Merchant credit interest scam alert in the grain industry

Bored housewife

This is a post to alert grain farmers out there to be aware of a particular scam in the grain industry. Like a lot of farmers you may have bought inputs on credit and been charged interest at a compound rate from day one of purchase. Then you delivered your grain to the merchant and the merchant delays the credit for the value of your grain to your rolling account with the merchant. In other words the merchant omitted to credit your account and obtained an advantage and gain to itself by charging you sums of interest at a compound rate on your account.

You may have been spun a cock and bull story about the prices not being set until after the harvest, and that you will be given an extra top up on your grain sales price. This is the trick to con you into thinking you are getting the best deal and price for your corn. In the meantime the merchant is charging you interest on your sprays, fertilizers, seed inputs etc which you bought on credit at puffed up prices.. Known as "padding " in the industry.

The merchant may try and cajole you and pretend to be your friend, ask you about your family and sweet talk you to con you unto thinking you are getting the best price for your harvest and the best discounts on your inputs. Beware!

The deliberate withholding if the value of your grain sale payment in the account has caused you a loss in the form of merchant credit charges, there is also interest being charged on interest at a compound rate because of the omission of the grain sale entry. This is a form of theft, a white collar crime. It is false accounting contrary to S.10 of the Criminal Justice (Theft and Fraud) Offences Act, 2001.

Some merchants are charging significant sums of interest this year because the harvest price has been bad for the supplier. Part of the con is to create a deficit on your account and let it roll on so as to get your single farm payment or your land or stock. Look at the High Court list, with the summary judgment procedure all the merchant has to do is produce an account balance on affidavit and it gets judgment against the farmer.

Another part of the con is to withhold paperwork from you so that you cannot dispute an account by getting your accountant to check it. And another trick is to obtain an "acknowledgment" of the falsified debt by shoving a calculation in front of you and demanding that you sign it or you will be brought to Court.

If this has happened to you or is happening now, make a complaint to the Garda Bureau of Fraud Investigation and get this type of industry behaviour stopped!

Reggie.

Bored housewife wrote: »

This is a post to alert grain farmers out there to be aware of a particular scam in the grain industry. Like a lot of farmers you may have bought inputs on credit and been charged interest at a compound rate from day one of purchase. Then you delivered your grain to the merchant and the merchant delays the credit for the value of your grain to your rolling account with the merchant. In other words the merchant omitted to credit your account and obtained an advantage and gain to itself by charging you sums of interest at a compound rate on your account.

You may have been spun a cock and bull story about the prices not being set until after the harvest, and that you will be given an extra top up on your grain sales price. This is the trick to con you into thinking you are getting the best deal and price for your corn. In the meantime the merchant is charging you interest on your sprays, fertilizers, seed inputs etc which you bought on credit at puffed up prices.. Known as "padding " in the industry.

The merchant may try and cajole you and pretend to be your friend, ask you about your family and sweet talk you to con you unto thinking you are getting the best price for your harvest and the best discounts on your inputs. Beware!

The deliberate withholding if the value of your grain sale payment in the account has caused you a loss in the form of merchant credit charges, there is also interest being charged on interest at a compound rate because of the omission of the grain sale entry. This is a form of theft, a white collar crime. It is false accounting contrary to S.10 of the Criminal Justice (Theft and Fraud) Offences Act, 2001.

Some merchants are charging significant sums of interest this year because the harvest price has been bad for the supplier. Part of the con is to create a deficit on your account and let it roll on so as to get your single farm payment or your land or stock. Look at the High Court list, with the summary judgment procedure all the merchant has to do is produce an account balance on affidavit and it gets judgment against the farmer.

Another part of the con is to withhold paperwork from you so that you cannot dispute an account by getting your accountant to check it. And another trick is to obtain an "acknowledgment" of the falsified debt by shoving a calculation in front of you and demanding that you sign it or you will be brought to Court.

If this has happened to you or is happening now, make a complaint to the Garda Bureau of Fraud Investigation and get this type of industry behaviour stopped!

Not a grain farmer but fair play to you all the same OP

Feckthis

This is happening.
They make money on the product you buy.
Then you get charged interest every month on that product.
And if bill is over a certain threshold, you get charged again.

diesel druggie

Wouldn't they erase the intrrest payments when it comes to settling up the account that's the minimum I'd looking for in discount off anything that I buy

Bored housewife

diesel druggie wrote: »

Wouldn't they erase the intrrest payments when it comes to settling up the account that's the minimum I'd looking for in discount off anything that I buy

You missed the point . The merchant should not be withholding the farmer's grain payment in the first place. By deliberately withholding payment the payment and charging interest on purchases after the grain has been delivered this has had the effect of increasing a deficit on the account the farmer holds with the merchant. This gives the merchant the upper hand and it is in a superior bargaining position in terms of the pricing of corn delivered if no price was set before delivery.

