TAIT Propagates 'Best Practices To Avoid Frauds'

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