Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • tekton23
    • By tekton23 14th Jun 17, 10:17 PM
    • 74Posts
    • 14Thanks
    tekton23
    Client won't pay fee fairly due, what can be done?
    • #1
    • 14th Jun 17, 10:17 PM
    Client won't pay fee fairly due, what can be done? 14th Jun 17 at 10:17 PM
    Hi,

    We are a small biz and are having issues with a client that won't pay the full amount due. We are a professional design company. We wrote in advance to notify the client of an increased fee that would be due for further work they had requested. They were annoyed by this and terminated all of our services. They did this without the chance to discuss the situation and without explanation. We had however already undertaken several days of design work, under our original appointment.

    They have offered to pay us around 20% of what we believe is due, in fair payment for the work we have done.
    What do we do? Who can judge this fairly and how do we get paid fairly for the time we have spent on this?
    Is there a way to resolve this quickly and with minimal disruption to ourselves? We'd like to focus on more positive work and not have to spend time chasing this debt!

    Thanks in advance,

    T23
Page 1
    • angryparcel
    • By angryparcel 14th Jun 17, 11:05 PM
    • 910 Posts
    • 520 Thanks
    angryparcel
    • #2
    • 14th Jun 17, 11:05 PM
    • #2
    • 14th Jun 17, 11:05 PM
    Hi,

    We are a small biz and are having issues with a client that won't pay the full amount due. We are a professional design company. We wrote in advance to notify the client of an increased fee that would be due for further work they had requested. They were annoyed by this and terminated all of our services. They did this without the chance to discuss the situation and without explanation. We had however already undertaken several days of design work, under our original appointment.

    They have offered to pay us around 20% of what we believe is due, in fair payment for the work we have done.
    What do we do? Who can judge this fairly and how do we get paid fairly for the time we have spent on this?
    Is there a way to resolve this quickly and with minimal disruption to ourselves? We'd like to focus on more positive work and not have to spend time chasing this debt!

    Thanks in advance,

    T23
    Originally posted by tekton23
    It goes with the territory i am afraid, i am in the IT and hosting business and get issues like this all the time, prices increase you inform clients and you get some in a stroppy mood. i know its not good but maybe ask them to pay 30% then you block them and then file a report on fraudrecord
    Last edited by angryparcel; 15-06-2017 at 10:09 AM.
    • Savvy_Sue
    • By Savvy_Sue 15th Jun 17, 1:05 AM
    • 37,823 Posts
    • 34,216 Thanks
    Savvy_Sue
    • #3
    • 15th Jun 17, 1:05 AM
    • #3
    • 15th Jun 17, 1:05 AM
    What's in your original contract with them about termination and paying for work already done and adding 'extras' to the contract?
    Still knitting!
    Completed: 1 adult cardigan, 3 baby jumpers, 2 shawls, 3 pairs baby bootees,
    1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 1 seaman's hat ...
    Current projects: 1 shawl, another seaman's hat
    • CKhalvashi
    • By CKhalvashi 15th Jun 17, 7:59 AM
    • 8,768 Posts
    • 24,794 Thanks
    CKhalvashi
    • #4
    • 15th Jun 17, 7:59 AM
    • #4
    • 15th Jun 17, 7:59 AM
    It goes with the territory i am afraid, i am in the IT and hosting business and get issues like this all the time, prices increase you inform clients and you get some in a stroppy mood. i know its not good but maybe ask them to pay 30% then you block them and they file a report on fraudrecord
    Originally posted by angryparcel
    Looks like a site that could be bordering on illegal.

    You can't create blacklists of customers that may stop the customer doing business, especially if the customer isn't aware they are included on the database and doesn't have the right to request removal of the information.
    "I kada sanjamo san, nek bude hiljadu raznih boja" (L. Stamenkovic)

    Call me Remainer or Romaniac, but not Remoaner. It's insulting and I have the right to have my voice heard too.

