DRC cautions against buyer scams

09/11/2009 01:25:00 PM
Tom Karst

Meanwhile, suppliers - whether in Canada, the U.S., or Central and South America - may have four or five loads to move and be tempted to sell to a buyer without conducting a thorough credit check. In one recent case, a supplier in the U.S. sent 20 loads to a crook on credit and was even convinced to prepay the freight to get it to Canada.

"They need to stop and think about what they are doing. That product is going to wind up on the street competing with accounts that are trying to sell their product," Webber said.

International checks can take as much as 30 days to bounce, he said, so suppliers shouldn't assume that their buyer is good just because they have received a payment.

"The shipping community has really got to make sure who they are shipping to is a legitimate receiver and not someone who has just set up shop to order in loads and not ending up paying for them," said Ian MacKenzie, executive vice president of the Ontario Produce Marketing Association, Toronto.

Scam artists can kill the competitiveness of legitimate operators because they sell produce in markets like Toronto and Montreal with the knowledge they will never pay the supplier.

"They know they will never pay full price, or any price at all, for some of these loads, and then he disappears," MacKenzie said.

MacKenzie said that the trade in Canada is asking for more stringent requirements from the Canadian Food Inspection Agency to make it tougher for firms who want to enter the produce business and receive a CFIA license. It has been over three years since the trade has made that request, and MacKenzie said it is unclear how soon regulations might be changed.

In general, he said that it makes sense for suppliers to ship to firms that are members of the DRC, since the DRC does a better job of investigating the backgrounds of the responsible parties.


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