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Articles Allege Fraud by Freight-Audit and Payment Services; Updates Clarify Trax Technologies Not InvolvedOn or around February 19 a number of publications including Freight Business Journal (or FBJ) online and FD.nl published articles stating that two freight-audit and payment (FAP) services firms allegedly defrauded the Dutch electronics firm Philips (News - Alert) of €20 million in the years leading up to 2013. The articles also pointed to other cases where FAP service firms had misused their clients' money through fraud or financial mismanagement. The articles said one of the alleged perpetrators, a firm called Inspeg, was purchased by Trax in 2010. Within hours, FBJ issued an update and a clarification to say the company that acquired Inspeg in 2010 was a UK firm called Trax Universal Group. That company has no connection to Trax Technologies, Inc., Trax Holdings, or TraxTech Europe Limited, the correction said. The other publications are also issuing updates. "Because Trax Technologies offers FAP services as part of a broader portfolio of data services, we thought it appropriate to clarify some things about our company and the industry," said J. Scott Nelson (News - Alert), chief executive officer of Trax. <> Freight-audit companies verify invoices from firms that provide freight or transportation services. In some cases, Nelson said, audit firms also process payment of those invoices on behalf of their clients, the logistics services buyers.When payment is part of the FAP service, the best practice is for client funds never to flow through the service provider's control, Nelson said. Clients can achieve the process efficiency benefit the FAP service provides without allowing the FAP service provider to hold the client's funds. Trax supports this model with several of its global clients, Nelson said, but it is not yet widely practiced in the industry. The next-best practice involves two provisions. First, the service provider maintains a separate funding account for each client. Money in a client's funding account is never commingled with money held in any other funding account or in the service provider's operating accounts. Second, processes for funding, paying, and reconciling balances in the funding accounts are highly automated, tightly controlled and fully transparent at all times. Staff is thoroughly vetted. Duties are segregated, and processes are followed rigidly. "When Trax Technologies provides payment services, we follow these practices," Nelson said. "Trax has been doing business with some of the world's largest global corporations ethically, reliably and honestly for 21 years. We are regularly audited and have never been accused of any wrongdoing, impropriety or questionable financial practices." The primary business of Trax Technologies is to provide the data refining services required to deliver safe and actionable information supply chain data to companies that buy and sell logistics services, Nelson said. Data refining services includes the collection, normalization, correlation, and correction of data for use in downstream processes. Those processes include audit, cost allocation, supply chain performance analysis and others. Through this process, Trax eliminates part of the hundreds of billions of dollars of waste caused by bad data that pollutes dependent processes such as FAP services, Nelson said. By Nelson's definition, bad data includes information that's missing, incorrect or ambiguous. "A continuously assured, safe information supply chain increases trust and transparency between buyers and sellers of logistics services. It also helps the third parties who depend on that data to deliver their own services," Nelson said. "It accelerates processing cycles, reduces requirements for human intervention and improves the financial performance of all parties." About Trax Technologies Trax was recently recognized by Inc. Magazine as one of the fastest growing private companies and operates offices in the U.S., Europe, Asia and Latin America. For more information, visit www.traxtech.com. Twitter (News - Alert): @TraxTech LinkedIn (News - Alert): Trax Technologies
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