Canadian Trade Commissioner Alert: Six Tips to Avoid Business Scams in Africa

This video presents “The Canadian Trade Commissioner Service”:

  • Find out how the Canadian Trade Commissioner Service can help Canadian organizations
    • Grow internationally
    • Prepare for international markets
    • Assess potential markets
    • Connect with qualified contacts
    • Address unforeseen issues

Canadian Trade Commissioner Alert: Six Tips to Avoid Business Scams in Africa
Canadian Trade Commissioner Alert: Six Tips to Avoid Business Scams in Africa

The Canadian Trade Commissioner Service in the Department of Foreign Affairs and International Trade Canada is warning Canadian companies about scams in Africa:

  • surprisingly, an increasing number of Canadian companies and individuals report that they lost thousands of dollars through business scams across Africa
  • Canadian trade and consular services officials have already received multiple complaints and urgent troubleshooting requests this year from Canadian companies who have been tricked by fraudsters in Africa

Omar Allam, the senior trade commissioner in Accra, Ghana, reports:

  • a rise in Canadian companies getting caught up in scams in Ghana and Togo
  • the scams range from:
    • pleas for donations from fictitious charities
    • to invoices for phoney business registration fees with the names of legitimate government departments or agencies
  •  two types of elaborate frauds:
    • In the first scam, a fraudster pretends to be a government official claiming he can guarantee that a contract will be awarded to a Canadian company
      • In exchange for a fee, the fraudster offers to register the company in Ghana and introduces the Canadians to an attorney, who is usually the same fraudster or an accomplice
      • The Canadian business will end up paying thousands of dollars in various legal, government, bank, document and office fees for a contract that does not exist
    • In the second scam, the fraudsters claim to have gold for sale at a discounted price and persuade the Canadian company to give them banking details and a letter of credit
      • Often the fraudsters will send a small sample size of gold and then, when the company requests another shipment, send them fake gold or nothing at all

Allam provides the following six tips to ensure your company does not get defrauded when doing business in parts of Africa:

  1. Do your due diligence

    • Verify all of the information a business provides and request the company’s licence and the identification card and passport of the company’s registered legal representative and get all documents cross-referenced by the Commercial and Consular sections of the Canadian High Commission
    • Send a person you trust to investigate manufacturing sites and inspect the goods before making any payment

  2. Beware of offers that are too good to be true

    • Know the market price for materials you are planning to buy
    • Contact the Minerals Commission of Ghana
    • Canadian companies can also safely buy precious minerals through the Precious Minerals Marketing Corporation

  3. Be wary when sending money or banking information

    • Scams targeting Canadian companies often begin through unsolicited faxes, letters and emails
    • An obvious sign of fraud is if the company requests that you transfer payment using Western Union
    • Avoid sending financial information to unknown parties by email or through Ghanaian mobile phones
    • The High Commission warns against wiring money to people for goods that have not yet been delivered or services that have not yet been performed

  4. Use strict contractual terms

    • Include a contract that is signed and stamped by all parties
    • Also include the:
      • product name
      • specifications
      • price
      • packaging
      • quantity
      • payment
      • delivery terms
      • and quality standards with testing methods, testing terms, arbitration agreement and penalties

  5. Watch out for trial orders

    • Some scammers will provide you with a good trial and then scam you when you order the full amount

  6. When in doubt, contact the Canadian Trade Commissioner Service

    • Talk to a trade commissioner before entering into a questionable business interaction
    • Ghana has a dedicated team of trade commissioners at the Canadian High Commission that will be led by Senior Trade Commissioner, David Dix
    • The Canadian Commercial Corporation also has:
      • a field office in Accra
      • a specialized Africa team at Export Development Canada based in Ottawa that is committed to helping Canadian companies and investors make the right connections to Ghanaian organizations

Please click here for more info on scams in Africa.

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