By Fruit and Vegetable Dispute Resolution Corporation

We talk about due diligence every day here in the office. At the Fruit and Vegetable Dispute Resolution Corporation(DRC), we emphasize the importance of thorough investigation in your business dealings. It's not enough to assume you know your customers; a DRC membership and careful investigation can help you avoid unnecessary risks and expenses. This diligence is key to responsible business practices.

First, if you deal with customers in North America, check to see if they are DRC members. If you don’t know the answer to this question, take notice of the red flag waving in the air. You play a crucial role in this process. We recommend you visit our website to find out if they are members. If you cannot find them on our member list, contact our office, and we will help.

Should you discover your customer is a DRC member, our Trading Assistance Staffis here to support you. They can confirm the member’s good standing and provide additional information, ensuring you feel confident and well-informed in your business dealings.

If your customer does not reside in North America, we may still have some information about a company as our membership continues to expand into other continents. Our members’ transactions are now covered regardless of their location or whether the product entered commerce in North America.

In the event that your customer is not a DRC member or does not have an established DRC arbitration agreement, you could expose yourself to needless risk and expense should challenges arise. The DRC provides resources to help you avoid costly and time-consuming disputes.

Have you ever requested references and checked their credibility? Occasionally, you will find nonexistent references or discover that they have an unfavourable reputation. References are only valuable if they are reputable.

When someone contacts you on behalf of a company, ensure that the person is an employee or an actual company representative. We have often seen people believing they are dealing with the company receiving the goods, when in reality, their contractual obligation is with an intermediary.

Be sure to check phone numbers, addresses, personnel, and the EXACT company name. It is important to cross-reference these details with DRC’s records. If they don’t, this could be another red flag.

If your customer or prospect is in the United States, check out “The Perishable Agricultural Commodities Act,” also known as PACA. Here, you can find out the status of their PACA license.

Is your trading partner with Blue Book Services? If not, why not? If a firm is not listed, they are either not dealing with significant volume or could be a new business.

Take the time to learn about Blue Book Services’ rating system and credit scores. Being listed only means the company is either a credit agency member or is conducting enough business to appear on “the radar screen.” A company listed without a rating does not mean its business status is “OK”; it could mean it is not ratable or the information on file is insufficient to establish a rating!

Finally, if you can’t find any information on a company or some of the information raises a red flag, and you want to know more, check other credit rating agencies such as EQUIFAX.

Many disputes could easily have been avoided by checking with the DRC and practicing due diligence before the sale. Everybody “takes a chance” occasionally, but is it worth taking the risk? Consider a DRC membership as your risk mitigation tool.

The DRC is a non-profit, membership-based organization serving the produce trade. Our harmonized standards, procedures and services helps members avoid commercial disputes. When differences of opinion occur, we provide consultation, mediation and arbitration services to resolve the issue in a timely and cost-effective manner. The DRC has been referred to as a referee to the industry.

We aim to counsel and educate our members about best practices to help them avoid disputes altogether. We have designed our dispute resolution model to reduce risk and facilitate trade between members.

Are you intrigued to learn more? You can meet the team at upcoming events. The DRC looks forward to meeting produce industry enthusiasts like you at events such as Fruit Attraction 2024 in Madrid and the Global Produce & Floral Show in Atlanta, where we will be exhibiting and delighted to answer any of your questions.

You will find additional information about the DRC and a list of other events where we will be present on our website at fvdrc.com.