TRADERS WHO DEFAULT

Hokitika Guardian, 20 March 1926, Page 4

TRADERS WHO DEFAULT

NEARLY HALF OF THEM FOREIGNERS.

LONDON, January 25. Already the names and details of no fewer than 800 undesirable traders have been notified to tho new Credit Exchange Department of the Federation of British Industries by reputable firms connected with the federation.

The department has been only IT weeks in existence. Afore than 1,500 firms arc now participating in the Credit Exchange scheme, which aims at the protection of reputable member linns by giving them early information and automatic warning of undesirable traders wlio aro consistently and wilfully slow in payments, or who by means of deceptions, fraudulent bankruptcies, and other practices seek to dupe firms out of goods and cash. It has been discovered that at least •JO per cent, of the undesirable traders are foreign defaulters coming from more than 10 different countries throughout the world. The following are typical types of fi;nud now being practised on industry:

Hidden Assets. —A man declares he is unable to pay. He has nothing on which to levy distraint. He has previously made over his assets to his wife or to some near relative. This is tin* commonest type of fraud. The federation has already had one instance of a man who played this iric-k with four separte trades within six weeks.

Lung-firm Frauds.—This well-known method of obtaining goods, selling them to sources that cannot lie traced, and then decamping is the next commonest type of fraud. Fnder the fed-

eration’s scheme as information comes from every trade the various aliases used hv the fraudulent trader rapidly become known, with the result that' eventually all his sources of supply are cut off.

Refusal to Accept Delivery.—This is a common typo of foreign fraud and consists in a buyer ordering goods, getting them sent to a foreign market, and then refusing to accept them, afterwards buying them in at “knockdown ” prices at public auction. Obtaining Samples and Selling Them. —This fraud consists of obtaining a

large range of expensive samples from firms and selling them without any

attempt to obtain orders. Default on Large Orders.—A common trick is for a firm to put through two or three small orders for which payment is made promptly, then order a huge' quantity and then default or

decamp. Doubling Orders.—A very widespread type of fraud is that in which an agent on commission doubles tho orders from a. client. He receives a commission on the total order, but if when the goods are delivered he finds he is unable to sell the extra quantity he ordered on his own account lie repudiates the transaction and defaults.

Since the scheme Jins been in operation the members of the federation have boon saved many thousands ol pounds by being warnwd in advance against. Ihe undesirable trailers.