CMDA takes steps to prevent frauds

PUNE, INDIA: Computers and Media Dealers Association (CMDA), Pune recently conducted its third annual meeting for distributors. The meeting was attended by 23 regional and national distributors, and the association claimed that it received a very positive response from the participants.

Shital Nahar, President, CMDA and Naresh Lalwani, VP, CMDA represented the association. The meeting was co-ordinated by Ashutosh Karkhanis, with assistance from all committee members and CMDA staff.

Throwing light on the meeting, Nahar said, “Keeping in mind the current market scenario and growing number of frauds, we have taken these steps to safeguard our members' businesses.” At the meet, the works done during previous meetings were revised. This was followed by creating a new agenda.

Post last year's meeting, distributors had been following the practice of not collecting blank cheques, and were requested to continue doing so. Instead, security cheques are now being collected along with a letter, with an agreement in principal not to deposit the same unless in the rarest of circumstances.

It was decided that the practice of informing channel partners before doing any auto reversal for material billed ex-warehouse and not collected would be continued. Also discussed were steps to strengthen the information systems to allow for better flow on information of billing done.

One thing that the channel partners want is to do away with third-party deliveries. During the meeting, it was discussed that third-party deliveries on partner stamp and seal would be done away within a timed manner in the next one to two quarters. In effect, a system would be put in place by all distributors to hand over third-party deliveries to authorized couriers only against their DOCKET / AWB / POD. CMDA will work with its members to make this implementation successful.

Members agreed to work with national distributors to avoid delay/defaults on payment terms. However, it was also discussed to work out a rational rate for finance charges.

A critical point that came up was to evolve a code of conduct for channel partners as well as distributors, on operation of accounts. It was agreed that all distis will exchange and get confirmation on accounts every quarter. Also, no third-party cheques will be accepted for operation and in case of demand drafts, the same would also be accepted only against a formal request letter, from the channel partner.

“We have put forth our expectations to distributors. In view of the difficult times, we have requested distributors not to forcibly stock or over stock with the channel. They must first look at the capacity of the dealer and then pass on more stock,” said Nahar, speaking about how fraud can be prevented. He added that distributors should freeze non-operational accounts and accounts that have been inactive for more than six months.

To ensure that all the points on the agenda are implemented, Karkhanis will be following up with distributors on a regular basis, with the help of Nahar.

On the agenda:

• Blank cheque policy: Continue collecting security cheques instead of blank cheques

• Auto reversal: Continue informing channel partners before doing any auto-reversal for material billed ex-warehouse and not collected

• Third-party deliveries: Need to do away with third party deliveries

• Standardization of finance charges: Members to work towards avoiding delay/defaults on payment terms

• Code of conduct for operation of distributor accounts: All distis to tally dealer accounts every quarter. No third-party cheques will be accepted for operation