every business owner has the heart of an entrepreneur and the greed to match. More business is what every business wants and needs. So the sly guys will devise devious scams masquerading within elaborate consulting or marketing contracts design not only to swindle you, but to obtain your client database and personal financial data that will then be sold for thousands of dollars to yet other con artists that specialize in identity fraud! Such frauds are often packaged within barter exchanges which guarantee to unload all of your unsold inventory or allow you to acquire millions of raw materials without paying taxes at huge discounts. The sales pitch is irresistible but you will see that thousands of people who join barter exchanges coincidentally become victims of identity theft shortly thereafter. While some barter exchanges are in fact legit, you might want to visit a few of these links to see if you really want to disclose the detailed disclosures they want from you: http://www.scamchecker.com/content/steve-and-marti-bolles-merchants-barter-exchange-steve- bolles-800-822-7204-multiple-frauds-i http://www.ripoffreport.com/directory/Merchants-Barter-Exchange.aspx Another favorite B2B scam are free directory and on-line ads. Free advertising sounds great but when your email mailbox fills up with endless and useless spam, you will wonder why your $20,000 industrial pumps are being sold on a penis enlargement web site. These scams will include contracts that they collect sizable bonuses ?if your web site gets 5,000 more hits every week? (for example). They deliberately do not include the words ?qualified unique hits? and after you get hit with a few monthly invoices for $3,500-$5,000, you will surely ask to delist your free directory listing and ads, only to learn there is a $999 ?delisting fee?. The devil is always in the details and that is what all that fine print is always about. But this is relative peanuts friends. The costly frauds can cost you ownership of your company and any assets owned by your company. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$ $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ We don?t have enough time to detail all of these frauds here and now, but you are welcome to see quite a few of them detailed on our web site. But the focus here is that you alone will never find all the red flags of a fraud, or even enough of them to alert you that you are setting yourself up for a swindle. You might indeed be alerted by demands for up-front fees if made verbally by a prospective private funder, but would you really think twice if they put you on the phone with five satisfied clients who provided endless praise about the millions raised for them in less than 45 days? You would learn later that the glorious referrals given to you came from paid shills. Professional scams require professional due diligence and if you truly think otherwise, sooner or later you too will join the carnage of victims and promptly change your mind. So, would YOU rather learn from someone else?s mistake or your own my friend? Finding the right due diligence partner is like finding the right doctor. When you have heart problems you don?t waste your time consulting with podiatrists. Likewise, when you are pursuing business or investments in China, you don?t hire some P.I. from Boston who earns his living exposing insurance fraud or cheating husbands. Of course you?ll be tempted to save a few bucks and try to figure it all out for yourself at some FraudWatch.com web site. If you think that will save your butt from the hungry sharks, read the article at this link: http://www.globaltrade.net/international-trade-import-exports/f/business/pdf/China/Investing- Cyberspace-Due-Diligence-Options.html Due Diligence investigators usually specialize in a certain market, industry, or product line. For example there are many great snoops that can spot on-line internet fraud but wouldn?t recognize joint venture fraud if they tripped over it on the way to the toilet. Seriously, if you contemplate doing any business venture, investment, or trading in China, let the China Trade Commission give you some referrals of local specialists best suited for your specific needs. Local investigators in China will have the eyes, ears, and resources on-site that nobody in another country could ever acquire. Accurate business intelligence is more current and easier to develop when investigators have friendly and cooperative long time sources, or know how to persuade someone properly to get the information they need. To see what kind of information is available on a prospective partner, company, or government official, you really need to see a sample due diligence report and you can get one for free at this below link to use as your basic guide: http://www.globaltrade.net/promo/Due-Diligence- Report---Sample.html. This writer first learned about due diligence the hard way - 28 years ago after losing $60,000 in an elaborate investment scheme fronted by a respected Merrill Lynch executive who was in on the scam. Shortly thereafter, I was hired by the U.S. Treasury department as a CID special agent, and spent six months learning all about financial and business investigations. Ever since, I have never stopped learning. Timing is everything in life! Hopefully, YOU can learn about ?DD? at a far less costly price than I had to pay. Remember our motto? ?Be Sure ? Not Sorry?. ? The China Trade Commission $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ $$
Posted: 15 September 2011, last updated 6 November 2012

See more from Country Risk in China

Expert Views    
Why 37% Of Foreign Businesses Fail In China Within 2 Years..   By China Security Solutions Ltd.
Hot Tips    
Cyberspace Due Diligence Options   By China Trade Commission
Due Diligence Doubts?   By China Trade Commission