Q: A tenant recently folded leaving my business with a significant amount of unpaid rent, so when a debt recovery firm contacted us and promised to collect the money within six months (or reimburse us via their insurance) we handed over £500 upfront. To date we have still to receive any money, what should we do?
Aug 18 2005
Answered by: Marc Barber Ask a question
You have, I’m afraid, got caught by some people who skate close to the line of what is within the law (if not cross it). Some debt recovery people will check out all the CCJs (county court judgements), for example, and then phone up the person owed the money to offer this sort of service, linked with the claims of an insurance policy. The charge seems to be always around this amount, because it is below the ‘cringe factor’. More than a few hundred pounds and you wouldn’t have dreamt of parting with your money until the service had been provided.
You know now that you shouldn’t have paid money up-front and that you can’t insure against something which has already happened. However, this doesn’t excuse these people who shouldn’t have mislead you. What you are now owed by them is too small to chase, given the diversion of your time, you may not succeed in getting it back and you may find that they don’t have the money. Having checked out the documentation you gave me the company name does not appear to be known at Companies House and the firm of accountants is not known by either the Chartered or Certified accountants. I also believe that these people are being investigated by the police.
What you should do know is contact your local Trading Standards Officer – visit www.tradingstandards.gov.uk for the number – and send copies of the documentation to them. If they have had more than one complaint they will follow it up; if not, they should send the documentation to the Trading Standards Officer which covers the debt recovery service. Hopefully, they will be able to put sufficient cases together to get a conviction. You may not get your money back, but you will help in getting these people put out of business so others won’t be fooled out of their money.
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