Debt Recovery Advice for Businesses
Over the past 18 months there have been a number of cases brought against companies and businesses for unethical and inappropriate ‘debt recovery’ practices.
Banks, Utility Firms, Payday lenders and Mobile phone companies are just some of the industries that have been hit with fines or warnings over their practices. Couple this with the massive surge in consumer compensation schemes and your internal ‘debt recovery’ processes could well land you with a massive fine or at the very least see you in court.
Debt Collection Agencies and their processes are now being heavily scrutinised by the FCA (Financial Conduct Authority) and these legislative measures also cross over into the mainstream Business sector. As one of only a few Debt Collection Agencies in the UK to have been given full authorisation by the FCA, we at Federal Management are fully aware of the laws that prevail.
As a result of the aforementioned, Companies across the UK need to exercise caution in how they go about their own internal ‘Debt Recovery’ procedures or they could face serious penalties and/or actions. need to be very careful in how they go about recovering debts or they risk serious penalties from authorities.
If you are unsure if your business is seen to be acting in a compliant manner then here is a check list for you to cross reference your current policies with:
- Never telephone debtors too early/late in the day to chase money.
- More than 3 telephone calls in a day to a debtor is considered harassment.
- You cannot enter the home or place of work to speak to a debtor.
- Use of social media sites to ‘contact’ a debtor is not permitted.
- If a debtor requests documentation relating to a debt, you must provide this.
- You must never disclose details of a debt to a third party without authorisation from the debtor.
- You should not pressure the debtor to borrow from other sources to settle your debt, nor should you coerce them into selling their property.
- You must be willing to accept instalments on debt where appropriate.
- Never send a communication that pertains to from a Debt Collection Agency or Law firm.
- You must never demand payment using threatening language.
The modern day world is very different than that of twenty years ago and it is always better to be safe than sorry.
It is better to have a clear and defined credit control process from outset and ensure your customers are fully aware of your payment terms. You should have a cut off point for any late payers when third party debt recovery action becomes the option. This will save you time and money in the long run if you work with a reputable and professional debt recovery agency such as ourselves.
If you would like to speak to one of our friendly advisers about how Federal Management can help your business, do not hesitate to call us free on 0800 043 6922 or email us at email@example.com