Event / Technical Orientated Debt Recovery Agency

[cfmonk]

Hi all,

 

Following my recent debt chasing difficulties and the utter hopelessness of the debt recovery agency I chose to use (incidentally, still arguing with them about their commission) I am fairly convinced I can do this job significantly better than them and perhaps better than many people in the market. I also have a couple of people who would be interested in handling the admin side for me thus making it possible to run alongside my current business interests. I was thinking that I would want to specialise in recovering debts from our industry, I think having somebody who understands how things work in a business (a bit!) would make the whole process much better.

 

So, a little market research:

Do you use debt recovery agents often?

Would you? If our costs were all added to the debtors payment (depending on your Ts & Cs of course)?

Would you prefer to have somebody who specialises in the industry?

 

 

Thanks,

 

Chris

[Wingwalker]

Hi Chris,

 

I think that the first thing you may need to ask yourself is what happens if you get into something above your head and you have a legal obligation to your client. I'm sure that no doubt you have seen / heard / acted upon a situation pertaining to yourself but when you are dealing with the affairs of others would you still have the same gutsy passion at heart? Please don't get me wrong or take it the wrong way as I think you have hit on a potential idea although is there a market big enough to warrant you spending your time effort and money into?

 

I for one occasionally do research in various formats which range from the history of a particular building to family trees as well as other things inbetween and have done so for many years which is a good fall back option job wise. But when I take on the work, the clients want results and sometimes it can be very difficult to give customer satisfaction when you are faced with a series of brick walls, although thankfully so far I've always managed to come up with the goods.

 

In previous companies that I've worked for, the credit control dept would sometimes use a debt collection agency or take things to a small claims court. Lots of paperwork with limited results. Personally I've never dealt with any agency and so don't know any of the legal stuff that you have to do or be qualified in to be able to operate as an agency. But I would imagine that there would be something in place to govern and licence such operators. Have you looked into this yet and what is the answer?

 

Hope that helps in some small way.

[John Diamond]

While regular paying clients might get a wee bit of leeway on payment terms most businesses cannot afford to 'finance' their clients business especially in the current economic climate. Businesses who cannot afford debt recovery specialists might be interested in a service that would administer their clients in-house debt recovery procedure. A fixed fee for an agreed schedule of work would be preferable to a percentage of the amount recovered.

 

Experience in the industry you are operating in is always a bonus IMHO :). Debt recovery agents are only chasing their clients money - it doesn't matter what the money owed is for and knowledge of a particualar industry might not be a priority of a business when deciding on the best method of debt recovery - more likely to be who has the most clout and will likely get my money back.

 

We have not used the services of a debt recovery agent. But my advice is be careful of throwing good money after bad money in chasing a debt. The few instances we have had an outstanding debt go bad, there was no money in the end to pay any of the creditors. It would have been a waste of time paying someone to chase money that wasn't there - even the extra costs of debt recovery.

[cfmonk]

Thanks for the replies. As for getting into something above your head and having a legal obligation to your client, well, if we never tried anything new we would never get anywhere and, as I said, the standards shown by this company I met with recently will be extremely easy to surpass!

 

As far as legislation goes I will need a Consumer Credit Licence from the OFT. If I were only going to deal with limited companies and LLPs then I would need one but in this industry many people operate as sole traders and so a licence would be needed. The legislation surrounding debts does not appear to be particularly

complicated, a little bit of applied reading would cover it.

 

I would do everything on a no-win no-fee basis but would therefore only be taking on cases where I am likely to succeed.

 

Am still thinking positively about the idea, any more thoughts?

 

Chris

[oli]

I think it sounds like a good idea but as you said yourself a lot of people are Sole Traders. This kind of pressure maybe enough to tip a few good people over the edge. I am not condoning late payment, it is one of my pet hates however a little leeway here and there is allowable as long as there is some contact. A company who will remain nameless occasionally pay 10 days late however they always let me know in advance. I would rather this than ignoring my emails/calls/letters etc.

 

Personally my invoices are rarely over £1500/job and to have to pay a set fee for the recovery could end up costing me more than sending a few letters and potentially having to make a claim through the courts. (My best friend is a lawyer, which makes life easier ** laughs out loud **).

 

Im not sure what the benefits of having a DCA that specialize in our industry are as all the DCAs I have ever dealt with don't really care about what you do they care about getting the money.

 

If you think it is a viable business and can get enough work then go for it, I would love to be proved wrong on this one.

[cfmonk]

Im not sure what the benefits of having a DCA that specialize in our industry are as all the DCAs I have ever dealt with don't really care about what you do they care about getting the money.

 

Yes getting the money is obviously the main priority but I think having someone with experience of the kinds of deals and contracts and disputes and their resolutions which come up in the industry may help. It may also help when talking to a debtor and agreeing possible action plans as well as being able to tell whether excuses are just excuses or whether they are reasons for not being able to pay.

 

The fixed fee would not be charged unless the debt was recovered and in most cases (as long as your Ts & Cs state that all debt recovery costs are recovered from the debtor) then this can be easily added to the debt.