A. The United Kingdom

1. Amicable collections

1.1. General information

Our collectors try to collect debts without recourse to legal action by telephone and letter. We always try to obtain payment of debts in full, but will negotiate to agree on payment plans or settlement figures. In order to support this process in the UK, we must issue a letter before claim (LBC), which is the start of legal proceedings. This is not used in all cases, only in those where the collectors consider that the debtors have the ability to pay and need some strong evidence of our intention.

In England and Wales, we can issue a copy of the proceedings that will be sent to the court in the event that the debtor fails to make payment. When there is a dispute, we aim to reach an amicable solution between you and your debtor. We do this by analysing all the contractual documents (e.g. signed contracts, orders, confirmations, invoices, delivery notes, as well as standard terms previously agreed upon). All of our investigations are completed with the assistance and agreement of our legal team.

1.2. Local agents

We currently use a field agent partner to visit debtors to ascertain if they have any assets or means to make payment.

1.3. Interest

Late Payment of Interest Act

This act sets out to assist businesses faced with late payment problems. It does this by adding a number of rules to the contracts between businesses. It’s important to realise that this legislation applies only to commercial debts. It does not apply when one of the parties is not acting as a business; for example, sales to a private individual or a consumer. The debts should have arisen in the course of business. Both parties should be businesses, commercial entities, or public sector organisations.

Interest is claimed at the prevailing Bank of England rate – currently at 0.5% plus 8%. The rate is listed as the UK clearing bank base lending rate in the Financial Times, and is also known as the repo rate. The rate that applies is the rate in force at the end of the day that the payment was due.

1.4. Debt collections costs

As well as interest, you may also charge an amount to compensate for the costs of collecting late payment. The amount of compensation that can be claimed is determined by the outstanding amount as follows:

Amount owned is up to GBP 999

Compensation is GBP 40

Amount owned is from GBP 1,000 to GBP 9,999

Compensation is GBP 70

Amount owned is from GBP 10,000 and over

Compensation is GBP 100

1.5. Prescription

The Limitations Act 1980

This outlines the time limit in which you can chase your debtors for outstanding debts. This act only applies when no contact has been made between you and your debtors within the given time limit and only applies to the residents of England and Wales. You are given a fixed period of six years to chase your debtors, which is outlined in the Limitations Act 1980. After this period, it’s no longer possible to pursue your debts.

1.6. Accepted and most common payment methods

The UK still operates on payment by cheque, although the preferred method is by bank transfer. If possible, for long-running payment plans, we will seek standing orders or direct debits, but there is natural resistance to these by debtors.

1.7. Types of companies

There are a number of company types and each has its own particular requirements, which are listed below. One of the prime reasons why legal action fails is because the creditors do not know the trading styles of their debtors. An account opening form is highly recommended in order to support any legal action required at a future time.

Sole trader

This type of company is run by one individual. That individual is personally liable for the business’s debts. But in order to issue legal proceedings, we must first be sure of the identity of the individual, such as their name and, if possible, date of birth


This type of company is run by at least two individuals who have joint liability. Again, we need to be sure of the correct identities of the individuals in order to pursue them legally. In such a business, each partner is responsible for the business’s debts and can be pursued for the totality

Limited company

This type of company is run by directorship. We can only pursue the company and not the individuals themselves

1.8. Sources of information

Limited companies must register with the Official Register Companies House. Sole traders and partnerships are not required to do so. We are able to use several credit reference agencies in order to find out commercial details on limited companies.

In the case of individuals, we are primarily reliant on a tracing agent to undertake personal online searches and qualify this information by means of calls to the individuals’ neighbours and other businesses.

In the UK, using a debt collections agency is the most preferred method when outsourcing debt recovery.

(End of chapter 1 - Amicable collections)

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