Chapter 09
Fraud & Red Flags: the Scam Playbook
More than commercial risk, fraud is the defining hazard of remote copper sourcing. The scams are patterned and, once you know the pattern, largely avoidable. Industry veterans are blunt: a large share of unsolicited “copper cathode” offers circulating online are simply not real.
Ten red flags that should stop you cold
Upfront fees of any kind before a proforma, inspection or bank instrument.
Deals routed outside licensed government channels, or a ‘licensed exporter’ who can’t be verified with the regulator.
Prices at a suspicious discount to LME. Real material trades around LME plus a delivered premium.
Physically impossible product specs, or ‘copper sold in ports’.
Communication only via WhatsApp and personal email — never official bank or corporate channels.
Pressure and urgency — ‘another buyer is waiting’ — to short-circuit due diligence.
Insistence on secrecy and unnecessary NDAs before any substance is shared.
SBLC / MT760 ‘trading’, ‘leasing’ or ‘monetisation’ offers — these are not investments.
Fake or unverifiable inspection, insurance or certificates (the 2020 ‘painted rocks’ fraud cost a major trader tens of millions).
Excessive layers of ‘mandates’, ‘facilitators’ and ‘consultants’ between you and anyone who touches real metal.
1. Can I verify the seller’s export licence directly with the regulator?
2. Can an independent inspector (SGS / Bureau Veritas) physically confirm the metal before I pay?
3. Will my bank release funds only against compliant documents?
If any answer is ‘no’, walk away. A genuine counterparty welcomes all three.