HomeHome SearchSearch MenuMenu Our productsOur products

Three ways your new creditor could disappear with your money and one smart tip to put a stop to this

by , 24 October 2014
You might think that because a creditor lets you have their goods or service without paying up front, it puts you in a position of power. That's not entirely true.

There are times when creditors could end up disappearing with your money and you don't get what they promised you.

Don't believe me?

Read on to discover three ways your creditor could disappear with your hard earned money. And how you can ensure this never happens to you...


Watch out for the three ways a crooked creditor could pinch company's money

1. Asking for deposits
If your creditor says you must pay a deposit  before it dispatches the goods and then the rest later, watch out. You might pay the deposit and then suddenly discover your creditor is gone with the wind. 
This kind of fraud happens a lot with online services so beware of any online businesses that asks you for deposits.
*********** Recommended Product  ************
Discover how to:
Improve your cash flow and eliminate simple accounting mistakes
Analyse your financial statements and identify errors
Be 100% up-to-date on new and updated accounting and reporting standards
Eliminate fraud in your company…
2. Crooked contracts
If your creditor insists on you signing a contact, be careful. Study that contract thoroughly. If you don't, you could end up in a situation where you sign a contract to say you'll pay, for example, R5 000 for goods. Then when you get them, they're only really worth R2 000 because of thiers poor quality.
3. Money for supplies
If your creditor tells you he needs money for supplies, it's the same as asking for a deposit. He could just take that money and disappear.
Don't give him any money until you receive your goods.
TIP: You can avoid these types of creditor fraud simply by implementing controls. For example, never give a creditor money or sign a contract with them unless you're sure they're a reputable business. 
Ask for company registration documents, check with the governing body and get customer references before interacting with new creditors.  
For more information on creditor controls, check out the Practical Accountancy Loose Leaf Service.

Related articles

Related articles

Watch And Learn

Related Products


Recommended for You 

  Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance

Here are all the most interesting, thought-provoking and common tax questions
asked by our subscribers over the last tax year – everything from A to Z!

To download Quick Tax Solutions for Busy Taxpayers – 35 tax answers at a glance click here now >>>
  Employees always sick? How to stop it today

Make sure you develop a leave policy to regulate sick leave in your company.

BONUS! You'll find an example of the leave policy and procedure in this report.

To download Employees always sick? How to stop it today click here now >>>
  Absenteeism: Little known ways to reduce absenteeism

This FREE e-report will tell you how you can reduce absenteeism in your workplace while avoiding the CCMA and without infringing your employees' labour rights.

To download Absenteeism: Little known ways to reduce absenteeism click here now >>>
  7 Health & safety strategies to save you thousands

Don't let a health and safety incident cost you one more cent. Implement these seven
strategies in your company today.

To download 7 Health & safety strategies to save you thousands click here now >>>