Check Who You Do Business With

If you are a short or long term visitor to Phuket, you will discover that there isn’t a shortage of good opportunities for investment, but that there are also an abundance of scams too. Be cautious, take your time, observe, check, observe again – before making commitments.

In a world where sound bites, short tweets, Facebook comments, We-Chat recorded voice instructions and emoticons are gradually permeating our lives both personal and professional at all levels, the basics of doing business can be forgotten. Using short form messages for all communications and business activities is also not advisable because – contrary to the principles of WhatsApp, Line, WeChat and Facebook Messenger – short and sweet is not always good.

Recently in the news there has been a spate of ‘scam’ or, to use the legal term, ‘fraud’-based activities relating to business dealings. One such scam comprised a business person who used a Facebook page to sell fairly inexpensive products to a group of people.

These products were reportedly marketed solely from the Facebook page and using Messenger. Following the build up of ‘trust’ by the purchasers of the products, the same business person then approached the group to ascertain if they would participate in a money lending scheme with attractive too-good-to-be-true terms. Having acquired their trust, the business person collected the monies, didn’t provide the returns, and simply disappeared.

The victims were unable to identify the con artist, as they had all been communicating via Facebook and message systems only. They had not collected specific identification documents or address information on the person, yet they had sent monies – in aggregate a significant amount – to that person.

Many con artists believe that what they do is not morally wrong, if people are greedy enough to make bad decisions…

Many developers who build a successful real estate project should be respected and rewarded for having gone through a difficult set of challenges. Unfortunately, in many packs of apples, there may be a bad apple or two.

Some developers do not set out to scam their owners, but they become over-confident and over-extend themselves; then they may pass on their bad risk management decisions to buyers.
Many developers will set up their marketing on the basis of one completed project, which they will represent as ‘successful’. They may set up multiple similarly branded projects and then persuade buyers that they are ‘on a roll’.

They may even pay a contractor to start some foundation works, or for land clearance and superficial preparations to be made to their land to demonstrate that ‘works are underway’. Many times we have seen this model collapse, and expensive luxury-car-driving developers are suddenly humbled and must give up all control and assets to the bank that amazingly decided to lend them money for speculative sale projects.
This is of course at the worst end of a spectrum in which there are many successes but, nevertheless, this is a reality of the business environment and, wherever possible, must be avoided at all costs.

If you ask different lawyers from different law firms, you may receive similar lists, some longer than others. However, it is worth conducting an inexpensive ‘preliminary’ due diligence on who you are doing business with, before you even spend time, resources and monies on exploring a business investment opportunity, of any nature whatsoever – be it real estate, a joint venture into a potentially profitable food and beverage outlet, a hotel or a travel business.

• Google Results – has the person extensively deleted Google information under the ‘Right to Be Forgotten’. What was forgotten…?
• LinkedIn information – does this match up with other information provided, or are there conflicts? I remember some ex-staff of mine subsequently changing their profiles to represent they ‘managed’ the business I owned, when they were actually only junior employees. LinkedIn has no truth verification process.
• Department of Business Development online check.
• Department of Business Development physical check for more information on corporates.
• Litigation check of individual; corporates to idenfity cases filed in the court. This is a province-by-province check and the records are not necessary ‘national’ or updates as such. Therefore specific checks of the relevant court system are required.
• Asset check – land, shares. It is not possible to ascertain what land a person or company owns simply through a public check.

Some people will conduct a quick Google search of someone, and forget that they might see what the other person wants them to see. Con artistry is as sophisticated as the technology we all use. Therefore, basic checks of information, comparing results and conducting diligent enquiry is an irreplaceable measure of caution that is unlikely to be replaced by any automated process anytime soon.