Introduction - Payment Protection Program

The FNC Payment Protection Program (FPP) is an essential service offered by the FNC group to its members. It provides a safeguard against potential non-payment issues in the freight forwarding business, fostering trust and reliability within the network. This document outlines the program's description, terms and conditions, benefits, application process, exclusions, and other relevant details to ensure comprehensive understanding and effective utilization of the program.

Program Description

The FNC Payment Protection Program is designed to protect members from financial losses due to non-payment of invoices. Membership in the FNC group includes freight protection as part of this mandatory program. The program aims to bolster bilateral relationships among members and ensure smooth business operations.

Mandatory Membership: FNC members are required to participate in the freight protection program from 2020 Jan 01.
Coverage: Provides compensation for unpaid invoices up to USD 20,000 per year.
Premium:
Freight Guaranteed Badge: Participants receive a badge for use in email signatures, websites, and other stationary.

Eligibility and Participation

All approved FNC members are eligible to participate.
Premium Membership Options: Members pay an annual membership fee, which includes the premium. The membership tiers and fees are as follows: Basic Members pay USD 1500 annually, Verified Members pay USD 2000 annually, and Platinum Members pay USD 6000 annually. Platinum Members only need to pay USD 1000 from the second year onward. Members who do not pay the specified fee will not be eligible for any claims from the FPP Program.
Participation is crucial for availing of the program benefits.

Terms and Conditions

Credit Policy:
Credit Limit: Members can offer a credit limit of USD 5,000 to basic members and USD 10,000 to verified members.
New Members: A credit limit of USD 5,000 is applicable until they complete one year of membership.
Maximum Claim Amount: USD 20,000 per year.
Compensation Procedure:
Required Documents: Unpaid invoice related to freight forwarding, project handling, or transportation. Copies of three reminders sent at reasonable intervals.
Reporting Default: Creditors must report the default within 90 days from the date of the invoice. Members must submit a claim 30 days after the dues in case any member is not paying.
Evaluation and Recovery: Each case is evaluated by the admin. Collection agents are appointed if necessary. Compensation is released from the fund pool if recovery fails, usually within 45 days.
Conditions: The program is applicable only for freight payment defaults. Cargo claims are excluded and require separate insurance. Claims are not accepted from non-participating members or for business conducted before the policy commencement date. Payment cannot be held due to shipment delay or damage; this should be covered by liability insurance.

Benefits

Financial Protection: Coverage: Up to USD 20,000 per year for unpaid invoices, providing significant financial security. Bad Debt Recovery: Utilizes a security fund to compensate members for bad debts.
Enhanced Credibility: Freight Guaranteed Badge: Enhances the member’s credibility and trustworthiness within the FNC network.
Administrative Support: Follow-Up Assistance: FNC Admin intervenes in cases of delayed payments, providing follow-up and support. Credit Rating System: Maintains a credit rating system to monitor and manage member credibility.
Networking and Relationship Building: Bilateral Relationships: Strengthens business relationships through reliable payment practices. Community Alerts: Admin circulates alerts for any payment violations, ensuring transparency.

Steps to File a Claim

Report Delay: Report any payment delays exceeding 60 days to the FNC admin with supporting documents.
Submit Documents: Provide unpaid invoices and reminder copies.
Admin Evaluation: Admin evaluates and appoints recovery agents if needed.
Compensation: If recovery fails, compensation is processed within 45 days.

Exclusions

Cargo Claims: The program does not cover cargo damage or loss; separate cargo insurance is required.
Non-Participating Members: Claims are not accepted from members who have not joined the program.
Pre-Policy Business: Claims for business conducted before the policy commencement date are excluded.
Payment Withholding: Payments cannot be withheld for shipment delays or damages; such cases are handled by third-party insurance.

Additional Exclusions

Claims Older than Three Months: The FNC underwriter will not accept any claim older than six months from the date outstanding dues.
Suspended Members: Business with suspended or terminated members is not covered.
Unreported Members: Ensure the member is verified before engaging in business to avoid coverage issues.
Minimum Claim amount must be above US$500

FAQ

1. Is my company eligible to offer credit to FNC members?

Yes, your company can offer credit to FNC members as long as it adheres to the specified credit policy outlined by the FNC. This includes abiding by credit limits and terms associated with the Financial Protection Plan (FPP) for members.

2. What happens if a member requests a higher credit limit?

Each company maintains its own credit policies. However, it is essential to note that FPP coverage is limited to the specific terms and limits defined by the FNC. Requests for higher credit limits beyond those covered by the FPP may expose your company to additional risk.

3. What is the maximum credit limit for members?

Basic Members: USD 5,000.
Verified Members: USD 10,000.

These limits are part of the FPP's coverage and cannot be exceeded without potential exposure to uncovered risk.

4. What is the policy for offering credit to new members?

New FNC members may be offered a credit limit of up to USD 5,000 until they complete one full year of membership. After one year, they may be eligible for a higher credit limit, depending on their verified status and the company's discretion.

5. Are cargo damage claims covered under the Financial Protection Plan (FPP)?

No, cargo damage claims are not covered under the FPP. It is advised that you obtain separate liability insurance to cover any potential damages or losses related to the cargo.

6. Can I withhold payment due to shipment delays or damages?

No, payments cannot be withheld due to shipment delays or damages. These issues must be resolved through third-party insurance, not by withholding payments under FPP guidelines.

7. How do I file a claim if there's a payment delay?

If a payment delay exceeds 60 days, you can file a claim with the FNC Admin. Ensure you provide all relevant supporting documents to substantiate the delay, such as invoices, communications, and proof of non-payment.

8. How is a claim processed under the FPP?

Once a claim is submitted, FNC Admin will:

Verify the claim.
Intervene to attempt recovery of the owed amount.
If the recovery is unsuccessful within 60 days, FNC Admin will compensate the claimant according to the FPP terms.