3 Common Red Flags

In the world of physical commodities, speed and trust are everything. But behind the polished emails and stamped documents, scammers often hide in plain sight. Recognising the early warning signs can save you from wasted time, lost money, and reputational damage. Here are three of the most common red flags, and how to protect yourself against them.

1. Unrealistic Pricing

How it works:
Scammers lure brokers and buyers with “too good to be true” pricing, offering products well below the market rate. They rely on greed and urgency to bypass rational decision-making. Often, they’ll justify it with excuses like “direct refinery allocation” or “special government quota.”

Tips to avoid it:

  • Always compare the offer with current global benchmarks.

  • Verify supplier credibility before focusing on the price.

  • Remember: if it’s drastically cheaper than the market, there’s a reason, and it’s rarely good.

2. Overloaded Documentation

How it works:
Fraudsters often send long chains of PDFs, ICPOs, LOIs, POPs, and contracts, within the first conversation. This tactic is designed to overwhelm you with “proof” and make their offer look more legitimate. In reality, much of this documentation is recycled, falsified, or outright meaningless.

Tips to avoid it:

  • Be wary if a seller sends a flood of documents without basic introductions or company details.

  • Focus on verifying the company, not the paperwork.

  • A genuine supplier will prioritise discussions, not drown you in files.

3. Pressure to Act Quickly

How it works:
Scammers create artificial urgency: “This allocation expires today” or “We need your ICPO in the next hour.” They use fear of missing out to push you into skipping due diligence. By the time you realise, your time, money, or credibility is already compromised.

Tips to avoid it:

  • Never rush into sending sensitive documents or payments.

  • A legitimate counterparty will allow reasonable time for checks.

  • If you feel pushed, step back—urgency is a classic red flag.

Red flags are rarely hidden, they stand out if you know what to look for. By staying calm, asking the right questions, and verifying details before moving forward, you’ll save yourself from wasted effort and protect your reputation in the industry.

Red Flags Ai Ltd