Here are a few case studies that explain how we work in more detail and illustrate the range of organisations we work for.
Nicholson Electrical is a family run business in St Austell. One of their clients had accumulated a debt of £18,500 dating back to 2011. The case was referred to Veritas in March 2014 by their accountants, Crest Accountants LLP.
Veritas Legal Services was engaged to recover the debt. Given the long-standing nature of the debt, the financial impact on our client’s business, and the repeated false promises from the debtor we decided on immediate, firm action. Veritas served a statutory demand as the precursor to filing a winding up order. This got the immediate attention of the two directors of the debtor company.
The £18,500 debt was recovered in full plus debt recovery costs of £1031 and interest of £3700.
Sadly, a common feature with outstanding business debts is that debtors repeatedly promise that debts will be paid imminently. This often stalls the debt recovery process for some time and can lead small businesses into financial problems.
Nicholson Electrical Limited is a small family run business in St Austell. One of their clients had run up a debt of £18,500, which is a significant percentage of their turnover. The size and age of the debt meant that they had to refinance their business to stay afloat.
Their accountants referred them to Veritas because of our reputation for rapid, cost- free debt recovery.
While most debtors settle after one letter and a follow up call, we reasoned that the situation had gone beyond the stage where a simple formal letter would have the desired effect. So we issued a statutory demand under section 123(1)(e) of The Insolvency Act 1986 prior to filing a winding up order.
In this case the debtor business employed another common tactic to head off the intended action. In response to the statutory demand they claimed to have no funds or assets and that our client would gain nothing from the winding up.
Nonetheless we pursued the action. The directors of the debtor company subsequently decided that their personal reputations and business prospects would be harmed by being associated with a failed company and the debt was settled.
The debt of £18,500 was paid, together with debt recovery costs of £1031 and interest of £3700.
Because the debt recovery service is free to our clients we normally retain the costs and interest. In this case, because the business owners had suffered financially through the delay and had injected personal money into their company, we also made a contribution of £1500 to help towards those financing costs.
The difficult economic climate and poor management practice in some of their clients’ businesses created an unacceptable level of bad debts with customers in the UK and Eire. Essilor’s previous debt collection agency had been unable to achieve a meaningful improvement in the level of outstanding debt.
Essilor engaged Veritas Legal Services in November 2011. Using letters, follow up calls and, where necessary, notice of legal proceedings and insolvency action we significantly reduced the number of bad debts. In most cases a letter from Veritas produced payment of debts plus interest at 0.5% above the base rate and compensation of between £40 and £100 per invoice.
Since March 2013 Essilor has also been able to claim reasonable debt recovery costs under the Late Payment of Commercial Debt Regulations 2013.
There has been a significant reduction in the value of outstanding debt and a process established for chasing debts before they become a serious issue.
Essilor is the world leader for corrective lenses and has a UK turnover in excess of £60m. Its headline brands are Varilux®, Crizal®, Definity®, Xperio®, Optifog™ and Foster Grant®. Essilor also develops and sells equipment for prescription laboratories, particularly through its subsidiary Satisloh, as well as instruments and services for optical professionals.
Debt collection followed our standard procedure which is to write to debtors, clearly stating their obligations and informing them of the consequences of non-compliance. In most cases this resulted in rapid and full payment at zero cost to our client. Where required, for debts over £750 we served statutory demands under the Insolvency Act 1986.
We also tested the robustness of Essilor’s retention of title clause. One of their customers was trying to sell his ophthalmic practice and pass legal title of Essilor’s goods when he had not paid for them himself. A team of operatives was despatched to the debtor’s premises early one morning and the goods were successfully loaded onto a vehicle and repatriated to Essilor. The company director tried unsuccessfully to report Essilor’s enforcement of their retention of title clause as a robbery.
We take great pride in helping businesses across all sectors and sizes. Essilor is one of our larger clients, but we are just as committed to recovering the debts of sole trader electrician, for example.
Typically we recover 93% of commercial debts within 7 days of instruction and at zero cost to the client.
Our client has a straightforward and efficient process established for recovering commercial debts and little or no cost. Essilor has also established a reputation as being a company that is serious about chasing outstanding debts.
The business had successfully placed a member of staff with a client. Despite receiving several assurances, payment of the invoice for this service had not been received.
Veritas Legal Services was engaged to recover the debt. We wrote a strongly worded letter before action on behalf of The Really Good Recruitment Company and warned the proprietor that he needed to comply or our client was prepared to bankrupt him. We followed this up with numerous calls to the debtor and conversations with their legal representatives.
The debt was recovered in full within 7 days plus late payment interest, compensation and recovery costs totalling £450.
In June 2013 we were approached by The Really Good Recruitment Company Limited based in Exeter. They are consultants in executive and management recruitment for permanent and interim placements in the South West. They specialise in HR & Training, Sales, Marketing & Media, Financial Services, Accounting, IT, Interim Management and Non-Executive Directors.
Having successfully placed a candidate they received numerous assurances of being on the next payment run by their client but their invoice remained unpaid. Our letter galvanised the debtor into action, who then reported that the candidate had left after only 10 weeks service.
In the subsequent dialogue nobody from the debtor company would take ownership of the position they were in. Ultimately, we placed so much pressure that the debtor instructed a top law firm in London to fight their corner. It’s likely that many businesses chasing a debt for themselves would be intimidated into giving up at this point.
Once we were dealing with fellow professionals, we were able to establish the facts. The solicitors soon agreed that their client was at fault and were liable to The Really Good Recruitment Company under the terms of their invoice. The fact that the candidate had left, while unfortunate, was largely irrelevant as the invoice was due with or without any rebate that may have been agreed.
We took all the inconvenience and aggravation out of collecting the debt for The Really Good Recruitment Company, allowing them to concentrate on running their business. Chasing debts can be stressful and time consuming – we relieved the company of that burden while getting the matter resolved in their favour.
Hopefully this will be the only time The Really Good Recruitment Company will need our services. They achieved full recovery, with compensation, without being tied into a contract with us or being obliged to pay a registration fee.
percent of cases recovered in 7 days
percent professional, ethical and efficient.
The debtor pays our fees under The Late Payment of Commercial Debts (Interest) Act 1998