UDC Steel is one of the UK’s largest independent stockholders and distributors of specialist steel products to the construction industry.
Customer in difficulty
UDC had supplied a regional construction company with reinforced steel products for use in the construction of a purpose built care home. Payment was now 5 months overdue and the client had received information from another customer suggesting the debtor was in financial difficulty.
The debt collection process
On the same day we received the instruction we sent the debtor an Initial Demand letter requesting full payment within 7 days, and warning that legal proceedings would be taken if payment was not received. Initial investigations began concentrating on the financial position of the company.
The debtor failed to respond our Initial Demand and a Final Demand letter was sent giving the debtor a further 7 days to make payment, and explaining the consequences of a court judgment against the company. A copy of the Final Demand was also sent to the 3 Directors of the company by email to ensure the letter was seen and read by all individuals.
Before making telephone contact with the debtor we carried out further financial and non-financial investigations. We found that while the company appeared to be in good financial health, they had taken on a construction project which was much larger than any they had previously completed. We also found that there were a number of creditors chasing for payment of materials supplied over the previous six months. It became clear that the company was servicing payments to suppliers of materials to complete the large project they were working on while avoiding paying older debts.
We allowed the debtor 2 days to consider the content of the Final Demand letter and then began attempting telephone contact with the directors of the company. As expected this proved difficult with reception refusing to direct our calls to any of the Directors, we finally made contact with the Managing Director that evening on his home number and discussed the findings of our investigations.
2 days later Advocate received a call from the debtor’s secretary advising that full payment had been made by bank transfer. The payment included late payment interest and our recovery fee as claimed
Advocate’s process leads to a positve result
This particular case is a good example of how pre-legal processes, detailed investigation work and targeted telephone contact performed correctly can achieve good results quickly.