Dealing with Rogue Customers
You agree a job, the work takes place - and then you encounter issues with your customer. Are they slow to pay, non payers or making a simple final payment difficult?
Nobody likes a dispute - it costs time, energy, emotion - and often money.
In a culture whereby Rogue Trades are publicised - where do you stand on customers who don't play fair?
Below are advice, links and information to help you receive payment for the works you have completed.
Why won't the customer pay?
As much as it seems the simplest question - do you know or understand the barrier to payment?
Any payment queries in relation to works completed should be dealt with initially on a 1-1 basis directly with the customer. Often asking them what solution they are looking for determines their personal expectations - and gives you a clear indicative of what situation you are dealing with.
What is stopping the customer from paying you?
Was the paperwork supplied at quote clear and agreed? Have any changes been detailed in writing?
The new guidelines from the Consumer Rights Act, which came in on 1st October 2015, stipulate the importance of fair, explicit quoting and paperwork to support changes at any point of the work schedule. Click here to visit our section on what the new Consumer Rights Act 2015 means for traders and consumers.
Don't publicise a dispute via social connections
Receiving a delay in payment, can be emotional, especially when it critically relates to your cash flow or you feel it is a personal sleight on your workmanship.
Keep the details of what is happening away from business contacts and social media - easy to share out - but can be defammatory. By sticking to recommended guidance, you will enable the system and jurisdictions in place to work on your side.
Try to apply a third person view of the situation - if this was recanted by a member of the public, media or presented in a Court of Law - what would it look like to the lay person? Following the recommended steps below will maintain professionalism and integrity for your business.
Who can I talk to?
Mediation services are available locally and nationally - and with Alternative Dispute Resolution in place for traders and consumers - it's important to know your rights. Remember - they are there for when negotiations and communications on a 1-1 basis between you and the customer have been exhausted.
Access the tools and documentation uploaded to the right hand box on the screen for proposed letter templates. Trading Standards are happy to advise on disputes and give you advice on how to proceed.
www.businesscompanion.info has a variety of information on many different areas relating to rights - and where you stand.
The Citizens Advice Bureau have a wealth of information - and all of these services combined are able to fully inform you of the best procedure method.
Steps to progressing a payment
As with any dispute, it is important to follow a series of practical and reasonable steps, that if in a worst case scenario, you can present to a Legal service to evidence you have attempted to gain payment in a professional and fair manner - exhausting all opportunities for compromise or settlement between both parties.
- Contact your customer to discuss what the barrier to payment is. Can it be resolved reasonably? What is their blocker? Remember - if their required solution isn't feasilble (i.e. re-doing the whole job, requiring full new materials & labour or materials used have been discontinued - then compensation becomes an option).
- Are money or cashflow the presenting issue?
- Is a payment installment scheme a solution? (Please reference Payment Installments Letter)
- If you remain unsuccessful and the block centres on a customer being unwilling to pay - send the customer a first reminder letter (template attached).
- Try to make contact to now establish where the customer is and how they intend to progress your payment.
- If you remain unsuccessful - send the second payment reminder letter (template attached).
If either of the above steps do not result in resolution - then it is worth considering mediation, which may be at cost. Contact your trade body (if applicable) or reference to CTSI List for recommended companies trained in this area. You may already be entitled to mediation support as a part of a trade body membership or able to commission their services on a "one off" basis.
Don't forget - the intervention of a mediator will be on the basis that every opportunity and option has been exhausted between you and your customer.
If conciliation is not achieved by any of the above steps - then Court action can be considered to try and recoup the monies. Follow the above steps - this will provide you will a bundle of evidence to prove you have tried to seek conciliation in a fair and just manner.
Small Claims Court
Advice on how to list and progress a Court Claim can be found via https://www.gov.uk/make-court-claim-for-money/court-fees.
You should always send the "Final Reminder Letter before Action" before you proceed to the Court arena.
Claiming via a Court is your Legal right - but always consider the full cost and time requirement of proceeding forward.
Equally a Court will make a decision in favour of one party - who will be able to make a claim for costs incurred if successful in their petition - or a claim against if the case is not ruled in your favour.
The new Consumer Rights Act 2015 has been brought in to lessen the workload on the Court system, increase clarity for traders and consumers - and encourage face to face resolution on a 1-1 basis.
In this way - the Court system becomes the last resort for unresolved disputes.
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