LRC deal with a large range of consumer debts from a variety of different industries and collect both non Consumer Credit Act (CCA) regulated debt and CCA regulated debt provided there is a prospect of litigation.
The majority of consumer debts go through our pre-legal collections strategy. You can choose from our standard consumer collections strategy or we can create a bespoke strategy together. This process allows us to try and resolve any disputes or complaints the customer may have if payment of the debt is not forthcoming.
All consumer debts are data cleansed before communications commence. The pre-legal collections strategy comprises of data cleansing, letters, emails, calls and SMS texts which are spread over a 30 day period. Payment can be made in a variety of different ways including direct debit, over the phone or via a 24/7 automated payment line. All of our collection letters have a unique bar-code to enable payment to be made at any Paypoint outlets.
We can arrange repayment plans once the customer completes and returns a Personal Financial Statements (PFS) to us. Once received, we assess what amount is sustainable for your customer. Payment arrangement plans are reviewed after 6 months.
Under the Debt Recovery Pre-Action Protocol (2017), a Letter Before Claim (LBC) must be sent to the debtor before Court action can commence which gives them a mandatory 30 days to respond. The LBC must include an information form, reply form and detailed income and expenditure form. The Pre-Action Protocol does not apply to commercial cases.
We use the quicker and cheaper Claims Productions Centre to issue claims through the County Court. We are able to handle any of your defended matters up to and including a final hearing. The work is supervised by Rachael Ward, our COLP lawyer (Compliance Officer for Legal Practice).
Once Judgment is obtained and if no payment has been received there are a number of enforcement methods to be considered and a number of reports which we can obtain to help us identify which enforcement method is appropriate. We will advise you on a case by case basis given the circumstances of the matter.
The most common types of enforcement we use are High Court Enforcement Agents, Attachment of Earnings Applications and Charging Order Applications Order.
LRC can assist you with insolvency actions including Statutory Demands, Bankruptcy Petitions and Winding-Up Petitions.
Depending on the circumstances there are several reports which we can obtain to help us determine the best way forward to successfully recover money for you. The reports could be for home address and employment tracing.
We offer our Insight report which identifies any County Court Judgments, credit applications made and checks residency. Office Copy Entries can also be obtained to see if your customer is a property owner. All of this can be valuable information which will help with the decision making process as to whether litigation (court action) may be appropriate
These are particularly helpful for high debt value cases and they can establish a sole-trader’s whereabouts. The reports can be obtained at any point in the debt recovery cycle. They show whether taking court action is appropriate and cost effective and will help us to make recommendations to you on how to proceed. They can also be used at the post judgment stage to help determine which enforcement method is appropriate to use.
Through our experience of working together with organisations we will:
- Save you time and valuable resources in the collection of money owed
- Devise strategies to maximise recovery of your debts
- Provide you with continued support. advice and assistance throughout the debt recovery process
- Ensure that your reputation is protected at all times by always acting in a professional, compliant and ethical manner
- Provide you with Debt Manager access to enable you to keep yourself updated as to the progress of your cases at all times
If you have any questions about our service or would like to discuss your matters with us in greater detail, please contact the Business Development Team on 0330 024 6342
A. You need to weigh up whether the expenses and energy spent in recovering the debt is justified by the amount you are owed. Sometimes, it might be financially reasonable to write off small debts, however this could set a precedent for the future. Always investigate why you have not been paid; for example if your customer is unhappy with the service they’ve received, you might want to rectify that first. If you are still unsure whether or not your consumer debt is worth pursuing, speak to a member of our team for advice.
Before commencing Court action it is always worthwhile trying to gather as much information as possible about your customer to enable you to make an informed decision. Important information that may assist and that can be obtained include obtaining details as to the customer’s employment status and, if they are employed, the employer’s details. Other information that is useful to find out includes whether the customer is a homeowner and an insolvency check and credit check.
A. Take a diplomatic but firm approach. Discuss the situation with your customer, and try to resolve any problems so that you can reach an agreement. You want to offer great customer service, but remember that you are a business and customers who refuse to pay are not valuable customers. Explain what steps you intend to take to recover the debt, letting the customer know before you start any legal proceedings. Most customers pay after receiving a Letter Before Action (LBA) from us demanding payment within 7 days.
A. If a customer cannot pay, there is no point in demanding immediate payment in full. Negotiating part payment and rescheduling the debt – confirmed in writing – can at least help you recover some of the money you are owed. This approach also improves the chances of maintaining a good relationship if the customer’s problems are only temporary.
A. Definitely not. Starting a legal process does not commit you to follow through all the available steps and you can choose to stop chasing a debt at any time. You remain in control and you’ll be kept up to date with the progress of your case at all times.
A. Ideally you will have a written and signed contract; or if you sell goods you may have other documentary evidence such as a purchase order. You’ll need evidence that you delivered the goods/service and fulfilled your side of the bargain. It also helps if there is clear evidence that you made the customer aware of your terms and conditions before the contract was agreed. If you are unsure on this, speak to a member of our team to discuss the quality of your evidence.
A. Under the Late Payment of Commercial Debts (Interest) Act 1998, after 30 days you are entitled to charge interest at the Bank of England base rate plus 8%. You can claim for debt recovery costs, which start at £40 per invoice.
You are able to claim “contractual” interest if your terms of business set out a set rate of interest claimable should payment of invoices not be made. Alternatively, at the point that Court action is issued “statutory” interest can be claimed from the date the invoices fell due for payment – this statutory rate of interest is currently 8%.
If your customer has cash flow problems, it may be worthwhile negotiating some kind of compromise with part-payment and a rescheduling of the debt. This will help you to maintain your relationship with the customer whilst also ensuring you get paid. If this fails and you have to pursue a legal claim, it at least shows that you have attempted to resolve the situation fairly.