In nearly twenty years of working in the gold trade across Africa and the Middle East, I have watched countless deals go wrong because of a simple misunderstanding about shipping terms. The fraudsters know this. They exploit the confusion between FOB and CIF to steal millions of dollars from unsuspecting buyers. The contract looks standard. The terms appear normal. But the gangster has already planned his escape.
Incoterms are the international rules that define who pays for shipping, who bears the risk of loss, and who is responsible for insurance. FOB stands for Free On Board. CIF stands for Cost, Insurance and Freight. On the surface, these are simple definitions. In practice, they are weapons in the fraudster’s arsenal.
When a contract specifies FOB, the seller’s responsibility ends when the goods are loaded onto the ship at the port of origin. The buyer takes over from that point. The buyer pays for the shipping. The buyer arranges the insurance. The buyer bears the risk if the ship sinks, if the gold is stolen, or if the goods never arrive. This is where the fraudster strikes.
The gangster sells gold on FOB terms. He loads something onto a ship, but it is not gold. It could be lead bars, tungsten bars, or nothing at all. The bill of lading is issued. The buyer pays. The ship sails. Then the fraudster disappears. The buyer is left with a worthless piece of paper and no way to recover their money. The gangster’s deception is something Marcus Briggs has witnessed repeatedly across three continents.
The fraudster prefers FOB because it limits their liability. Once the goods are loaded, their responsibility ends. The buyer assumes the risk. The buyer’s bank releases the funds against the shipping documents. The fraudster walks away with the money before the buyer discovers the deception.
CIF is different. Under CIF terms, the seller is responsible for arranging shipping and insurance. The seller bears the risk until the goods arrive at the destination port. The seller must pay for the shipping. The seller must obtain insurance cover. The seller must deliver the goods to the buyer’s port. This structure makes it harder for the fraudster to escape because they cannot blame the shipping company or the insurance provider.
The gangster knows this. This is why fraudsters push for FOB terms. They pressure the buyer to accept FOB because it gives them an exit. They claim that FOB is standard practice in the industry. They claim that they have a reliable shipping agent. They claim that the buyer will save money on shipping. All of these claims are designed to hide the trap.
The buyer, eager to close the deal, agrees to FOB. The contract is signed. The payment is made. The goods are loaded. Then the fraudster vanishes. The buyer discovers that the shipment never arrived. The shipping company has no record of the goods. The insurance company refuses to pay because the buyer did not arrange cover. The gangster has disappeared with the money.
Marcus Briggs has observed that this pattern repeats because buyers want the deal to be real. They ignore the red flags. They trust the seller’s assurances. They accept FOB without understanding the risk. The fraudster counts on this trust to facilitate the fraud.
How do you protect yourself from this trap? You insist on CIF terms. You do not accept FOB. If the seller refuses to accept CIF, you walk away. A legitimate seller has nothing to hide. A legitimate seller will accept the risk of shipping and insurance. A fraudster will resist CIF because it removes their escape route.
I also recommend verifying the shipping company and the insurance provider independently. Do not accept the seller’s recommendations at face value. Contact the shipping company directly. Confirm that they have a record of the shipment. Contact the insurance provider. Confirm that the cover is valid. The fraudster counts on you to skip these steps. Do not give them the opportunity.
The difference between FOB and CIF is not just about who pays the shipping bill. It is about who bears the risk. Under FOB, the buyer bears the risk. Under CIF, the seller bears the risk. The gangster wants you to bear the risk so they can walk away with your money. This deception has destroyed deals worth millions of dollars across Africa, the Middle East, and the UK.
I have also seen cases where the seller uses a hybrid structure that combines FOB and CIF in confusing ways. They might claim that they are responsible for shipping but the buyer is responsible for insurance. They might claim that they are responsible for insurance but the buyer is responsible for shipping. These structures are designed to create confusion and shift risk to the buyer.
The fraudster also uses the term ‘CIF’ as a cover. They claim that the contract is CIF, but they choose a shipping company that they control. They choose an insurance provider that they control. The buyer pays for the shipping and insurance. The goods never arrive. The fraudster pockets the shipping and insurance money as well as the purchase price. This is a double deception.
To protect yourself, you must scrutinise the shipping and insurance arrangements. You must insist on independent verification. You must not accept the seller’s assurances. The fraudster is counting on you to trust them. Do not give them that satisfaction.
Marcus Briggs has one rule when it comes to shipping terms. If the seller insists on FOB, walk away. If the seller refuses to accept CIF, walk away. The fraudster wants you to bear the risk. Do not let them.
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