Is your commercial debt recovery provider legitimate?

Debt recovery is surrounded by myths and misconceptions and finding the right partner to work on your behalf can be a difficult task if you don’t know where to begin. This has not been helped by the recent publicity surrounding Global Investigations and Recoveries Limited and their behaviour that was, shall we say, less than compliant… So is your commercial debt recovery provider legitimate and how can you find that out? We’ve put together our top tips to help you figure it out.

What happened with Global Investigations and Recoveries Limited?

The business was wound up in the High Court after making unsolicited approaches to creditors that went against insolvency law. The company was contacting creditors and promising the ability to recover debts against insolvent companies by approaching directors directly. The company refused to hand over accounts or trading history and so the full extent of the damage to clients is difficult to glean but one individual was quoted £4,000 for debt collection services.

So how can you find a trustworthy debt recovery provider?

Here is our first tip on how to ensure that the organisation you have approached to recover your commercial debts is acting in your best interests. DON’T ever pay out any monies upfront for them to carry out any work. This is the last you will see of it. Any debt recovery firm that is worth its salt will be prepared to take the case on a no collection, no fee basis. Here at My Debt Recovery, all of our engagements are on this basis.

So what else can you do to make sure your commercial debt collection partner is acting ethically?

Commercial debt collection does not fall under a regulatory framework, it is outside of the scope of the Financial Conduct Authority. And so there is not a specific “badge” that you can look for or a directory of organisations that you can flick through, knowing that they are required to conduct business to certain conditions. So our biggest recommendation is to do your due diligence.
Research the business before you engage with them. Check out their website, their social media channels, research the important faces within the organisation. What experience do they have? You can also do a company search and find out how long the business has been trading etc. and check that the business is registered with Companies House. Are accounts and returns filed on time and up to date? Is the company VAT registered and does the VAT number verify when checked?

A sign of a respected and compliant commercial debt collection agency is a good level of positive and recent case studies. You could approach the businesses that have left reviews and ask them for further information on their experience with the organisation in question. We’d highly recommend doing this.

You can also evaluate how closely the organisation works with other professional service providers such as accountants, solicitors or Insolvency Practitioners (IPs). IPs are highly regulated and court-appointed officers so their partnership with a debt recovery organisation is evidence that the debt recovery agency is acting above board. You’ll see here that we work with many Insolvency Practitioners undertaking investigations and collections on their behalf.  We also collect overdue invoices for a number of solicitors and accountants.

Finally are there any other group/sister companies and do they belong to any regulatory bodies. For example, My Debt Recovery is part of the My Invoice Group which is also FCA regulated, a member of the NACFB and the Insolvency Practitioners Association and so the compliance, regulation and ethical behaviour that comes from those sister companies is likely to be ingrained across all organisations whether it’s necessary or not.

If you’d like to find out more about how we operate and how we can help you to recover your commercial debts then give our friendly and experienced team a call today. Contact us.