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 to). 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 whether 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 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, selling to a private individual or a consumer. The debts should have arisen in the course of the 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 the 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

Limitations Act 1980

This outlines the time limit in which you can chase your debtor for the outstanding debt. This act only applies when no contact has been made between you and your debtor 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 debtor, which is outlined in the Limitation Act 1980. After this period, it’s no longer possible to pursue your debt.

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 primary 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 identity 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 directorships. We can only pursue the company and not the individuals themselves

1.8. Sources of information

Limited companies must register with the official Companies House register. 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 calling the individuals’ neighbours or 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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