Late payers

[Shay]

I currently have two late payers who are over a month overdue, both were on holiday so have had their grace period and then the usual cheque on its way etc, so now have issued the last request before going the small claims route. If I dont have on my terms and conditions can it be added afterwards that there is a fee for late paying?

I have no probs going down the small claims route but up until now the relationship with both had been quite amicable and I would have preferred to continue this way.

[redtiger]

You need it on the Terms & Conditions they actually agree to, but I'm pretty sure you're allowed by law to charge the UK Bank Interest Rate per month to hike up the outstanding costs.

Think this is a legal question! We got stung like this in the past but our Terms of Business are pretty tight now! :)

Alex

[Shay]

Yeah, my T&Cs now are that bit tighter but just annoying when these people know you are freelance so therefore getting paid is quite important as the company can swallow a debt to some extent but a freelancer can't!

[bwglaw]

Yes, you can add a late payment fee in accordance with the Late Payment of Commercial debts (Interest) Act, whether it is in your terms and conditions or not. Just send them a letter and notify them that a late payment fee has been added to the debt.

Jonathan

[Shay]

Is there a minimum/maximum that can be added and where can I get a copy of the Act you mention as this could be sent with it maybe?

[etechsupport]

If you operate yearly payment option, identify the late payer's and send them letters stating that their service can be continued only if they switch over to yearly payment mode due to such reason. You may also consider to give some discount for yearly payment option to attract them.

[bwglaw]

Is there a minimum/maximum that can be added and where can I get a copy of the Act you mention as this could be sent with it maybe?

The Late Payment of Commercial Debts (Interest) Act 1998 (http://www.opsi.gov.uk/ACTS/acts1998/19980020.htm) has been amended by the Late Payment of Commercial Debt Regulations 2002 (http://www.opsi.gov.uk/si/si2002/20021674.htm) which there sets out the statutory interest etc

You do not need to attach a copy to any letters. Just do a standard letter referring to the debt which is X months/weeks overdue and under the Late Payment of Commercial Debt (Interest) Act 1998 a sum of £X has been applied as statutory interest..etc etc

[bwglaw]

If you operate yearly payment option, identify the late payer's and send them letters stating that their service can be continued only if they switch over to yearly payment mode due to such reason. You may also consider to give some discount for yearly payment option to attract them.

Generally, you could only change the payment period after the period has expired. Changing the period may constitute a breach of contract depending on the contract and any terms and conditions. The frequencies of payment will also depend on the services you provide.

[etechsupport]

Well, the late payer's are breaking the TOS or either you are extending their credit limit and you are not taking action as per your TOS any way, does it not means that you are also breaking your own TOS ? Btw as original posters state " I have no probs going down the small claims route but up until now the relationship with both had been quite amicable and I would have preferred to continue this way". hence you need a "comfort zone" to come up with a solutions that can be acceptable and quite amicable to both.

[Shay]

Have no idea what you mean etechsupport?

how much should I add on? Up until now have not had this sort of problem before.

[eddieriby]

.....Theres a company based in London called Payment Chicken (put it into google), they will send someone dressed in a Late Payment Chicken Outfit into the companies reception who owes you money and stay there until you pay, if you get asked to leave they keep coming back, again and again!! :D

[garyk]

what a great idea! Couldnt find payment chicken within the first 5/6 pages of google though.

[eddieriby]

I cant post URL's yet :mad:

Its www dot paymentchicken dot co dot uk :D

[thekitchendesigner]

http://www.paymentchicken.co.uk/index.html

How funny is that!

I'm also having problems with one or 2 B2B clients, paying for work carried out in June. I'm calling them almost every day. Once i get the money, and if they come back with more work, i'll ask for payment up front or no work is done.

One client really bugs me - he asked me to email him what was outstanding, dragged it out even more by saying i forgot to write the address on (despite the fact he's payed me god knows how many times in the past year!) and then sends me a cheque for part of the invoice - how bloody annoying! He's done this twice now without explanation. This one again is for work going back as far as June.

It really stresses me out.

[bwglaw]

.....Theres a company based in London called Payment Chicken (put it into google), they will send someone dressed in a Late Payment Chicken Outfit into the companies reception who owes you money and stay there until you pay, if you get asked to leave they keep coming back, again and again!! :D

Likely to amount to harassment and run the risk of having the debt wiped out completely as a result

[eddieriby]

Just a comment, there was a feature in a entreprenuer magazine, they are doing really well from it :)

[Ender]

Likely to amount to harassment and run the risk of having the debt wiped out completely as a result

Interesting I didn't know that, but my first reaction was that it could be worth it under some circumstances LOL...

Thinking aloud though, what constitutes harrassment here? I mean I've heard of people getting letters, frequent calls at home and even at work etc. That's not harrassment I guess, people are entitled to chase up their debts, but I'm curious if there are examples of people stepping over the line?

Cheers,
Ender.

[bwglaw]

what constitutes harrassment here? I mean I've heard of people getting letters, frequent calls at home and even at work etc. That's not harrassment I guess, people are entitled to chase up their debts, but I'm curious if there are examples of people stepping over the line?

Cheers,
Ender.

It is a question of fact and each case will be different. Frequency of visits is not the only factor. The conduct of the agent and/or creditor concerned will be a factor.

To give one extreme example. I had a client that owed £3000. The creditor instructed a debt collector to collect. My client received demanding letters and the tone used was not appropriate and even threatened to send the big boys round (their words), amongst other things.

My client was terrified and feared for his safety. Police refused to get involved because they said "its a civil matter and what happens if the person is entitled to the money" (Police officer's words) The Police Officer obviously did not understand his job as there was a clear threat.

I reported the debt collector to Trading Standards and had a meeting in my office with them upon which they investigated. The debt collector is no longer in business and the debt is wiped entirely.

This is one of the main reasons why I advise clients to exercise caution when instructing a debt collector because you will be responsible for their actions.

I think this 'Payment Chicken' is a very bad idea with intent to humiliate and degrade the debtor.

[etechsupport]

Have no idea what you mean etechsupport?

how much should I add on? Up until now have not had this sort of problem before.

Actually I have replied to "handsongroup" comments referring your original posts.
I would suggest you to find a "Comfort Zone" and have discussion with your client to streamline the things.

[bwglaw]

Just because the client may have breached the service provider's terms and conditiond does not mean the service provider has grounds to breach his own. The wording of the terms and conditions will be important here, especially where a variation of contract is concerned. Without sight of these terms I cannot comment specifically