Customer refusing to pay

katsutlieff

This maybe a long shot but would anyone know what the procedure is for recovering payment from a customer. One of my husbands customers has ignored all invoices that have been sent to them and all correspondence. The work was done in February of this year and is for a substantial amount of money.

The worst of it is it is an old friend of my husbands, who when we saw them recently on a day out they hid from us. We even wrote to say if they were having problems paying we could work out an installment plan.

welshwizard

The only thing i can suggest is small claims court (if it's below £3000?)

Otherwise, why not go and speak to them face to face at home (or the business address). You could employ a debt collector who may be able to recover the money.

First of all, I would try to speak to them face to face - the personal touch can often work. It's much harder to lie to someone face to face than over the phone or ignoring the post.

Good luck, hope you get the money back.

Jan

Kat

I tried to post this afternoon was the site didn't seem to be playing ball.

You should find further details of the steps you can take at this link http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073858790&topicId=1074453392&r.s=tl

It must be one of the most difficult things to do, collect a debt from someone you regard as a friend. They are obviously aware of the debt if they are too embarressed to face you on a day out. But their financial problems mustn't become yours - easier said than done, I know.

Good luck.

PGM

Could try sending a solicitors letter, shouldn't cost too much, has worked for us a few times.

katsutlieff

Many thanks for the replies. I am going to go and see them this weekend and try to come to some sort of arrangement. If not will send a solictors letter.
Christmas is looming and kids asking father christmas for Nintendo DS's and Ipod, need the money.

Just such a shame that this person was suppose to be a friend.

smileyface

Customer not paying

Hello,

I think you should see them first, then if that doesn't work, send them a reminder letter for the overdue invoices, then take it further with debt collectors to help you out. At least if you've sent them letters then it's legal and above board that you've tried everything you can to try and recover the money.

S:001_smile:

blobbyh

Personally, I would now abandon the friendly route (which doesn't seem to have worked anyway) and adopt a more formal approach. You're not likely to remain friends after this anyway so you have nothing further to lose by going strong and legal.

First off, send a final reminder with the invoice amount as it currently stands with the text "Must be paid within fourteen days or else further action will be taken" or similar in the narrative somewhere. You don't have to say what the further action will be just yet since the implied threat of it may work. Send by recorded delivery.

If this remains unpaid and it was a business to business transaction, send a further invoice with the original amount plus late interest charges plus the one-off fee as laid down by the 'The Late Payment of Commercial Debts (Interest) Act 1998’. There are online calculators that can help you with the amounts to be charged and the correct wording to be used. You also need to make it clear that the longer the debt remains unpaid, the more interest will be accumulated. Set a seven day limit on this. Again, send by recorded delivery.

I've used this one before; http://late-payment-law.co.uk/index.php?file=calculator.page

Finally, if all else fails you will have little choice than to issue a small claims court order, the cost of which will also be borne by them. I wouldn't bother with solicitors yet as you can do most of this yourself and it's actually quite simple though it can take some time to achieve a result.

Of course, it's all up to you but I'd strongly advise you to issue the formal letters first to lay down the necessary paper trail to satisfy the court that you have given the debtor ample opportunity to pay and they have been unwilling to do so. While ignoring the letters won't prove the existence of the debt (you'll need other proof for that), it won't help them either since if it didn't exist it's likely they'd have complained immediately.

Good luck!

katsutlieff

Thanks Blobbyh. I have previously sent a final invoice asking payment to be received within seven days, which I sent by recorded delivery. We have also sent a letter to inform them that interest will start to accrue.

Will send an invoice with the interest added as a final final demand.

So sad that things have come to this.

Have also sent a recorded letter to their business, they got one of their members of staff to ring and say they no longer work there, although they own the business!!

blobbyh

My old company went down that route of trying to retain the customer, but eventually I drew the line and sued a particular one but it was all to late for us. Our company went bust in January this year so you let people get away with not paying for too long at your own peril! Bear in mind they want you to go bust so I'd take that very personally and can you really still be friends when taking that into account?

At some point you have to do what you say you're going to do and now looks the time.

You're in West Sussex too, same as me? What line of business? PM me if it's confidential as I'd be very interested to know.

katsutlieff

Thanks for the advice, I'll look into the small claims court. Sorry about your business, it's terrible when you put so much hard work into something and people let you down.

My husband is a tree surgeon in Horsham. This is the first time we have ever had a problem with a customer refusing to pay in the eight years he has been working for himself.

Where are you based?

Thanks for the link to the calculator will come in very handy

Katherine