A few days ago a statement from a mask manufacturer was circulating in China. In the statement the company was telling customers to STOP paying them without a valid contract, and “if you pay us again after we have refunded you, we will report you to the police!”

in the beginning we thought that was another prank. Anyway internet-sphere in China was full of jokes and pranks. However, a few industry veterans we checked with told us that it was genuine – and there is some bigger plot behind it.

Here is the statement:

“Dear customers, 

Because of the global covid-19 outbreak, price for raw materials of our masks has been rising by hundreds of times. The orders we have accepted have exceed our production capacity by at least two months. As a result, we have stopped taking new orders on 1st of April. We are also refunding some existing customers for orders we are not able to fulfil. 

However, we recently realised that certain customers have been transferring money to us without our knowledge. This has caused quite a bit of trouble to our finance. Therefore we are making the following statement:

Any payment to us without a valid contract is invalid. If you transfer again after our refund, we will report to the market regulators, or to the police.”

What exactly was happening? Well, a simple interpretation is that certain customers, worried that they might not get the order, are forcing the payment through in hope that the company will accept their orders.

However, a much more sinister motive might be behind:

In the market, there are scammer pretending to be representatives of the reputable factories. Since supplies are in short supply, they tell anxious customers that they can broker deals, in return for a fee.

If customers are worried whether the offer is genuine, they reassure customers by saying the contract will be with the factory itself, and they can pay the factory directly.

However, the commission has to be paid separately, in cash or bank transfer, as factories can’t pay the brokers commission.

Therefore, they produce a fake contract with fabricated factory seals. The bank account of the factory is genuine though – so the transfer could go through.

When the factory realises that there is an unsolicited payment coming in, they will refund.

However, what the customer already paid as brokerage fee to a separate account is gone forever.

Sometimes, you really admire the ingenuity of the scammers.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].