In order to spread awareness around the rise in payments defaults and fraud instances and with the motto 'Jaago-Beware and Be-aware' Mumbai-based Trade Association of Information Technology (TAIT) held a workshop on 'How to avoid frauds'. The event was held on July 10, 2009 in association with DQ Channels and over 100 channel partners participated in this event.

The event was framed to give members an insight into the best practices to be followed in order to avoid frauds that included abstaining from dumping inventory at any cost, sharing references of customers instead of keeping it to themselves and not to entertain partners who indulged in undercutting.

Peers Speak Out
To help partners empathize with these cases, two companies, which were affected in the recent fraud cases involving ABS Infotech and Bhagyalakshmi Computers, were asked to come forth and give a detailed account of how they were duped. Throwing light on the modus operandi adopted by ABS Systems who duped around 16 partners for over Rs 2 crore, Vipul Sangani of Gigahertz said, “ABS Systems had been present in the industry for over 10 years and hence doubting the owner Amit Sheth's intention was out of question. We supplied over 110 units of CPUs and motherboards to them and went out of our way to sell products that we were not focusing on. However, after being duped by them, we have drew a credit limit for everyone and have started getting involved personally in every transaction.”

On the panel: (L-R) Dharmesh Anjaria of Dynacons; Vinita Bhatia, Executive Editor, DQ Channels; Rakesh Jain, Senior Advocate, Mumbai High Court; Yogesh Shah of Mahavir Sys-Power and Ketan Patel of Creative Peripherals and Distributors	Channel partners at the TAIT-DQ Channels event	Rusham Shah of Graham Infotech hosted the session and urged partners to introspect why fraud cases are occuring and share information about a customer if they doubted his credentials

Echoing the same concern as Sangani, Chetan Timbadia of DC Inoftech who too was duped by Bhagyalaxmi Computers in a fraud that amounted to around Rs 65 lakh shared, “Our experience with Bhagyalaxmi taught us that it is important to strengthen your infrastructure around data and be aware of the transactions taking place even in the branch offices. It is extremely important to know your customers and if need be then pin point the amount lying outstanding with a given customer, instead of hesitating due to fear of losing a customer.”

Chetan Timbadia of DC Inoftech who was duped by Bhagyalaxmi Computers has learnt it's important to be aware of the daily transactions even in the branch offices	Vipul Sangani of Gigahertz suggested that a good practice to avoid frauds was to keep the credit limit in check for every customer

A Fruitful Discussion
A panel discussion was also held around business practices that partners need to deploy within their companies to ensure that they do not fall prey to such frauds. Vinita Bhatia, Executive Editor, DQ Channels moderated the event. It also saw the participation of Dharmesh Anjaria of Dynacons, Ketan Patel of Creative Peripherals and Distributors, Yogesh Shah of Mahavir Sys-Power and Rakesh Jain who is a senior advocate in the Mumbai High Court and who gave insights into legal arbitration in such cases.

When questioned on how partners should be aware and avoid frauds, given the huge size of the market, Patel mentioned that it is important to keep in touch with the top 10-15 channel partners on a regular basis as the bulk of the business in the market is transacted through or with them. Anjaria stated that it is important to study the customer. Agreeing with his peers Shah said, “We always try to meet the customer and fix an appointment with him/her before trading. But yes there are times when we do business because of our long-standing relationship with a person, though we might have doubts about him.”

Credit mapping
Yet another issue that was raised revolved around credit mapping. To this Patel suggested that TAIT can take the responsibility by drawing a list of partners and involving an external credit rating agency to garner information around the partner's background and past dealings. Members will then be encouraged to trade only with these accredited companies who have established enough credit worthiness in the market.

Jain underlined the legal procedures to be adopted in the event of fraud. Stating that there should be an arbitration agreement between all the parties involved in a transaction, Jain mentioned that an arbitration agreement can be made in the form of stating that a transaction is 'Subject to legal arbitration of TAIT' in a bill, contract, purchase order, challan or even an email.

The panelists suggested that TAIT look at building a common database and at appointing a credit rating agency in order to avoid instances of fraud.

Bhatia of DQ Channels concluded the discussion by suggesting that TAIT look at holding workshops around developing management and entrepreneurial skills for its members.

Post the event, TAIT is now looking at holding yet another workshop on 'credit insurance'. The event will provide channel partners with tips and ideas about structuring their finances.

Pooja Sharma
poojas@cybermedia.co.in

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