Question: “I bought goods from a Chinese supplier, but after my full payment they sent me a container containing products with a market value of close to zero! I want my money back. What can I do?”
“Unfortunately, fraud in sourcing is not uncommon in China. Although the risks will never be eliminated, there are ways to protect from these kind of situations in advance, for example by verifying the credentials of Chinese counterparts and their legal representative, having a detailed written contract in place under Chinese laws and making sure all aspects of each purchase order are on paper and confirmed by the Chinese supplier with their company stamp. This will not only decrease the chance of fraud, but will also make it much easier to take legal action.
If you have a strong legal case, then you can hire a lawyer to send a demand letter, and perhaps try to negotiate a settlement. Alternatively, you can file the case in court or arbitration. The key to winning a court (or arbitration) case in China is whether you have sufficient evidence of the Chinese supplier's breach. It's also good to freeze the opponent's assets (to put pressure on him). Some things to be careful about: small cases are very difficult to litigate in China because of the costs involved, and you need to try avoiding local protectionism.
In your case, the first step is to confirm whether the Chinese supplier legally exists; if not, then a demand letter or lawsuit will not work. However you could still try to convince the local police to start an investigation. Although police officers in China are often reluctant to take on cases, but in our experience they are more willing to help if the case is well-prepared: they will usually require, in Chinese, i) a clear story-line of the deal and relationship; ii) copies of the purchase order, commercial invoice, bill of lading, packing list and other documents proving the existence/nature of the transaction; iii) copies of relevant emails; iv) copies of the bank payment script; v) the details of the bank account; vi) copies of the company registration information (in case of an individual information about his passport or other ID), and vii) copies of the company registration documents of your company. Pictures or videos of the flawed products (especially at moment of opening the container's seal) are also very helpful, as are reports from other police or customs.
It sounds pretty simple, but we know it is not. Still, you do have some options, and we strongly recommend that you find a good lawyer to advise you on the specific aspects of this case, and to help you implement the best strategy.”