How to Check a Wholesale Supplier Is Real Before You Send Money
How wholesale scams work, which warning signs matter, a one-hour check using official registers, safer first-order terms, and what to do if money has gone.
Avoiding risk 11 min read Updated Nov 4, 2026
In this guide
- How the common scams actually work
- Which warning signs deserve the most weight
- The one-hour check anyone can do
- What each payment method does and does not protect
- How samples and inspection protect you, and where they fall short
- The mistakes people actually make
- Exactly what to do if money has already gone
- Frequently asked questions
- Your next steps
You have a good price, a professional website and a request for a deposit by Friday. From your desk, you cannot tell a real wholesaler from a small honest company with a thin web presence, or from someone borrowing a real company's name. Here is a one-hour check, safer terms for a first order, and a plan for the day something goes wrong.
How the common scams actually work
Each scam has a weak point you can test, which is more useful than memorising a list of signs.
Cloned websites of real companies
The fraudster copies a real company's site and registration number, then buys a similar domain. The register checks out because the company is real. Your counterparty is not. Take a phone number from an independent source and ask the company whether it knows your contact.
Fake bank detail changes
The supplier may be entirely genuine. Someone gets into a mailbox on either side, or registers a lookalike domain, waits for an invoice to fall due and announces a new bank account. A call to a number you already held usually ends it.
Deposit and disappear
A company, sometimes properly registered, shows a catalogue of stock it never had. It takes deposits, then stalls with a customs delay or release fee until the replies stop. One good small delivery is evidence, not proof. Samples, a live video call and independent inspection are hard to fake cheaply.
Branded stock at impossible prices
Big brands far below trade price usually mean counterfeits, diverted goods or goods that do not exist. You carry risk even if something arrives: US Customs and Border Protection says it targets and seizes counterfeit imports. Ask the brand owner who its authorized distributors are.
Drop-shipping middlemen posing as wholesalers
This is often not fraud, since reselling is legal and can be useful. The problem is misdescription: a "wholesaler" with no stock adds margin and has no control over quality. Ask who holds the stock, where it ships from and who handles returns. If you want that model on purpose, see drop-shipping suppliers for Shopify and WooCommerce.
Which warning signs deserve the most weight
Many small honest companies publish very little. So sort what you find into two piles:
- Could not confirm: information is missing or a check returned nothing. Ask, and try another route.
- Warning sign: the information contradicts itself, or the behaviour only makes sense if someone wants to avoid being checked. Pause payment until an explanation can be verified.
| Weight | What you see | Possible innocent explanation |
|---|---|---|
| Stop | Bank details changed by email or chat | A real change, confirmed by calling a known number |
| Stop | Only crypto, gift cards or a payment app accepted | Hard to think of one for a trade order |
| Stop | Payee is a private person or unrelated company | Invoice finance or a group company, with documents |
| Stop | Register shows dissolved, or details differ from what you were told | A recent change, visible in the filing history |
| Serious | Refuses samples, video, inspection and references alike | One refusal may be policy; all of them is a pattern |
| Serious | Branded goods far below trade price, no proof of authorization | Clearance lots, with paperwork |
| Serious | Pressure to pay today, new fees after payment | A real deadline survives a request for proof |
| Some | Young domain, yet claims 20 years of trading | Rebrand or new domain |
| Low | Free email, virtual office, hidden domain owner, no reviews | Common among very small traders |
Declining to buy needs no accusation. If you suspect fraud, go to your bank and the authorities. Do not post that a named company is a scam: you may have met a clone of an innocent business, and you could face a legal claim yourself.
The one-hour check anyone can do
Work in order and note what you find.
Step 1: Get the legal details in writing (5 minutes)
Subject: New supplier details before our first order
Hello [name],
We would like to place a first order. For our standard supplier check, please send:
- Your legal company name, registration number and VAT or tax number
- Your registered address and the address goods ship from
- The bank account holder name shown on your invoices
- Two trade references
- For branded goods, evidence of authorization
We would also like a short video call from your premises and a paid sample. We confirm bank details by phone and will not act on any later change sent by email.
Kind regards, [name, company]
An honest supplier will not object. Its own account opening process probably asks you for similar things.
