SCAM ? administrator charging late payment interest & charges

I have received a letter from an agent acting on behalf of an administrator of a company I used to do business with. They have gone back 6 years and charged interest on any invoices that were paid later that 32 days after invoice date. Trading terms with the company were that payments were due by end of the month following delivery. Nearly all my payments were made within this time period. The agent has calculated interest at about £178 and added £40 compensation per invoice - totalling £4570!
This is a clear case of the administrator using the act to extort money out of small businesses. Has anybody had experience of this scam ?

Wendy,

This is not a scam see payontime.co.uk/how-to-collect-the-interest-for-late-payment-debt-recovery-compensation

That being said the correct payment term needs to be used when arriving at the amounts you are liable to pay.

Once you establish the amount you owe you may wish to consider how best you wish to reolve the issue. The Administrator may well not be in a position to expend costs on court action!!

Good luck & keep us posted.

Leigh

If the correct payment terms were used it would be less than £10 of interest totalled over 5 invoices relating to 1 order; at the time my supplier accepted my payments without any queries. However my accountant recommends I take legal advice before replying - which will cost money. The company chasing me has been set up last year with the specific purpose of targeting insolvency companies.

Wendy,

Disappointing for you that your accountant is not more familiar with the Late Payment Legislation. Trusting any legal advice you seek will not be costly particularly when the answer is available to you on this site and since you have laready stated you paid invoices late.

Anyway good luck.

Leigh

Listen Everybody,

This is a complete waste of time. This law is unenforceable. Until there is a high court case involving late payment fees and interest, this is pretty much a dead duck law.

No one and no business should get too excited about this, there is really no case history to prove that this matter can be enforced.

Who out there is going to spend money to take a case to the high court for a ruling ?

Anybody interested in sharing the costs, please let me know.

All we have at the moment is some small claims or county court actions, they really dont count.

What should be a simple matter is not. Just try and enforce your statutory right !

All the customer has to do is ignore it and what are you going to do about it ???

James

We could not disagree with you more. The legislation is not a "dead duck" and the high court has already ruled on at least one case concerning the legislation and how it is to be enforced.

In Ruttle Plant Hire Ltd v Secretary of State for the Environment, Food and Rural Affairs [2008] EWHC 730 (TCC) a High Court Judge accepted that late payment compensation was payable on each individual invoice as opposed to the combined total of the invoices as a whole.

What more do you need???

Until such time as SME's start to take a hard line on late payments the UK SME community will continue to bear the brunt of the effects of late payment. SME's will continue to go bust because of shortfalls in cash flow caused in large part by sloppy payment practices.

Their suppliers will then suffer and on and on the cycle goes.

We would urge all businesses to rigorously enforce and defend their statutory right to late payment costs and interest and to vigorously pursue any claim they have against bad payers.