I frequently receive enquiries asking if SAS Daniels offer cheap automated debt collection services. The simple answer is no, but we do offer cost effective debt recovery services that are tailored to your particular business and circumstances.
Our debt recovery service is actually one of the Dispute Resolution team’s main areas of expertise. The work is overseen by qualified Solicitors.
It is often assumed that debt recovery and debt collection are the same thing. They sound similar don’t they? The English Oxford Dictionary defines ‘recovery’ and ‘collection’ as:
Recovery = Retrieval, Repossession, Getting back and Redemption.
Collection/Collect = Group, to Assemble, to Fetch and to Accumulate.
Alike, but not quite the same.
A significant amount of debt recovery matters are dealt with by SAS Daniels after debt collection has been attempted unsuccessfully and the debt remains due.
Debt collection companies offer a cheap and fast online service online.
In our experience, debt collection agencies usually generate standard 7 day payment demand letters providing basic information about a debt. However, as the age old adage goes, “you get what you pay for”. Should no response or payment be received to a payment demand letter, this letter would not be sufficient if you needed to progress the matter towards Court proceedings as it would not comply with the Court’s pre-action obligations.
Would a debt collection company have the ability to issue your claim or serve a Statutory Demand of the back of this 7 day demand? Yes possibly, but there could be significant consequences in doing so. Firstly, a reasonable time (in the eyes of the Court) for a debtor’s response is 14 days (longer in more complex cases). There is also certain information that must be contained in a Letter before Action or Letter of Claim, which these 7 day payment demand letters frequently fail to provide. This could result in consequences such as the Court imposing costs sanctions, or the case could be stayed by the Court (halted for a certain period) while the reasons for not complying with the appropriate protocols are investigated.
An important factor to consider is whether a debt collection agency can enter into negotiations and correspond with the debtor in the event that a debt becomes contested, and assist with moving your matter towards a satisfactory conclusion. In my experience, debt collection agencies do not usually deal with contested matters.
This is not to say that a debt collection letter might not be effective, it may well do the trick if the matter is straightforward, in that payment is made by return and the case is closed. However, in the event of no response or payment or if a debt becomes disputed, the debt collection process has been exhausted and could result in an extra tier of costs being incurred prior to the instruction of Solicitors and the formal debt recovery process.
When a debt is due either during the course of business or between individuals, the debt recovery process is commenced in line with objectives that are contained within the Practice Direction on Pre-Action Conduct and Protocols. If a debt is due to a business from an individual or sole trader, the recovery process also has to comply with the 2017 Pre-Action Protocol for Debt Claims which was recently implemented by the Ministry of Justice. Should a matter need to proceed towards Court action, it is imperative that compliance with these protocols can be fully demonstrated. If they are not, sanctions may be imposed, particularly as far as costs are concerned. These protocols ensure that parties exchange a sufficient amount of information at the outset and show a willingness to settle any issues without the need for Court proceedings. Please see our related blog – Debt Recovery: What Are My Pre-Action Obligations?
We appreciate at SAS Daniels that each case is entirely bespoke – it is rare that the circumstances surrounding non-payment of invoices and/or the accrual of debts are ever the same. Where appropriate, we may advise you to instruct us to undertake pre-action checks in respect of the credit worthiness of the debtor.
We pride ourselves on providing efficient, comprehensive and, most importantly, fully compliant debt recovery services that are tailored to your particular circumstances and requirements to obtain a fast, cost effective and satisfactory outcome.
We are also able to provide advice as to the prospects of debt recovery action if you need to proceed with Court action – please see our related blog – Disputes over payments: How Can You Prevent and Resolve Them – and take action for you to enforce any Judgments obtained and advise you as to the most appropriate method of enforcement for the particular circumstances.