Free Commercial Debt Recovery – Fact or Fiction?
Have you been given the sales pitch “Free Debt Collection?” Unfortunately, in the Pre-Litigation or Commercial Debt Recovery Industry, we see it far too often and it is not always true.
Under the Late Payment of Commercial Debts (Interest), Act 1998 a creditor is entitled to interest, compensation and reasonable costs for recovering their overdue account.
Interest: You can claim interest at 8% above the Bank of England base rate from the date the invoice is due (at the end of the agreed credit window) to the point when it’s paid. You have up to six years to make that claim.
Compensation: This can be claimed for every overdue invoice – you can even claim it if an invoice has now been paid, providing you’re still within the six-year window.
Reasonable costs: The compensation is intended to cover your costs for recovering the debt but if these exceed the above figures, you can claim what hasn’t been covered.
However, if a customer is legitimately challenging an invoice, you are not entitled to compensation, interest or reasonable costs, which is often the case.
Also, a debtor doesn’t become a debtor for no reason they are either having difficulty in paying their outstanding account, have no cash-flow available in the business or are being reluctant to pay for whatever reason. Therefore even recovering the principal sum owed can be challenging never mind recovering additional costs on top of this.
Although we are very successful at recovering these costs and on the majority of cases we will collect these fee’s, which will cover your recovery costs, we will NEVER guarantee that these fees will be collected meaning you have nothing to pay to recover the outstanding debt, and any other Pre-Litigation or Commercial Debt Recovery company that claims this, is doing so falsely and we would throw extreme caution to this claim and encourage you to check all T&C’s thoroughly before signing or committing to the service and ask the question “Who is liable for your recovery costs if you do not claim interest, compensation and reasonable costs Under the Late Payment of Commercial Debts (Interest), Act 1998?”
If you have any accounts that are troubling you, contact us today to see how we can assist your accounts department in recovering these overdue funds to prevent any further strain on your cash flow or resources. Don’t delay as time could be the difference between you receiving payment or not. Call 01698 821 468 or email [email protected]