| Vendor fraud can be humorous
when it happens to someone else. Everyone has a good laugh when the Army pays $700 for a
toilet seat or $1400 for a wrench. But when you find out a vendor has been ripping you
off, it’s not quite so amusing. Unscrupulous vendors are a fact of
life. For every good and honest vendor out there, there is probably another who is looking
to fleece you for the most that they can. They prey on companies that keep a loose reign
on their vendors or take advantage of bureaucracies where one hand doesn’t know what
the other is doing. They will always be out there, so it’s up to you to take the
measures necessary to protect your company.
An Open Door Into Your Business
In today’s economy, companies are interdependent. Few and far between are the
companies that can produce a product or service without the help of parts suppliers,
equipment suppliers, consultants and other vendors. While these relationships provide the
opportunity to grow |
your business, they also give
vendors the means to take advantage of you. Consider the following examples: *
The computer retailer who claimed thousands of dollars in rebates from the
manufacturer for computers it never sold.
* The software manufacturer who inflated the performance of its product to
generate sales to clients.
* The contractors who defrauded millions of dollars out of a local school
district by overcharging for construction work and billing in such a way that that costs
could not be traced to an individual project.
Much as you would review the background of a prospective employee before you
would hire them, you should also check out the background of potential vendors. You are
not being nosey, you are entitled to find out with whom you are entering a business
relationship. Otherwise, you may discover this information the hard way somewhere down the
road.
Are They For Real?
The first step is to make sure that you are dealing with a legitimate business. There
are many shell corporations out there whose sole reason |
for existence is to find ways to rip you
off. They work their scam, disappear quickly and then resurrect themselves under a new
name. Verify the business name, address and Employer Identification Number (EIN). Check
with the local Chamber of Commerce, Better Business Bureau or Consumer Affairs department
to see if they have heard of the company and if there have been any complaints. |
Skeletons In The Closet Your next step is to review the background of the firm and its owners. Ensure
they have the capability to handle the job you will give them. Check the credit history of
the company and its principals to see if there has been any bankruptcies or other credit
problems. Do a thorough criminal check to see if any of the owners have ever been
convicted of a crime. Get previous customers and references
(Continued on page 8) |
| Michael Kessler & Associates on the
subject of Counterfeiting. Michael Kessler has been recently interviewed for upcoming
articles in Forbes Magazine, the Robb Report and the National Enquirer. New
additions to the staff:
Judith A. Habert, author of a recently released book on success in sales, joined
the professional staff as a marketing and communication specialist.
Shannon Jaczynski joins the staff from Ford Motor Company in Dearborn, Michigan,
where she served as a research analyst.
|
Michael G. Kessler & Associates,
Ltd., were exhibitors at the Annual Convention of the American Society of Industrial
Security (ASIS), in Dallas, Texas on September 14-17, 1998. Michael Kessler hosted an
informative press conference with discussions focused on crimes of the Internet, and
methods to protect companies in cyberspace.
Kessler & Associates will be in attendance at the Legal Tech Show in New
York City, at the New York Hilton on January 25-27, 1999. Stop by and let us show you how
we can provide solutions to some of your most difficult corporate dilemmas. |
