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Thu 9 Jul 2009 10:08 AM

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Dubai IT group to get tough on rogue resellers

The Dubai Computer Traders Group (DCTG) last night confirmed plans to launch a credit rating system

Dubai IT group to get tough on rogue resellers
The DCTG wants to ensure greater verification of members to prevent the growing number of fraud cases that have rocked the market

The Dubai Computer Traders Group (DCTG) last night confirmed plans to launch a credit rating system designed to tackle what it calls the “growing incidences of fraud within the IT industry.”More than 150 IT dealers attended the association’s second annual general meeting and heard DCTG chiefs outline their steps for restoring confidence to the Dubai IT community.

The local industry has been decimated by a spate of ‘runaways’ since the turn of the year as troubled traders have taken flight after defaulting on debts.

The DCTG also claims it has seen the highest number of fraud cases for 15 years following an increase in rogue traders who have fled the market after securing credit they had no intention of repaying.

It estimates that more than AED19m (US$5m) has been lost already this year, with frauds amounting to AED14m (US$4m) in the past three weeks alone due to incidents that have led to Jebel Hatta, Syntax, Al Huda and Al Kuwami exiting the market.

As a result of this, the DCTG is introducing a credit rating system and code of ethics aimed at encouraging IT organisations to trade only with channel partners that are members of the group, thereby offering assurances that the financial and trading status of these companies has been properly checked.

It remains to be seen how the system will be implemented, but DCTG said it intends to rate members from A to A+++ depending on the depth of information they provide.

The group says it will carry out an extensive screening process that involves cross-checking a potential member’s credentials, including personal data from their home country and family details. It will only approve membership after all the information is proved to be credible.

“The credit ratings system is a step in the right direction,” insisted Shailendra Rughwani, president of the DCTG. “It will help our members, distributors, vendors and international suppliers identify the most credible partners to do business with and safeguard their organisations against fraud. With this system in place, members will be careful about making sure that their reputation remains intact in the market.”

Although the DCTG initially plans to manage the credit ratings system itself, it remains in contact with organisations that specialise in credit information and management services. Representatives from both Euler Hermes and Emcredit were in attendance at the AGM last night.

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