The line of thinking of potential buyers,
who often have no experience in our business whatsoever, is as follows:
with a grant, I can buy a piece of equipment at only 50% of the original
price, so it’s best to buy the most expensive product with highest
hydraulic parameters. The client makes the assessment based on the
technical parameters and the price quoted by the seller.
you know, a number of opportunities have recently come up with respect
to raising funds for equipment purchase in the form of subsidies and
There are a number of fraudulent
practices involving the sale of spraying equipment that we know of,
including the so-called “grant fraud”, also known as “piggyback fraud”.
cases of overly cheap products have been described in another article.
Here, we will put the spotlight on the most sophisticated type of fraud
article was written following a series of incidents. A number of
companies contacted us after buying “overly cheap” or “excessively
expensive” polyurethane foam spraying equipment.
The fraudulent practices described below are real-life cases. We
recommend reading about them before you make any purchasing decision. The buyer will also consider the country of origin to decide
whether the product is worth buying. It is a common belief that a
machine made in Australia, Japan or in Poland is better – even if more
expensive – than a product made in China.
most Europeans buy products made in China on a daily basis, even those
carrying the logos of world-famous brands, they will still subscribe to
the view that Chinese goods are “junk” by default.
course, there is a grain of truth to that, as there are Chinese
products of very poor quality in the market (for more details, see our
article on “Overly cheap Chinese products”). On the other hand, however, there are also products of top-quality brands which are also made in China.
potential buyers, you need to be aware that the grant fraud is meant to
mislead the client as to all parameters of the product.
other fraudulent practices, we encountered the type of a fraud where
the seller would offer products (both online and in store) with fake
nameplates – replacing “Made in China” with “Made in
Australia/Japan/Poland/Germany” etc. The product with a counterfeit
nameplate was then put up for sale in an online store at a price four times higher than its market price.
example, a “Made in Australia” machine was offered for sale at around
EUR 29000, while its purchase price was as low as EUR 5300. In this way,
the client was led to believe that the product was of superior
Of course, the seller would praise the
quality and features of the product to the skies, while in reality it
was a rather poor-quality product made by one of the many manufacturers
Moreover, the attached CE certificate
was also counterfeit – such certificates were issued by companies based
in the Czech Republic or Slovakia (both real and sham businesses, such
as pizza restaurants, grocery stores, and the like). Issuance of a
counterfeit CE certificate constitutes a punishable offence, but you
probably know by now that fraudsters know no limits…
At this point you probably think it’s the end of the story. But you couldn’t be more wrong.
companies would invite buyers over and persuade them to sign a sales
contract (often along with the agreement whereunder the company was to
arrange grant-based funding for the client).
It all sounds
like a great bargain – the client is to pay 50% of the price, and the
remaining amount will be arranged by the counterparty in the form of a
So the client signs a contract for the purchase of
equipment under the condition that the counterparty will arrange a EUR
29000 grant. The client then pays half of that price, i.e. EUR 14500.
company indeed arranges the grant – the client obtains the financing
for the remaining EUR 14500, and the total amount of EUR 29000 is
received by the counterparty.
Within the agreed
time-limit, the company delivers spraying equipment to the client, who
starts working with it… and the machine quickly breaks down and fails to
deliver any value.
The client sends complaints to
the company, but to no avail. Unfortunately, to repair such machines,
you need both technical knowledge and specific spare parts. The client
ultimately realizes that the machine is of very poor quality and should
not cost no more than EUR 5300. In the end, the client decides to return
The seller would then send invoices
for repair services, demanding exorbitant fees (even though the machine
should be covered by a warranty). The client requests a refund of the
price paid… and it is only then that the client comes to the realization
that it fell victim of a fraud which will cost the total of more than
EUR 58000 – all in keeping with the provisions of the grant agreement!
Clients! Any beneficiary of a grant must satisfy the conditions of the
underlying grant agreement – if the client is unable to use the machine
for the intended purpose, it will have to return the funding to the
financing institution, together with contractual penalties.
you purchased the equipment and later returned it to the seller, you
would need to recover EUR 29000 (which, to the best of our knowledge, is
impossible to recover from the fraudsters), and then pay back another
EUR 29000 to the financing institution (with additional contractual
To sum up, you would spend EUR 58000
for a piece of foam spraying equipment which is not working, sold by a
fraudulent company together with all those great stories about the
capacity, flows, experience, Australia, Japan, the USA, Czech Republic,
Poland, and parts of the system made in Germany…
choose wisely. Do not buy over the phone. Visit the seller’s premises
first, see for yourself whether the seller is actually involved in the
manufacturing process, whether it has production machinery and is able
to present client credentials. Otherwise, you run the risk of losing a
lot, if not all…
We do hope that this article will help you steer clear from such business “partners”.
With best regards,
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