“BLACKLISTED.”

Thames Star, Volume LIX, Issue 16798, 28 May 1926, Page 6

“BLACKLISTED.”

NEW SAFEGUARD FOR BRITISH TRADERS. British, industry lias organised & “Scotland Yard’’ of its own. Over 1500 firms in England have come into the organisation arranged by the Federation of British Industries for the widest possible exchange of “credit information.” The scheme has been in ooeration now for 15 weeks. During that period almost 1000 “undesirable traders” have ben identified and the information circulated over the country. The difference between the scheme arranged by the F. 8.1. and the usiia'organisation of this kind is that instead of members having to write to headquarters for information concerning an individual, all information is first collated at the F. 8.1. office in London and distributed automatically to all members. A Morning Post representative recently obtained details of the most common types of fraud practised on British business men. From the numbers of cases reported to headquarters, it is obvious that the favourite trick is that of the “hidden assets.” Tho defrauder makes his purchases—and then declares he is unable to pay, having previously made over his assets to his wife or a relative. Within the past six weeks one individual has worked this ruse on firms in four separate trades. With the details in their possession the officials are able either to make the defaulter pay or prosecute him. The next most popular system is that known as “long firm frauds.” By this method the purchaser obtains goods on credit, sells them to sources which cannot be traced —and decamps with the cash. But the F. 8.1. organisation. with its daily reports from every trade, is soon aware of the assumed names of the trickster, and is able to stop further deception of the firms who are participating in the Federation’s scheme. Third on the list of these commercial frauds is that of the “refusal to accept delivery.” Tl;e buyer orders a consignment to be forwarded to a foreign market. He then refuses to accept them because of some alleged technical defect, and proceeds to- buy them in at “knock-down prices” at the subsequent public auction. Another method in common use, both

in England and abroad, is that of obtaining a large- range of expensive samples from different firms and then retailing the goods without making any effort to obtain orders. ' Fifth in order of popular methods of fraud among the commercial erodes is the old “confidence trick.” A man puts through a few small orders, and promptlv meets his obligations. Alien he indents for a large order. He gees the goods, disposes ot them without delay? and leaves with the proceeds tot unknown parts. The sixtli method is neat. A wellspoken Englishman, representing a foreign company, and accompanied by a foreign director, will visit a firm and will recommend their latest product, say, sheet metal. “You will like tins, Mr. —lie says. “Just try a sample, and then give us an order.” The buyer sometimes agrees, and is asked to initial the form placed before him. which invariably is in a foreign | language. Later he discovers that he lias actually ordered about £IOO worth of the commodity. The practice of questioning the qualitv of the goods ordered is another method which"'the F. 8.1. scheme is checking. In one ease detected by the Federation a purchaser delayed payment for two years, and then challenged the accounts on the allegation, 1 which be then made for the first time, that the quality was unsatisfactory. The eighth method is that of the dishonest commission agent. The agent doubles an order received from a client, and receives his commission on the total order. When the goods are sent, the agent delivers half to the client and repudiates responsibility for the rest. The scheme is quickly weeding out these merchants from business.

A protection scheme of this kind had to come. Frauds on industry of late years had grown to proportions which, with widening suspicions, were challenging the integrity and credit of every honest trader.