Step 2: Search the official register (15 minutes)
| Market | Where to look | Limits |
|---|---|---|
| UK | Companies House search: free address, incorporation date, officers, filings, previous names, insolvency | Sole traders are not listed. Director identity checks have been a legal requirement since 18 November 2025, but GOV.UK says they make impersonation harder, not impossible |
| UK | GOV.UK "Check a UK VAT number": validity, name, address | A small business may not be VAT registered |
| EU | "Find a company" on the European e-Justice Portal, then the national register | Detail and fees vary by country |
| EU | VIES VAT check: whether the number is valid | Name and address are often not shown. A correct number can fail if not activated for intra-EU trade, so ask, or check with the tax office |
| US | State registries through the NASS directory | No single national list, so try the state of formation and of operation. The SBA says sole proprietors using their legal name may not need to register |
| China | The national enterprise credit publicity site, gsxt.gov.cn, widely cited as the official source | Chinese only and may be hard to reach from abroad, so test it or ask a Chinese-reading adviser |
Compare name, number, address and age with what you were told. Remember what this proves: a company with this name exists. It does not show your contact works there.
Step 3: Check the domain and sender (10 minutes)
ICANN's tool at lookup.icann.org generally shows the creation date for common domain endings. Redacted owner details mean nothing on their own. Compare the age with the company's claims, then read the sender's address character by character against the website, looking for swapped letters, extra hyphens and different endings.
Step 4: Test contact independently (15 minutes)
Find a phone number from filed documents or a trade association, not from the email. Ask for your contact by name and put a specific product question. Ask for a live video call from the premises, which a small trader can do by phone. For branded goods, email the brand owner through its own site. Reverse image search a few photos, and find the references' contact details yourself.
For the public-source part, our AI Supplier Check looks at registers, complaints and trade memberships and gives linked findings. It never declares a company fraudulent and does not replace your own checks. See how we verify listings.
Step 5: Match the bank account holder to the company (15 minutes)
The account name should match the legal entity on the invoice. Your bank can help:
- UK: Confirmation of Payee checks the account name, including whether it is personal or business, before you pay. Not every account can be reached.
- Euro area: since 9 October 2025, banks must offer free Verification of Payee on standard and instant credit transfers. Non-euro EU countries have until 9 July 2027. On a mismatch, your bank warns you the money may reach an account the payee does not hold.
- US and elsewhere: do not assume anyone checks the name. Ask your bank, and confirm details by phone.
A match shows only that the name is right, because a fraudster can bank in the name of a company they registered. A mismatch can be innocent: a trading name, an invoice finance company. Get the explanation in writing and check that entity in the register.
What each payment method does and does not protect
Consumer protection mostly does not transfer to business buyers. Check your own terms, and ask your bank or an adviser where the sums matter.
| Method | What you can rely on | Gaps |
|---|---|---|
| UK transfer (Faster Payments, CHAPS) | Reimbursement rules for individuals, micro-enterprises and charities: up to £85,000 a claim, excess up to £100, claim within 13 months | Excludes larger companies, international payments, crypto and civil disputes such as undelivered goods from a genuine seller. Gross negligence can defeat a claim |
| Euro transfer | The name check above | A warning, not a refund |
| US wire, business account | Little in statute: Regulation E covers personal, family or household accounts and excludes Fedwire-type wire systems | A recall depends on the receiving bank and remaining funds |
| UK credit card | Section 75 of the Consumer Credit Act can make the issuer jointly liable | Needs an individual borrower, so a limited company's card generally falls outside. Covers a single item priced over £100 up to £30,000, which cheap units may not reach |
| US credit card | Regulation Z's issuance and unauthorized use rules | On a business-purpose card, billing error rules generally do not apply. Read your cardholder agreement |
| Card chargeback | A card scheme process through your issuer, often available where section 75 is not | Not a legal right, with time limits. Ask about business cards |
| PayPal | Purchase protection for eligible goods and services payments; friends and family payments are excluded | Read your country's user agreement, including how bulk or resale purchases are treated |
| Letter of credit | The buyer's bank commits to pay against required documents | Pays on paperwork, not goods. The US International Trade Administration calls it relatively expensive and error-prone, so it suits larger orders |
| Escrow | Funds held until agreed conditions are met, if the agent is genuine | Fake sites exist, and California's regulator warns about parties insisting on a particular online escrow firm. Choose it yourself and check its licence |
| Crypto, gift cards, cash transfer services | Nothing to count on | The FTC names these among the methods scammers demand |
A safer structure for a first order
Pay for samples. Keep the first order small, and release the largest part only after inspection or against shipping documents confirmed with the carrier. A small honest supplier may need money up front on a tiny order, which is fair: pay by card if you can, and only what you could afford to lose. See how to negotiate a minimum order quantity.