There are two ways compound interest is being charged, on the invoice from day 1 of purchase and on monthly statement balances.If the merchant sends you out a monthly statement lets say in august, sept or October not showing you the value and credit for your grain sale to the merchant on this piece of paper. Then let's say you have been charged interest on your purchases. Remember there is interest being charged on the interest as it is compound interest being charged not simple interest. You have been deceived and this is on the face of it a false accounting document. The trick is that the merchant tells you it will settle you up after the harvest and may trick you into thinking you are getting a better price for your grain by giving you "extras" on grain price after harvest.

When it comes to discounts and interest charged, the con is that you think you getting a great price from the merchant for inputs ... You may think "sure isn't the merchant looking after me on price... I'm a special customer" , don't forget you may not have been given a clear price for inputs in the first place and have been spun the line that you "will be looked after after the harvest" . BEWARE! you were charged a puffed up price on credit purchases with interest being charged from day 1. E. g. You may have bought your fertilizer in March, you may think the merchant is giving you a discount on the price you paid at a padded/puffed up price. But in the meantime there was compound interest charged on the puffed up input price from day 1 and the merchant pockets this as well. You may not notice that he hasn't given you the interest back on puffed up input invoices, you may get some interest knocked off the monthly account balance. That is another part of the con. He may knock off some of the interest on the monthly account balance statement but has still caused you a loss by pocketing the credit interest charge on puffed up invoices and the interest that was then charged on that interest. Complicated? That's the idea so you don't notice that you have been tricked.. Conned...

So there you have it, there is interest being charged when the merchant has no right to do so when your grain has been delivered. Then the merchant pockets the compound interest charged on the inputs from day 1 on puffed up invoices prices. And finally, you must remember there was compound interest being charged on the monthly statement balance on the non discounted price on the inputs and that this compound interest applied for a number of months, interest was charged on interest and the merchant pockets the interest on interest.

So the merchant has had your corn now for a while and hasn't paid you for it, you have to in to him to get paid to get your money out of him. He has charged you compound interest after your grain has been delivered, he may give you a discount on puffed up purchase prices on which compound interest has been charged. A farmer isnt exactly in a good bargaining position is he?

Meanwhile... The merchant has made a profit on your corn that hasn't been paid for for a number of months because of deliberate withholding of crediting the sale, it has charged you interest charges well in excess of financial institution rates on your puffed up invoice purchases and interest on interest, plus the interest on discounted invoices on the full price has been pocketed and the merchant has also received interest free credit on its purchases of between 60-90 days. Where's the farmers profit?

This type of credit arrangement is not regulated unlike a mortgage or credit card arrangement where the Financial Regulator watches over the banks. A bank would not be allowed delay your credit on the day you paid it to the bank and charge you interest and interest on interest on the outstanding balance. Why should a grain merchant be allowed deliberately withhold the payment of your grain and charge you interest? This is financial fraud. What is the IFA doing about this? They made sure milk suppliers paid the farmers for their milk when delivered what are they doing for grain farmers? It would be interesting on this forum to see how many grain suppliers this is happening to.

Brown Podzol

Easily fixed. Short term loan/stocking loan for inputs and invoice merchant as you deliver the grain charging intrest monthly.

Bored housewife

Brown Podzol wrote: »

Easily fixed. Short term loan/stocking loan for inputs and invoice merchant as you deliver the grain charging intrest monthly.

It's not so simple. The reality is that many farmers have been unable to access loan facilities from banks because the banks weren't lending and they have been relying on merchants providing them with crop inputs on credit and this credit facility is completely unregulated and open to abuse by unscrupulous individuals.

It is not possible for a grain farmer to simply invoice a merchant for his grain sale as the price is determined by quality parameters such as moisture, bushel weight, screenings, market price, volumes traded etc all of which are determined by the merchant after delivery. The merchant has the upper hand in terms of the pricing and issues what are known as settlement vouchers. He has the farmers grain which is a perishable product and abuses of dominant position are happening on the ground. Bumping up deficits on accounts by under valuing the grain remittances and delaying the credits while continuing to charge interest to the farmer on his purchases appears to be a practise employed by some merchants to screw the farmer.

Some merchants are meticulous in properly crediting remittances when received, but there are a few merchants out there who are not so honest.