Debt Assignment Fraud

[in-doct-rin-ate]

We are established company of three years now, more recently we have aligned to new distributors to supply resell IT hardware to our customers and prospects, and unfortunately in the instance I am posting about, we were unable to get a 30 day credit limit to cover the cost of this particular item of hardware.

As a company we went down the debt assignment route with this distributor, effectively informing our customer that they would have to pay the distributor direct as opposed to us for the monies owed. We obtained a signed letter from our customer acknowledging and agreeing to the assignment on their company letterhead the sum owed at 30 days. All invoices issued were amended to reflect the terms of payment to the distributor -- not us.

Furthermore we and the distributor credit checked this organization, all accounts and directors were fine, 100k limit. Once the hardware had been delivered, the organization disappeared off the face of the earth, telephone numbers were no longer working and emails were not responded to, basically it looks like we are a victim of a high level fraud.

I have discussed the situation with the distributor -- long story short, they tell us we owe them the money as we are the principle contractor. From my understanding, the debt was assigned and it should be the end user owing the money to the distributor, and the distributor will need to pursue the debt with these fraudsters.

So who owes who in a situation like this?