Legal Court Case action in SCOTLAND - What you might not know about...

[Deleted member 1779]

What you might not know about enforcement in Scotland of bad debts.

Case Outline: A scottish company telephones 365Drills asking for small amount of stock. -
Agreed to supply on 30 days terms.
Called us again and order more stock.
Called again and order more stock.

Total Debt now £3500 in two weeks.

Company call again and order a large amount of stock.

Debt rises to £7000.

Now instead of just sending the stock we 365Drills call to ask for payment of £3500 to cover initial orders.
Lots of promises and then you guessed it.... No Payment.

When Did this All Happen? Happened in August 2013.

What next? Legal action - Court Case/

Result? Judgement in our favour for £3500 plus £500 costs. Debt now £4000.
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Now comes the hard bit. ENFORCEMENT!
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ACTUAL LETTER TO US FROM THE SOLICITORS:

Re : MR RICHARD HAZELL T/AS 365DRILLS V MR (Name Witheld) T/AS (Company Withheld)
A/c: 365Drills
Case No. : Removed

We refer to your recent communication dated 10th December 2013 and advise the application for Judgment
against the Defendant has been made to the ***** County Court.

Depending on the Courts current work load, we expect the sealed Judgment Order to be received back at this
office within two to three weeks from the date of the application being made which was 4th December 2013.

In the meantime we confirm we will contact you by e-mail with a copy of the sealed Judgment in order to take
your immediate instructions on execution.

Upon receipt of your instructions to proceed with execution, a further application will be made to the same Court,
(Court Name Removed) and we would expect the Certificate of Money Provisions to be returned to this office again within two tothree weeks of the application being made.

Once the sealed COMP is received it will immediately be sent to the Keeper of Scotland in Edinburgh in order to
register the Judgment to allow you to proceed with enforcement.

This procedure generally takes two weeks.

Once the sealed COMP, the Deed Extract, is returned to this office from the Keeper in Scotland, we will then
take your immediate instructions on how you wish to proceed with enforcement.

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YES I BET YOU HAD TO READ THAT TWICE AS WELL !!!

I dont understand a word of it! But its telling me that there is no great rush to go and get my money back. The company are still trading and it now looks like I will have to wait another month before enforcement.

I will as always update you guys on how things are going. But at the break neck speed of the scottish system it would seem the wheels of justice do still turn - if a little slower.

 

[Gazzer]

The law is wrong in so many ways, honest people getting scammed every day

 

[Deleted member 9966]

unless you know and trust your customers implicitly, always get paid for goods in advance. JCB don't let any of their machines go from their factories unless they've been paid for in full. If you haven't paid for it, you can't have it.

 

[CJ]

Name and shame them.

 

[Dan]

I'd seriously consider selling the debts like those to a firm who has the clout to chase this ongoing, and stick it in your terms that you do so.

 

[Deleted member 1779]

First of all.... many thanks guus for not giving me too much stick. I feel like a bit of a fool and broke all the usual business rules - jumping in with both feet and trusting this company.

But his pitch was so convincing.

He told me he had 12 reps on the road and their first order for just 15 Bathoom fitters kits at £750 had barely even dented his team. He said he had given each one a set as a sample and they were out in the field showing it off to some really big customers.

Next he called to say he had great news. One of his reps had secured a modest order for 30 sets at £1500 to a loyal customer of theirs. And then finally called and said he needed another 20 sets for a second rep who had managed to get a great trial order.

It all sounded logical and fine. The numbers seemed fine. But then he called and said he wanted a box of 100 sets. So thats when we put the brakes on him. We were suckered in such a short time!

TThen we had the sob story letter.... I told them to tell me who they had sold our kits onto and we would take over the debt - and also to return the reps sample packs. I think its probably all lies.

 

[thompsonbrown]

Sorry to here this case, and just before christmas.
I understand getting a large contract like this makes your 30 day T&C feel small in the big picture of what could have been.
Your not a fool for getting suckered in, these things happen.
I would put money on this never happening to you again.
Hope you get sorted out soon.

 

[Dan]

Don't let a firm be giving out your stock to other firms that aren't anything to do with your terms. If they'd have given out so many on a 30 day thing, you should have said wait until they've paid for their orders so you get payment before you give loads more out.

Hindsight though that I suppose.

Lesson learnt. If a firm is big enough to take so many orders, though shouldn't shy away from paying for them. If they want more stock quickly, they should have the cash in their bank to pay outstanding to release more stock to them.

Perhaps have a 30 day terms, but with customers newer than 12 months, you only give a max credit of £1000? Then once you've had a few months active trading you can assess whether to increase their credit limit?

 

[Deleted member 1779]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

I think I burnt myself on the first lesson of business.

1) Get a trading history going first before extending credit...

 

[Sean Kelly]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

Richard, sorry to hear about this situation, but must of us tilers do exactly the same. I can only speak for myself, but I will go into a persons home and tile their bathroom/kitchen. I will buy all the materials needed including expensive chrome trims and adhesive, hardibacker and ufh etc. One weeks work/materials I could be down £1200. The customer could easily turn round and say I'm not paying you. I could limit my exposure by collecting materials money up front, but I want the customer to trust me.

Your guy was clever by going in small and then asking for a bit more stock and then a bit more - very clever - he builds up a relationship with you and it is difficult for you to decline his request for just a few more items. You of course decline when the value of the stock gets too much.

You have to take a leaf out of easyjet's books. Every seat sold is paid for up front before the plane takes off. Easyjet (to my knowledge) do not give credit to anyone.

I read the word 'EXECUTION' from the solicitors letter - maybe that's the answer!

 

[Concrete guy]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

Having previously been caught in the same way Richard has (but for a lot more money). I had credit insurance, had also credit checked the firm and got the all clear from my bank. Yet I still got shafted.

I decided to set this business up differently, much in the way Sean suggests Easyjet work.

You pay - we deliver, we price accordingly. We operate no credit lines whatsoever, we pay for all our stock in full. No banks, no overdrafts, no credit accounts. We don't have to build cost of credit or defaults into the price of our goods.

Of course we have a few regular customers I've known personally for years to whom we'll deliver and they pay, but I trust them implicitly and the levels concerned are such that it wouldn't effect the business if it was late or defaulted.

There are two ways to look at this.

We restrict the size of our business operating in this manner. Retailers often cannot bankroll products, they exist on credit lines.

The upside however is we will never be compromised by bad debt.

The business world has changed, credit accounts should no longer be accepted as the norm, they are something that has to be earned.

 

[Dan]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

Well said.

 

[judge]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

Hope you get your money, these people deserve proper punishment for what they do

 

[Bubblecraft]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

Really sorry to hear that Richard. Hope you get your money back!!

 

[kilty55]

Re: Legal Court Case action in SCOTLAND - What you might not know abou

sorry but full payment upfront for all materials, dont care who they are i never trust anyone fully .

i know its a bit different to retail but people pull stunts all the time