Deposit-Then-Disappear
An attractive price secures a 30% deposit, after which the supplier stalls, invents problems, and ultimately goes silent.
How the scam works
- 1.Quote is noticeably cheaper than the market to win the order fast.
- 2.Supplier requests a large upfront deposit to 'secure raw material'.
- 3.After payment, production is delayed with repeated excuses.
- 4.Communication stops; the entity is dissolved or was never real.
Red flags to watch for
- Price meaningfully below every other quote you received.
- Demands an unusually high deposit before any verification.
- Only accepts payment to a personal or third-party account.
How to protect yourself
- Keep deposits modest and tie payments to inspection milestones.
- Prefer an L/C or escrow for first orders with a new supplier.
- Be skeptical of prices that are too good to be true.
In depth
The deposit-and-disappear scam is the simplest of all: an attractive quote, gentle pressure to secure the price, a request for a large up-front deposit — and then silence. The larger the deposit and the more eager the buyer, the more attractive the target, which is why this scam clusters around first orders chasing a too-good-to-be-true price.
The structural defense is to keep the deposit small and your leverage intact. Negotiate the smallest deposit the supplier will accept, tie subsequent payments to verifiable inspection milestones, and for a first order prefer a letter of credit or reputable escrow over a bare deposit wire. Structured this way, the worst case becomes a cancelled deal rather than an unrecoverable loss.
Related reading
Frequently asked questions
- A Chinese supplier took my deposit and went silent — what can I do?
- Act fast: contact your bank to attempt a recall, preserve all evidence, and file a formal fraud report. To avoid it next time, keep deposits modest, tie payments to inspection milestones, and prefer a letter of credit or escrow for first orders.
- Why is a price far below the market a warning sign?
- A quote noticeably cheaper than every other supplier is a classic hook used to win the order and secure a large deposit quickly. Genuine mills rarely undercut the market significantly, so treat outlier-low prices with extra scrutiny.
Worried this is happening to you?
Run your supplier through the structured verification checklist.