Insurance bonds, release fees and other upfront fees

In copper, the people who lose the most money are often not the ones who paid for copper. They paid for something around the copper: a bond, a fee, a certificate or a "registration". The cargo never moved.

Here are two real cases from our own network, with names removed.

A buyer paid about $15,000 for an "insurance bond" that the seller's side said was needed before the goods could be released. The bond turned out to be fake, and the cargo was never seen.

Another buyer paid about $5,000 in letter-of-credit transfer fees, plus a performance bond, on a deal that looked properly structured on paper. No copper was delivered.

The common fees

Watch for any request to pay, before inspection, for:

• an insurance bond or "cargo insurance" arranged by the seller
• warehouse release or storage arrears
• export tax or "royalty clearance"
• a certificate: origin, ownership, "clean title", or anti-money-laundering
• registration of the buyer with a ministry or a mine
• transfer or "activation" fees for a bank instrument
• a non-refundable deposit to "hold the allocation"

Why these fees are a warning sign

In a real trade, the seller pays its own export costs and builds them into the price. Insurance is bought by whoever the incoterm says carries the risk, from an insurer they choose themselves. Warehouses invoice their own account holders directly. None of these costs is normally paid by an unknown buyer to the seller's bank account before inspection.

What to do instead

• If a fee is real, ask for the invoice from the company that charges it, and pay that company directly after checking its details independently.
• Never pay a fee into a personal account, a third country, or an account that doesn't match the company on the invoice.
• Ask the seller to deduct the fee from the price and pay it themselves. Real sellers usually agree. Scammers find a reason why they can't.
• Search the names and phone numbers in our scam search, and report anyone who asks you for these fees.

A note on Copper Supply

Copper Supply never holds trade money and never charges fees on behalf of sellers. If someone tells you that you must pay Copper Supply to release a cargo, it is a scam. Report it.