Debt collection of an invoice of £3,080.00 that was 90 days overdue at the point of our instruction. Our client, a small electrical company run by a husband and wife team with the assistance of 6 employees, operates throughout the English Riviera in glorious Devon. The business was established in 2010, with the director initially trading as a sole trader. The firm has built up a good reputation locally with hundreds of repeat domestic and commercial clients and over 250 positive reviews on Checkatrade.
Our client received an instruction from a Torbay based letting agent to carry out electrical works to a seafront Victorian property that had been converted into holiday lets. It was the first time they had carried out any work for this company. The usual account opening form was issued and completed to allow credit checks to be carried out, which showed that the company was long established with a good credit rating. A credit limit of £5,000.00 was set, and the order was accepted.
The electrical works were carried out on the dates requested and completed according to the quotation supplied and accepted. The works were signed off, and the relevant certification and local authority notification was issued. Our client issued an invoice on 30-day payment terms as agreed.
Request to Re-Issue Invoice Causes Concern
The invoice was not paid within the agreed 30 days, and when our client chased for payment, they were advised by email that the invoice must be re-issued to a different limited company before it would be paid. Our client was asked to invoice the company that owned and operated the property as holiday lets. When our client carried out a credit check on the company, they found that the company had a poor credit rating, and more concerning, two unsatisfied county Court Judgments were registered against the company.
Our client refused to re-issue the invoice and demanded payment from the letting agent. The letting agent insisted that they were not responsible for payment and then ignored our client’s further correspondence, resulting in Advocate being instructed to collect the debt.
Passing the Buck Instead of the Pounds
It was clear from the information provided by our client that the letting agent had placed the order, and there was no doubt that they were responsible for payment. It was also obvious that the letting agent was struggling to get paid by the company that operated the property, leading them to attempt to pass the buck and the problem onto our client.
We commenced action and issued a Notice advising the debtor of our client’s intention to take the matter to Court if payment was not forthcoming. The debtor maintained their position that they were not responsible for payment and that they were merely acting as an agent for the property owner. We presented the debtor with indisputable evidence to substantiate that they were responsible for payment in the form of a quotation request and acceptance, a works order, emails discussing the ongoing works, and finally, signing off on the works. All of the documents and correspondence were in the name of the letting agent. In fact, our client had never heard of the other company until they were requested to re-address the invoice to them.
We also advised the debtor on what they could expect to happen if the matter proceeded to Court and they were forced to stand in front of a Judge and respond to the evidence supplied by our client. The debtor realised that the game was up and agreed to pay up.
Two days after the payment was received and our file was closed, we were contacted by the debtor. Who asked if we could help them to collect a debt from the company that owned the property where the work was carried out. We politely declined.