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Who is your client? Really?

In debt collection I am amazed how many times when you ask what the name of the client who has not paid is or the entity that they are dealing with comes back with an answer of “I’m not sure”!

I have one current client where I am not sure if the “name” – and there is only one – is the first name, family name or a nick name.  I am expected to collect the money though!  I have another where I asked if the debt is in the person’s name, the director’s name or the Company name.  I could have been speaking in an ancient Egyption dialect as the look on the face was total confusion.

If an account is to go legal, you must have the correct name of the person or entity that the deal was struck with.  So when “Harry” shakes on a $25,000 contract, is he acting on behalf of Harry – and who is Harry – or is he with ABC maintenance, ABC Holdings, ABC 123 Pty Ltd or is Harry just a supervisor for a completely different company?  Harry could also be a nick name, short for some other name and so at a later date when you ask for Harry and no-one knows of a Harry you have nowhere to go.

You need to very clearly ask “so who or which Company is this deal going to be with”?  You then need to make sure that if it is a Company, what is the ABN number of the entity.  You should then do a search and find out if that company is in fact the legal entity the same as what is quoted and are they actually still trading?

It is way to late when the account is 60-90 days over due to say to Harry you are going to take him to court and he tells you that he was only the person negotiating the deal for another Company.  To then find that the other Company may have gone into liquidation, may have major cash flow issues or is a $2 Company that has no assets and no chance of paying then only comes back on one person – YOU – to be able to blame.

No debt collector can help if you can not be sure which company or person you are dealing with.  Take that extra 5 minutes when negotiating and get the correct information.  That includes the correct spelling of the Company, individual or Directors you are dealing with. Make sure you have the ABN number – and it matches the Company name you have been told you are dealing with.  Get vital information like addresses (work and home), phone numbers (mobile, work, references), business address, email address and any other identifiable information.  If someone is hesitant to give you any or all of these, history says be careful!

Never be afraid to ask for a deposit, progress payments or if you have a gut feeling that something is not right, ask for proof of where the money is coming from as once again, it is too late 60 days after you have finished to start asking and find that they won’t answer their phone, don’t appear to be at any of their addresses or tell you they have no money and so won’t be paying you for your work.

Debt collection and recovery of your money is in most cases not easy.  But it becomes near impossible when you have not got signed terms and conditions, you are not sure who the entity, person or Company you are dealing with is and your only real points of contact are a dodgy email address, a disconnected phone and a memory of where you met the guy 12 months ago.

If it all seems a bit daunting, please contact us for assistance or go and see a lawyer who understands contracts, entities and how you can protect yourself.

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