Dealing with bounced or cancelled cheques from non paying customers

[Olz]

Dealing with bounced or cancelled cheques from non paying customers

This happened to me a couple of years ago, said happy, paid cheque, cancelled cheque, said not happy with no good reason.

You just need to folow a few steps;

1.) Send her/him notice of dishonour giving opportunity to pay, using the wording below.

2.) If no payment go on money claims online (online county court website) and file claim for amount sighting bill of exchange act

3.) Print and send to him giving opportunity to pay before you submit to court (this step is optional)

4.)Submit claim and pay fee which is approx £60

Probably won't get to an actual hearing as the only defences to bouncing / cancelling a cheque are;

- Cheque obtained fraudulently

- Zero goods or service received in exchange for cheque

- Contract is illegal

So as long as you hve done work for a customer none of these apply in your case.

Result - you will get a judgement for the amount plus daily interest and court cost. Which will result in him having a registered ccj.

You can go further and enforce the payment with a count court bailiff or pay a bit more to have it transferred to the high court and have a private bailiff firm enforce it at the debtors expense which is what I did.

From an 800 ish debt I ended up with about 1100. The court process took a few months but once the private bailiff had the writ he had the money in my bank within a week.

I'm on the iPhone at the mo but later I'll post up the exact wordings I used. Given to me by a solicitor acquaintance who said it was so simple to do he would just email me the wordings for me to put on the letters and forms and not even charger anything.

No hearing was needed they sent her the claim forms outlining the case and asked for a defence she couldn't raise any of the three possible defences and the judge just awarded me by default.




....
Wordings

Right, here we go. The key point you need to understand is that this has NOTHING at all to do with the quality of your work, or if he is happy with it or not, it soley revolves around the bill of exchange act which makes it unlawfull to cancel or bounce a cheque unless one of the specific things have happened.

1.) You get nothing - no good or services in exhange for the cheque
2.) The contract was illegal
3.) The cheque was obtained fruadulantly

In your case NONE of these apply, or can apply. The law was developed to prevent people getting things and paying by cheque and then cancelling to duck out of payment due to the risk assoiciated with a cheque not being a payment there and then.

This is the first letter you need to send, do it now and do it by recorded delivery.

John Smith
123 JOHN STREET
ANYTOWN
NORTH YORKSIRE
AA1 1AA

4[SUP]th[/SUP] October 2009

Dear John,

Notice of Dishonour

I give you notice that cheque number 101593 dated 17/9/2009 account no.11111111 of HSBC Bank drawn by you to pay your arrears of £877.27 Has been confirmed dishonoured on 21/09/2009 by reason of non-payment and that you are held responsible.

Payment of the aforesaid sum is required in cleared funds within seven days of the date of this letter. Failure to pay the same will result in Court proceedings being issued without further notice.


Yours faithfully


SST Tiling Services

Obviously Ive changed the details to post it here but apart from that this is the exact letter i sent.

This was the exact wording I used on the claim for on Money Claims Online, which is Northampton County Court, Used as the court for the online service which is much much easier than going to your local county court and filing papers offline.

If the case involves a hearing, which I very much doubt given he cant raise a defence, it will transfer to your local couny court, I have copied and pasted this directly from the claim form which I still have, the fee was £60, which is added to the amount you claim so you get it back anyway.


Register on Her Majestys Court Online Service .... https://www.moneyclaim.gov.uk/web/mcol/welcome

Read the guidance notes and then complete the claim form online, the wording I used was below, and you just need to change the dates and specific, the wording is basic and to the point which is all it needs to be.

A large amount work has been done at the defendants property, between the 31/08/09 and
the 14/09/09,returning on the 17/09/09 to meet the defendant at the address after she delayed payment claiming not to be happy with the work. On the 17/09/09 the defendant attended the property checked off the work and paid the invoice in cash and two cheques One was honoured, the other was returned to yself from my bank on the 24/09/09 marked return to drawer, having been cancelled by the defendant. Some minor elements were redone which was damage not caused by me at her request as good will. The defendant then refused to pay the full amount and as a means to and end was offered £177.27 discount. She accepted and issued another cheque for £700 on the 24/10/09 which again was cancelled two days after issue. I seek to claim £877.27 under the Bills of Exchange Act, and associated court costs due to the illegality of cancelling the cheques under the afore mentioned act.

I even offered a discount, this didnt matter as you can see I claimed the pre discount amount.

I got the judgement without having to lift another finger.

I then spoke to the county court bailiff who said they were a bit of a toothless tiger when it came to personal debtors, as they would visit three times only, and if they didnt get the money they gave up. The fee was £100 again which was added to the debtors debt so I moved straight to the high court route.

They recommended tranfering up to the high court, I used a firm called National Enforcement. I sent them the info and a copy of the judgement from the county court and they drafted the application for writ form for me, sent it to me to check and sign, I returned it with a cheque for £50 (the high court fee) and they submited it to the high court to have it 'transferred up' producing a writ.

A county court judgement cant be enforced by a private bailiff, it has to be a high court writ.

Once they had the writ, (which took a couple off weeks to be rubber stamped by the court) they went round to her house and clamped her car, knocked on the door and said, no payment no clamp removal, she paid there an then, the £877 debt resulted in a payment to me of £1117.01.

It cost me £110 to do so i made £130 in interest on the debt for my troubles.

 

[DHTiling]

Ok... copied these from another thread... I hope this helps others who come across this type of customer etc.

 

[Olz]

Beware of firms offering to recover the debt on your behalf for upto 50% of the value taken as there fee. This is so simple and the courts are so used to seeing it, you can do it all youself simply.

 

[Alan.P]

That is a very good post Oli, should help someone along the way.

Thanks.

 

[White Room]

Great advise there, hope I never have to use it though...

 

[user123]

God, I really really could have done with that advice a few years back. Bookmarked. Thanks Oli and Dave.

 

[CJ CERAMICS]

excellent post really valuable info

 

[Richard Edwards]

Thank you for this info Oli and Dave.. I 've saved it for future ref -

I 've got one at present, but different in that the client does not want to pay for the work done, claiming the water volume too low and temp of the water too cool on a shower valve we fitted, albeit on his instructions. Our invoice is only £377 and I discounted it as he was a friend, [note 'was'] and we did not charge him for the valve £175.

So work quality / goods and services supplied are in still in dispute so Oli's route is not relavent for my case just at the present .

In nearly 9 years of trading this is a first for me !

Happy Days

 

[Andy Allen]

theres alot of it about richard, iv'e had 2 this year..

 

[The Legend; Phil Hobson RIP]

I used to tell potential customers, " I don't want you to be happy with my work, I want you to be delighted, If you are not, don't pay me." After reading this I might have to re-think my sales pitch.:yikes: