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Buying a commodity for business or personal needs means you should make the right selection. This should include the products bought at the right prices. Most purchases are made through cash transactions. However, there are other instances that a consumer might consider an alternative. This is especially on products whose affordability can pose a challenge. The availability of installment buying creates the right avenue that a consumer can use to achieve the objectives. 

Installment Buying

Unlike other modes of trade, buying goods on installment calls for a different process. This involves purchasing a product over a period. This simply means that the buyer gains the right to use the commodity immediately. This is then followed by periodic payments, which are also known as installments. The payment can be with or without immediate part payment. Buying on installments comes with a contract in which the buyer agrees to pay the purchase price in regular but periodic installments. This is done to either the merchant or another agency that will oversee the payment.  As much as buying on installments comes with several benefits, especially to startup businesses, it can be a hectic run for the seller. This is because of the increasing cases of fraud in installment purchases. Most sellers are falling victims to fraud in installment buying and which leaves the business struggling in the long run.

Fraud in Installment Buying

Fraud in installment can be defined as the consumer's failure to meet the purchasing agreement or contract over some time. This failure also includes the use of other unlawful means to tamper with the selling price or accumulative amount to be paid for the commodity. If not controlled or dealt with in time, fraud in installment purchases can cost the seller the business. An effective way must be sort and help the merchant avoid fraudulent transactions on goods sold on installments.  

How to Avoid Fraud in Installment Buying

Before any agreement is reached and the transaction made, there are several ways that a seller can utilize to identify and avoid fraud. Below are some of the ways that one can use to avoid fraud in installment buying.

1 Understand the method of financing.

This implies the need for the seller to have a financing method that is effective and easier to use by the customers. Such financing method as the use of credit card increases the chances of avoiding frauds.

2 Have a well laid out agreement or contract.

This is vital as it increases accountability on the consumer's side as far as payment is concerned.

3 Utilize legal instruments.

No one likes to interact with law enforcement agencies. The legal instrument you use will, to a larger extent, help in combating frauds in installment purchases. 

4 Have personal and company governing policies

They should be well stated and easy to understand. This is vital as such policies will come in handy during business transactions.

5 Engage a third party.

This implies the need to involve a supervisory body or agency in your contract agreement. This is especially an agency that specializes in the purchase and collection of receivable goods. 

6 Pay attention to the consumer’s character.

6.It’s a “buy now pay later deal,” which means you should know in-depth consumer's information in-depth. Such aspects as education, employment and financial status, moral character and shrewdness should be known well.


Installment buying is gaining popularity among the people. Its effectiveness in buying the right and desire commodity cannot be understated. With the right seller, a buyer can get the best product at the best rate. However, in recent times, many merchants have incurred losses. This is due to the increasing cases of fraud in installment buying.  Finding the right way to identify and handle fraud before any transaction is vital. This is why paying attention to payment methods, consumer characters, using the legal instrument and developing governing policies becomes vital.

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