Worked example
Round, illustrative numbers, not market prices. You plan to buy 10,000 of stock from a new overseas supplier.
Option A, all up front: 10,000 at risk from the day you pay.
Option B, test first: samples 200, plus 30% deposit on a 2,000 trial order 600, plus inspection 250, plus balance against shipping documents 1,400. Maximum exposure is 2,450, which is 7,550 less than Option A. You order the remaining 8,000 only after the trial arrives in good condition.
The caution costs 450 (samples plus inspection), or 4.5% of the purchase. If the chance of losing the whole 10,000 is above about 1 in 22, the checks pay for themselves. Add these costs to your landed cost and margin.
How samples and inspection protect you, and where they fall short
A sample shows what the supplier can obtain, not what you will receive. Keep one sealed and write into the purchase order: "goods to match approved sample, reference X". Without that line, you have little to point to later.
For a larger overseas order, hire an inspector you found yourself. Agree the checks in writing: quantity, a random draw from finished cartons, labels and the sample comparison. Inspect when production is largely complete, before the balance is paid. Ask for the address visited and compare it with the register. Confirm any certificate with the issuing body, not the PDF you were sent.
The mistakes people actually make
- Treating a register entry as the finish line. Clones rely on you stopping there.
- Calling the number in the suspicious email. You reach the person you are checking.
- Relaxing after one good order. Keep terms tight when order size jumps.
- Clicking through a name mismatch because the supplier said to expect one.
- Assuming a business card carries consumer rights.
- Letting the supplier choose the inspector or escrow agent.
- Treating a thin website as proof of fraud, and losing a good small supplier.
Exactly what to do if money has already gone
Do this today, in order. Do not wait for the supplier's next reply.
- Call your bank's fraud team. Use the number on your card or its website; in the UK, 159 also connects you to many banks. Say "fraud", give the payment reference and ask them to contact the receiving bank. Note the case number.
- Open a dispute if you paid by card or platform, and ask for the deadline.
- Stop all further payments, including fees to release goods or a refund.
- Keep every record: emails with headers, invoices, chats, website screenshots.
- Report it. England, Wales and Northern Ireland: Report Fraud at reportfraud.police.uk or 0300 123 2040. Scotland: Police Scotland on 101. US: the FBI's Internet Crime Complaint Center, which says the FBI can freeze stolen funds in some cases, and the FTC at ReportFraud.ftc.gov. EU: your national police.
- Claim. UK banks should generally decide within five business days, or 35 if they need more information. If unhappy, go to the Financial Ombudsman Service.
- Secure your email: new passwords, multi-factor sign-in, and a check for forwarding rules you did not set. Quietly tell the real supplier, whose mailbox may be the compromised one.
- Ignore recovery offers. The FTC warns that recovery scammers target people who have already lost money and ask for fees up front.
If the company is real and goods are merely late or poor, it may be a civil dispute. Send a written demand with a deadline, and ask a solicitor or attorney about a contract claim.
Frequently asked questions
Is a supplier fake if it is not on a company register?
Not necessarily. Sole traders may not appear, and trading names can hide an entry. Ask for the legal name and number and search again.
Does a valid VAT number prove the company is real?
It shows the number is registered with a tax authority. VIES may not show the name, so it does not tie the number to your contact. The UK check does show name and address.
Can I get my money back from an international bank transfer?
Sometimes, but do not count on it. Your bank can ask the receiving bank to return funds, and success depends on speed and what remains. The UK reimbursement rules exclude international payments.
Should I warn other buyers online about a supplier I suspect?
Report it to your bank, the fraud service and the platform where you found the supplier. Naming a company publicly as a fraud can hurt an innocent clone victim, and you may be wrong.
Your next steps
- Send the email above to the supplier you are closest to paying.
- Run the one-hour check and sort findings into "could not confirm" and "warning sign".
- Ask your bank which name checks and protections apply to you, and save its fraud number.
- Set a written limit on what you pay a new supplier before samples and inspection.
- Make it a rule: no bank detail change without a call to a known number.
- If this supplier does not hold up, return to how to find wholesale suppliers or the directory, where search and profiles with Trust Scores are free. We do not guarantee any supplier and are not a party to any deal, so run these checks there too.