Investigating your Debtor in Mexico, 2014 CreditScape, Western Region Credit Conference Seminar...
-
Upload
credit-management-association -
Category
Business
-
view
185 -
download
1
description
Transcript of Investigating your Debtor in Mexico, 2014 CreditScape, Western Region Credit Conference Seminar...
10/20/2014
1
Investigating Your Debtor in MexicoKey lessons from fraud and debt collection
cases for better screening of debtors
Romelio Hernandez
CreditScape Conference 2014October 16, 2014 Palms ‐ Las Vegas
Fraud case 1
1. Our introduction to fraud
2. Customer a trusted businessmen
3. 8+ years doing business
10/20/2014
3
Our program
1. Credit application information
2. Free tools for investigation
3. More reliable resources
4. Checklist for due diligence
Resources will be useful for:
1. Evaluating prospect customers
2. Evaluating debtors for litigation
10/20/2014
4
Two types of debtors
1. Average Businessman
2. Professional Con‐Artist
Fraud is a product of both:
1. Personality
2. Situational variables
10/20/2014
5
Duffield, Grace et al. “The psychology of fraud.” Trends & issues in crime and criminal justice. March 2001: 1‐6.
“There are situational conditions that would
discourage all but the most incorrigible people from committing fraud.”
Duffield, Grace et al. “The psychology of fraud.” Trends & issues in crime and criminal justice. March 2001: 1‐6.
“Conversely, there are situations that encourage fraud to the point that even
the average person is at risk of engaging in it.”
10/20/2014
6
Association of Certified Fraud Examiners
Fraud Triangle
Perceived Needs (Incentives/Pressure)
Fraud case 2
1. Owner of several companies
2. Apparent strong brand presence
3. Strong purchasing capacity
10/20/2014
8
1. General info about prospect
2. Financial info
i. Business and banking references
ii. Financial information
iii. Credit bureau report
3. Terms of sale and security
Credit application: what to include?
• Webinar
• Tuesday, Oct 21, 2014
• 9:00 AM ‐ 10:00 AM PDT
• https://attendee.gotowebinar.com/register/105056497405499137
The Legal, Credit & Collection Environments in Brazil and Mexico
10/20/2014
9
1. Does prospect currently has lawsuits?
2. Are there other companies doing business in the same address?
3. Is prospect part of a corporate group? (ask for name of related companies)
4. Name of customs broker in Mexico
5. Years in business and brand presence
“Specific information” about prospect
• Report from Mexican Credit Bureau
• http://www.burodecredito.com.mx/
• Available only to credit info suppliers
• Debtors get 2 free reports per year
In support of credit application
10/20/2014
10
https://wbc2.burodecredito.com.mx:8474/rceonline‐pm/
https://wbc2.burodecredito.com.mx:8474/rceonline‐pm/
10/20/2014
12
Fraud case 3
1. Strong purchasing capacity
2. Good reference from competitor
3. Partially covered by credit insurance
10/20/2014
13
Initial basic information
• Search company status at SIEM:
– http://www.siem.gob.mx/siem/portal/consultas/ligas.asp?Tem=1
• Physical inspection: detecting red flags
• Public contracts at COMPRANET
• Importers’ registry at Customs (SOIA)
Physical inspection
• Verification of company’s situation
– As represented in credit application
– Other indicators (employees, inventory, facility size, neighborhood, etc.)
• Conducted by local sales rep or source
• Obtain written report for your file
10/20/2014
14
Database of Government Suppliers andCOMPRANET
– http://www.compranet.gob.mx
– http://cnet.funcionpublica.gob.mx/servicios/consultaRUPC.jsf
– https://sites.google.com/site/cnetrupc/Guias‐y‐Formatos/RUPC.xlsx?attredirects=0
10/20/2014
18
Excellent resources for free
• Investigation through the RUG (registry for security over movable assets)
• Investigation through the IMPI website(Mexican Institute of Industrial Property)
10/20/2014
19
Secured TransactionsFeatures
1. Electronic
2. Free
3. Immediate results
www.rug.gob.mx
10/20/2014
21
Most reliable services
• Nationwide lawsuitsinvestigation
• Full investigation at local public registry
10/20/2014
22
Public registry of property/commerce
• Corporate information
– Mandatory publication of financials
• Assets and loans
• Liens, seizures, attachments
• Bankruptcy, liquidation process
Registry issues to consider
• Cost
• Time
• “Intangibles”
• SIGER online system in future
10/20/2014
23
Fraud case 4
1. Strong financials statements
2. Audited financials
3. Huge business potential
Audited financial statements
• Which companies are obligated?
– Voluntary audits
• How to spot accuracy or reliability?
– Validation at SAT
– Registration and reputation of CPA
10/20/2014
24
Due Diligence Checklist
Credit Application
Review credit app to include specific info for red flags
Request credit report in support of application
Confirm reliability of financial statements
Assign risk level of customer based on jurisdiction
Essential task
Request company verification from sales representative
Optional online searches
Conduct preliminary search at SIEM
Conduct additional online searches at COMPRANET
Conduct additional online searches at CUSTOMS (SOIA)
Conduct online search at RUG
Conduct online search at IMPI
Essential investigations
Conduct lawsuits investigation
Full investigation at local public registry
CONCLUSIONS
1. We should treat all prospects as a potential risk of fraud.
2. With the right tools and resources, we can and should do our due diligenceeffectively, efficiently, and thoroughly.
3. Do this and you will avoid ending up as a case‐study in Romelio’s presentation.
10/20/2014
25
For additional information please visit us at
www.hmhlegal.com
THANK YOU!
For copies of slides or webinar registration contact me at: