BusinessBusiness RecoveryInsolvency experts called in at reseller

Insolvency experts called in at reseller

Reseller Addictivity is in the process of going into liquidation after being hit by a credit-card scam, costing it thousands of pounds.

Link: Boost for value added resellers

Alex Faiers, managing director of the Reading-based value-added reseller, which sells NetScreen, Nokia and Trend Micro products, said a bogus customer had been buying equipment with false credit-card details. ‘There was an investigation into the transactions and it turns out they were fraudulent. We have been hit by a bill for about £70,000,’ he said.

Paul Walker, partner at insolvency practitioner Harrison’s, which is dealing with the reseller, confirmed the company was having difficulties following the scam. Walker said shareholder and creditor meetings will be held on 25 November, but he could not comment further.

Eddie Pacey, director of credit services EMEA at Bell Microproducts Europe, said this type of fraud happens all too regularly and is ‘a real headache’ for the channel.

‘The fraudsters know the reseller channel is sometimes not that clued up, so they often go for bigger amounts,’ he said. ‘However, there are simple processes that can limit the risks. If businesses are prepared to accept credit-card transactions without taking more than standard checks, they take a severe risk of being caught short. VARs must have an internal process to ensure staff are aware of each transaction. First-time buys with credit cards should be limited to small amounts.’

However, Faiers warned that his company had checked details such as date of birth and address when the first transaction was made. ‘What we have learned from this is that you have no protection unless you take out some specific insurance against it,’ he said. ‘But I would advise resellers to always carry out checks for every transaction made and take out insurance.’

Nick Morse, managing director of distributor Mindshare, said there are always risks with taking credit-card orders over the telephone. But he added: ‘The banks should be more responsible and help spread the risk. It shouldn’t be left completely up to the reseller.’

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