Debt Recovery for Scottish Affiliates

Posted on 24. Sep, 2008 by in Education

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I will start by saying that this is in no way legal advice and you should always seek advice from a lawyer before you start legal proceedings against any company or individual. Also it’s only for Scottish Affiliates, I am sure English and Welsh Affiliates will have access to a service that is similar, however I am not aware of this service at the present time.

So here I am, I have finally had enough of ‘a certain leads based network’ that finds it hard to pay any invoice inside the 30 days. (The time they state it will take them to pay). While I am not going to dwell on the company in question here as there is really no point in getting yourself worked up about it, instead I simply need to work on the matter in hand and that’s getting the money we are owed.

What you can do to recover your debt (this part applies to everyone in the UK)? You can use the Late Payment of Commercial Debts (Interest) Act 1998. Without going into massive detail you are entitled to charge interest at the Bank of England base rate plus 8% and compensation for the recovery at £40 for debts up to £999.99, £70 for debts from £1,000 to £9,999.99 and £100 for debts £10,000+ and you can do that any time after the agreed credit period. If there is no agreed credit period then a 30 day default period will apply. So for Affiliates it basically starts from the day you raise your invoice and submit it to the company, or if self billing the day the company makes the invoice on your behalf, 30 days after this or a reasonable agreed credit period if they have not paid you, then you can use the Late Payment of Commercial Debts (Interest) Act 1998.

But what happens when you submit an email/letter to a company stating you want paid and they have to pay interest and your recovery compensation and they do not pay within 7 days? Well it’s time to take it to the next stage (this part applies to Scottish Affiliates but I am sure an English equivalent must be available). The next stage if you’re a Scottish Affiliate is to get a lawyer to act on your behalf to recover the debt, a law firm I have used before with much success are Yuill & Kyle, they have a website that allows you to do pretty much everything online and at very reasonable cost.

Stage 1. After you have asked the company to pay the debt get Yuill & Kyle to issue a pre-sue letter, basically giving them the opportunity to pay up or you will take them to court. It’s basically a ‘Letter Before Action’ which can save you (and the person you are trying to recover the debt from) a lot of time and money if they just pay up within the 7 days stated in the pre-sue letter. What is the cost of this service? Well, it’s £3+vat and makes it very affordable for any Affiliate to access this service. I have had great results with this service before and you do not often find a lawyer that can write you a letter at that kind of cost. I think the reason they can is that they have clearly automated most of the work via their website and after all, it’s the same letter they pretty much send out on behalf of everyone that uses their service so why reinvent the wheel if you have written it correctly in the first place.

Stage 2. If Stage 1 has not been successful it could indicate that the company you are trying to recover your debt from is in some kind of financial difficulty and you really have no time to lose here as you want to make sure you get you’re money before they go under. Time for court action! In Scotland that would involve taking the company to a Sheriff Court which can be in any town in Scotland but normally you do it at the one closest to you or the person you are recovering the debt from. If, for example, the company is based in England (as the majority of Affiliate Networks are), you would simply take action at your local Sheriff Court, as you are the one that is recovering the debt as a Scottish company.

You are probably thinking going to court is expensive and time consuming, but think again! This is the part you need to get yourself into the mindset of, in Scotland for small actions the system is generally accessible to most people. Where court proceedings are successful, judicial expenses are recoverable from your debtor. Yuill & Kyle charge a sliding scale based on the level of the debt, £50.00 to £250.00 costs £30.00, £250.00 to £750.00 costs £35.00, £750.00 to £1,500.00 costs £40.00 and debts over £1,500.00 costs £45.00 if you’re successful. Where proceedings are unsuccessful, in addition to the fee above, they will add judicial expenses and disbursements so clearly only take people to court if they genuinely owe you money and are not paying up.

The last Stage is recovery, but you only really get to this stage if no payment is made in response to a Scottish decree. This can be enforced in England and will get the benefit of being enforced with a High Court Enforcement Officer, you have to pay extra for this but that is also recoverable.

So hopefully you found this helpful as a Scottish Affiliate/Business owner, as I stated at the start this is not legal advice and you should consult a lawyer at every stage, and I can recommend Yuill & Kyle as a good place to start if you’re having problems recovering a debt.

And I will end with one last thing, remember to at least email and call the company you are trying to get the debt paid from first, as most of the good companies will resolve it before you even need to think about all the steps above as everyone makes the odd error when it comes to paying an invoice. Given half a chance most people will pay without giving you the headache of recovering debt if they are serious about wanting to work with you in the future.

Another good source of information is www.payontime.co.uk lots of good information for every UK business here.

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  1. Late Payment of Commercial Debts | Supercod - Personal Blog - 1 October 2008

    […] you can claim a recovery free along with interest for each day the payment is late. I have wrote a huge big article on what Scottish Companies can do to recover money but the legislation is the same in England so […]