PCS Credit Management Case Study
Just when I thought I knew how a case would pan out I get a nice surprise!
A TEAM member was recommended to contact PCS as they had a client who used their services over a two month period but didn’t pay their invoices.
Our services were discussed whether that be a credit control function or that of a stronger debt collection function. PCS do not only offer collection on delinquent debts but a full service starting with a review of current collection procedures and consultation on how to optimise them, options for PCS to take all or limited number of accounts for regular credit control activity on behalf of the client, escalated collections right through to issuing. In this case debt collection on a no win no fee basis was chosen.
We immediately ran a credit check on the debtor which showed 3 recent CCJ’s. It wasn’t looking good for our client.
PCS were instructed and our letter before action was sent allowing the debtor to contact us within 7 days before litigation. At this point regulated interest and late payment fees were added. In some instances we can add our fee to the debt if it appears in terms and conditions, making our services free of charge for our client and increasing the penalties for the debtor.
The day before our letter expired the debtor got in touch explaining he had serious cash flow problems and requested a payment plan.
Why ? Why pay PCS and not the 3 CCJ’s prior ? A question I was not going to ask. However this is a common occurrence... the threat of another CCJ worries the debtor and is taken seriously given third party involvement (PCS); the opportunity PCS offer the debtor to avoid this CCJ by co-operating is then taken up.
After liaising with our client a payment plan schedule was offered to the debtor.
Whilst waiting for confirmation from the debtor that he agreed to the payment plan a Winding up Petition was issued against him. He buried his head in the sand and didn’t respond to my calls.
Just when I thought the case was to be closed, confirmation that the Winding up Petition was being fought came through. This is still an active case for PCS and we are awaiting the outcome of the winding up petition being decided. The debtor’s response and willingness to agree a payment plan leads to the question of “What if..?” What if our client had contacted us sooner, the third party involvement (PCS) could have prioritised our clients debt and seen the payment plan agreed and being paid, maybe even having cleared the debt before the financial pressure of all the other CCJ’s had taken their toll on the debtor. Earlier arrangement of the payment schedule could also have put our client in the position of having a further insight into the debtors financial position; had the payment plan defaulted ahead of the winding up petition it could have been our client issuing the petition and forcing the debtor’s hand for full payment in order to fight that.
I urge each of you reading this to review your debtors... early action is the best way to collect your debts. That action doesn’t need to be legal proceedings, it doesn’t have to mean the end of the trading relationship you have with your debtor, there just needs to be something different to the collections approach if the current one isn’t getting the debt paid. I am happy to offer tips and pointers to set you in the right direction, so if you do have a debtor you are concerned about please feel free to give me a call with no obligation – talking it through might be enough to give you the confidence and ability to collect that debt yourself.
Wendy Allen | Debt Collection Manager
t. 0161 241 9850 | m. 07931 173 245 |