In Tamil, there is a saying that as long as there is one to get cheated, there will be people who continue to take them for a ride. These days, I am hearing lot of incidents of people being taken for a ride. Earlier, we used to get such incidents from poor countries of the world whereas now cheaters are from rich countries as well. I am yet to understand this pattern but things are on the rise. In this post, I am examining the issue and what to do in case one is defrauded!
In the next post, I will discuss ways and means to prevent them.
There are two types of frauds one pertains to taking the money and vanishing from the scene and the other taking the money but supplying substandard material or valueless material and absconding. This scenario pertains to imports, there must be such occurrences in exports too. In one instance, the importer paid 100% advance for the import of copper material, but what he got was aluminum scrap and in the second instance the party paid for the import of copper wire scrap but the seller absconded at the other end. In such cases, there is not only loss of money but also regulatory compliance to be kept mind. The Reserve Bank of India (RBI) stipulates that for the foreign exchange sent abroad, there must be submission of Bills of Entry in clear endorsement that material intended and paid for has indeed been received! The Bill of entry has to be submitted to the banker through whom the payment was sent within a period of 9 months.
So, the defrauded are in double whammy! They will have to find ways and means to get the money back (if it is possible) and communicate to RBI of what has happened so that they do not get placed in the caution list.
If the amount is substantial, then there is merit in going after the cheaters in their own turf and try retrieve the money. On the contrary if the amount is not substantial then the cost of retrieval is more than the amount lost.
In any case, the affected parties have to make proper actions to prove that they are genuinely affected and taking steps to retrieve the money. The Director General of Foreign Trade (DGFT) in terms of chapter 8 of its Foreign Trade Policy (FTP) lays down a procedure for preferring a complaint. The complaint can be by both Indians as well as foreign nationals. In the latter case, it is for cheating by Indians. Of course, even this measure by the DGFT is no guarantee that the lost money can be retrieved back!