Making your customers pay

It’s infuriating in any line of business when customers try to get away without paying – especially when they aren’t short of a penny.

Consider the annoyance of a friend of mine, who owns a luxury hotel in South Devon, after a particularly well-heeled customer left without paying.

The first realisation is that you have been taken in by a sharply-dressed smooth-talker. The second thought, certainly in my friend’s case, is how can you get your money back?

Tracking down the debtor is the initial priority. Your customer may have left a false address, but nowadays with a good tracing agent who, like a private detective, will trawl sources such as the electoral roll, you should be able to locate him reasonably quickly.

You first have to prove to the court that he owes you the money. Once you have obtained a judgment, you then have to somehow, using the available court processes, get the money you are owed. This is called enforcement.

Sending what used to be rather grandly known as “the Sheriff” (but now called the High Court Enforcement Officer) may persuade the debtor it’s time pay up gracefully. But if he has no ready cash or assets that can be sold to pay the debt, you have to think again.

These days it’s easy, using Land Registry Direct, to find out whether your devious customer has a house, and if so, you can ask the court to put a form of mortgage, or “charge”, on the property in your favour, which gets paid off when the debtor eventually sells the property.

Alternatively, you can force the pace by applying to the court for the property to be sold forthwith so that your debt can be paid immediately from the proceeds.

If he is employed, another way of getting money from the rogue is by an Attachment of Earnings Order, whereby the employer can be ordered to pay you monthly instalments from the debtor’s pay cheque before money goes into his account.

If none of these enforcement methods bear fruit and the debt is for £750 or more, you could follow the bankruptcy route. If the debtor does not want to be made bankrupt you may find he will pay up when a private detective serves him with a statutory demand, which is the first step in bankruptcy proceedings.

Finally, if there’s evidence that the non-payment was deliberate and dishonest, a visit from the local constabulary following an allegation of obtaining property or services by deception may also concentrate his mind to pay.

With ammunition like this at your disposal, it will be difficult for customers to avoid paying you money you are legitimately owed, so you shouldn’t hesitate to take robust action using a determined firm of solicitors.

For specialist advice, contact FastDebt, Foot Anstey’s debt collection unit, on 01392 685240.