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Credit Where it’s Due

New companies can slip through standard credit reporting mechanisms. Vigilance requires a more robust approach, says Mike Collins.

Being in credit management never ceases to amaze. A new collection challenge or scam is but one phone call away.

Two months ago I had not heard of Merchandise Specialists Limited of 75 Shelton Street, Covent Garden, London, WC2H 9JG (Registered Number 10171356). The names of the sole appointed director Adam White or former director Alison Parkes also meant nothing.

Indeed, why would I or anybody else ever have heard of these parties? The company itself was only formed on 10 May 2016 and the directors don’t appear to have previous appointments – that is, if the named directors actually do exist.

So why has the above company and named directors come to prominence for promotional goods suppliers?

In short, Merchandise Specialists Limited seemingly set up to scam the industry. It began by brazenly plagiarising, almost verbatim, a leading distributor’s website and in doing so sought to pass itself off as an established, reputable and major distributor. It almost beggars belief that they thought they might get away with it.

In reality though it was only the hawk-like diligence of a leading supplier’s accounting resource, which must surely be applauded for raising the alarm so quickly, that stopped Merchandise Specialists Limited in their tracks. Quite where this might have ended without such speedy action is anybody’s guess.

Without labouring the point let’s just say that Merchandise Specialists is most definitely an additional brand the industry can do without. Feel free to do your own website comparison as, at the time of writing, it is still live.

So where are we going with this and what’s the relevance to credit reporting?

Robust flexible credit management is paramount in today’s ever changing world. Getting your systems right is crucial, and if you don’t, then be prepared to pay for it at some stage.

Unfortunately, the sales focused promotional goods industry continues to be all too slow to embrace many important financial safety resources available, often relying on inadequate outdated credit reports alone to make signifi cant decisions. If this is you, then consider the following.

Almost every credit reporting provider out there would and does, as standard practice, award new companies such as Merchandise Specialists Limited a goodwill start-up credit limit of £500 to £1,000. It is a somewhat questionable policy, particularly when we factor in the nature of this particular scam.

Such perceived irresponsibility from credit reporting companies is not helpful, but who really is the most irresponsible party? Those that produce reports and sell data or those that make significant credit decisions based on credit reports alone? You get out what you put in and extra effort and diligence in credit management is ultimately rewarded in reduced losses or even the utopia of a zero write-off.

A complimentary Credit Management Health Check and Review is a free BPMA benefit. Have you received yours? Ring 01274 223190 to activate.

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