Debt Collectors

[Recruiter]

Hi Guys,

We are in the process of searching for and instructing a business to business debt collection agency to collect a debt that is consuming too much of our time and energy.

It is a bit of a minefield, we can gather that the standard rates are anywhere between 15% and 25% which are reasonable, however I need some advice on other matters.

Firstly, do B2B Debt Collectors need to be licensed?

Secondly, can a Debt Collector levy charges for visits, letters, calls, issueing court action etc and are they enforceable / legal?

Thirdly, one has menitioned sending round a non-certified bailiff to collect the money - I assume this is just another name for a debt collector? Do they have power to remove goods from a business?

Thanks Team

 

[yorkshirejames]

A debt collector has no powers to enter a property.

I imagine they will either do an inclusive fee for you, or they will charge per letter or per visit.

Why don't you just pay £80 and visit http://www.moneyclaim.gov.uk/ yourself?

 

[Jenni384]

Why don't you just pay £80 and visit http://www.moneyclaim.gov.uk/ yourself?

Because often people will be issued with a CCJ and still not pay, so you still need to get your money out of them, often via a debt collector.
I hear a lot of complaints about Small claims being a pain as people still don't pay. But then other people swear by it.
It all depends on the client whether the threat of a CCJ will spur them into paying you, or not.
Difficult choice but sometimes a debt collector is better than Small Claims, and sometimes the other way round.

 

[Recruiter]

Thanks Guys, yes I agree about the CCJ, we would rather leave that as a last resort as once you go down that route there is no turning back.

Does anyone know if B2B Debt Collectors need to be licensed?

 

[Anthony Reeves]

Let me try and set out the legal position.
Let give an example to try and illustrate the situation.
Company A is chasing company B for say £4,000.
A sends out its credit control letters and B does not pay. What do you do next? Why send it out to a debt collector? A debt collector cannot levy on goods, enter premises and cannot issue court proceedings (although some debt collectors mistakenly think they can litigate).

The debtor will be liable for the charges which the creditor can charge under the Late Payment legislation, or under the terms of the contract.

If a company has a good credit control section, it seems pointless to me to instruct a debt collector to repeat the steps taken by the credit control department, unless perhaps you want an enquiry agent to engage in some kind of dialogue or the company is quite small and in effect is out sourcing its credit control. But if the debtor is simply a won't pay then it serves little purpose.

So in my view, once a company has not paid following a reasonable credit control procedure, then you should contemplate court action. Now yes, the county court system is in a state of crisis at present but it does vary around the country. As you can issue in any county court (except in some situations) you are best advised to use a small and efficient court. My local county court (Trowbridge County Court in Wiltshire) is very good and has some very good District Judges.

Its a shame that some other courts are not as good.
I specialise in debt recovery litigation and I dispair at the administrative nightmare of some county courts and I have written about it in my book "Will I see you in court?" coming out next week. The reason for this mess is the principle of self financing. County court are expected to fund themselves from court fees. Court fees have increased and so fewer people are using the courts which not surprisingly has caused higher court fees! I was at a civil litigation course today and a district judge stated that many Judges agree that the principle of self financing through court fees is wrong. There is a black hole in the finances of the civil courts and the Government is expected to slash £30 million from the Court Service budget by March 2009.

So although the court system has problems at present, the less you use them the more the Government will increase court fees which will hit small businesses who want to get paid and indviduals who want to enforce their rights but cannot afford to do so.

I think it is about time the country woke up to what the policy makers have been doing to the civil court system. Politicians will go on about giving people more legal rights etc, but there is little point in having these extra rights if there will soon not be a satisfactory court system where you can enforce them. Perhaps if the civil justice system was renamed "The Bank of Justice", then the Government would pour in billions. The sad thing is that court staff will probably be facing job losses in the future when they have done nothing wrong. They have not lent money to people who could not afford it.

I am sorry if this has turned into a rant, but as you can gather, I am very angry that the state of the county courts is being ignored.

Anthony Reeves
Pinniger Finch & Co, Solicitors

 

[yorkshirejames]

I have written about it in my book "Will I see you in court?" coming out next week.

Anthony, please can you post details of how we can acquire this when the time comes. Not sure how much time you have, but it may be worth you getting a referral arrangement with Amazon (if they still do this) then giving us all that link.

 

[Anthony Reeves]

Thanks for the post.
My book "Will I see you in court?" is published by Emerald Publishing and costs £9.99. The publisher's tel. number is: 01273 695152.
You can order it from Amazon, along with my other books I've written.

Anthony Reeves
Pinniger Finch & Co

 

[Richie N]

I have found the county courts to be useless, and we have had a few experiences. They seem to go in the favour of the defendant rather than the claimant, and then all they want to do is take your money and do very little for it.....

 

[Peter Bowen]

You might find our invoice reminder service of some value in cases like this.

It keeps a record of all the reminders/credit control letters it sends so that you have them all in one place when it comes time to hand over the debt to the Mafia (or to your lawyer).

It's at www.getting-paid.com if you're interested.

Cheers

Pete