Lesson 1, Topic 1
In Progress

1.5. Keeping track of your customers

ryanrori January 23, 2021

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Regular contact with your existing customers, particularly those with outstanding debts, will mean that you quickly become aware if a debtor relocates. Do not just issue invoices to customers and wait for their payment to arrive! Contact them by phone to enquire politely whether your invoices have been received, and in doing so, you can verify that the address and telephone details you have are still accurate.

Further information can be gained from your delivery operations. Ask your delivery staff to alert you to anything suspicious about the way goods or services are delivered e.g. whether or not the customer insists on collecting the goods, without adequate verification of their trading addresses.

Remember, the longer you leave an overdue debt, the more difficult it becomes to recover, and the more likely you are to find yourself in a situation where the debtor is not contactable.

Practical steps to tracing debtors

If a letter is returned via Royal Mail marked ‘Addressee Not Known’ or ‘No longer at this Address’, NEVER ASSUME that this is actually the case as many practised debtors simply return a letter as ‘Gone Away’ to give themselves more time. 

Start by taking the following steps:

  • Double check your own information to see if you have misspelt or made any errors on the original information. If you identify an error, reissue your invoice immediately using the correct address details.
  • Dial telephone numbers and re-check via a directory-enquiry facility to ensure that you have the correct telephone number.
  • Try a recorded delivery letter as this may be accepted and thus confirm occupancy

Here is what the state says the validation of debts is.

Validation of Debts

  1. It shall constitute an unfair or deceptive act or practice for a creditor to fail to provide to a debtor or an attorney for a debtor the following, within five business days after the initial communication with a debtor in connection with the collection of a debt, unless the following information is contained in the initial communication or the debtor has paid the debt:
    • The amount of the debt;
    • The name of the creditor to whom the debt is owed;
    • A statement that unless the debtor, within 30 days after receipt of this notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the creditor; and
    • A statement that if the debtor notifies the creditor in writing within 30 days after receipt of this notice that the debt, or any portion thereof is disputed, the creditor will obtain verification of the debt and provide the debtor, or any attorney for the debtor, additional materials described in subsection (2) of this section.
  2. If the debtor, or any attorney for the debtor, notifies the creditor in writing within the 30-day period described in subsection (1) of this section, that the debt, or any portion thereof, is disputed, the creditor shall cease collection of the debt, or any disputed portion thereof, until the creditor verifies the debt and provides the debtor, or any attorney of the debtor, by first class mail, the following materials:
    • All documents, including electronic records or images, which bear the signature of the debtor and which concern the debt being collected;
    • A ledger, account card, account statement copy, or similar record, whether paper or electronic, which reflects the date and amount of payments, credits, balances, and charges concerning the debt, including but not limited to interest, fees, charges or expenses incidental to the principal obligation which the creditor is expressly authorized to collect by the agreement creating the debt or permitted to collect by law;
    • The name and address of the original creditor, if different from the collecting creditor; and
    • A copy of any judgment against the debtor.