    I can spell, my iPad can't.
    • angryparcel
    • By angryparcel 15th Jun 17, 10:17 AM
    • 910 Posts
    • 520 Thanks
    angryparcel
    • #5
    • 15th Jun 17, 10:17 AM
    • #5
    • 15th Jun 17, 10:17 AM
    Looks like a site that could be bordering on illegal.

    You can't create blacklists of customers that may stop the customer doing business, especially if the customer isn't aware they are included on the database and doesn't have the right to request removal of the information.
    Originally posted by CKhalvashi
    you can block them from ordering or using your own website.
    Fraudrecord is a legal recognised site were you can check of those you have fraudulently signed up to web hosting and web design services

    https://www.fraudrecord.com/
    • paddyrg
    • By paddyrg 15th Jun 17, 12:09 PM
    • 13,079 Posts
    • 11,141 Thanks
    paddyrg
    • #6
    • 15th Jun 17, 12:09 PM
    • #6
    • 15th Jun 17, 12:09 PM
    Go back to your contracts. If it's not covered in your contracts, work out what is outstanding and invoice for it. They can refuse to pay. You can then take them to court.

    Courts are who gets to decide what's fair.
    • CKhalvashi
    • By CKhalvashi 15th Jun 17, 6:26 PM
    • 8,768 Posts
    • 24,794 Thanks
    CKhalvashi
    • #7
    • 15th Jun 17, 6:26 PM
    • #7
    • 15th Jun 17, 6:26 PM
    you can block them from ordering or using your own website.
    Fraudrecord is a legal recognised site were you can check of those you have fraudulently signed up to web hosting and web design services

    https://www.fraudrecord.com/
    Originally posted by angryparcel
    It's regulated in Turkey, there's no ICO number and there are people on other sites advising others to hide the existence of the site. I note from the terms of the website, there is a transfer of information outside of the EEA.

    It seems the sole purpose of the site is to safeguard companies that don't have the interests of the public at heart, by allowing any member the ability to 'blacklist' a customer without appropriate safeguards around how that data is processed, with no fair right of appeal. This could damage the interests of consumers and small businesses.

    I have therefore reported the matter to the ICO, as I feel consumers may not be treated fairly and it's a matter within their remit. Thank you for bringing the matter to my attention.
    "I kada sanjamo san, nek bude hiljadu raznih boja" (L. Stamenkovic)

    Call me Remainer or Romaniac, but not Remoaner. It's insulting and I have the right to have my voice heard too.

    I can spell, my iPad can't.
    • angryparcel
    • By angryparcel 15th Jun 17, 8:10 PM
    • 910 Posts
    • 520 Thanks
    angryparcel
    • #8
    • 15th Jun 17, 8:10 PM
    • #8
    • 15th Jun 17, 8:10 PM
    It's regulated in Turkey, there's no ICO number and there are people on other sites advising others to hide the existence of the site. I note from the terms of the website, there is a transfer of information outside of the EEA.

    It seems the sole purpose of the site is to safeguard companies that don't have the interests of the public at heart, by allowing any member the ability to 'blacklist' a customer without appropriate safeguards around how that data is processed, with no fair right of appeal. This could damage the interests of consumers and small businesses.

    I have therefore reported the matter to the ICO, as I feel consumers may not be treated fairly and it's a matter within their remit. Thank you for bringing the matter to my attention.
    Originally posted by CKhalvashi
    fraudrecord does not blacklist anyone, if a client does not pay you or fraudulently signs up for your services then you can add their details to their database so other can check before accepting orders from these fraudsters.
    In the hosting and web design business it is one of the major fraud prevention resources.
    • angryparcel
    • By angryparcel 15th Jun 17, 8:18 PM
    • 910 Posts
    • 520 Thanks
    angryparcel
    • #9
    • 15th Jun 17, 8:18 PM
    • #9
    • 15th Jun 17, 8:18 PM
    with no fair right of appeal. T
    Originally posted by CKhalvashi
    Anyone can be removed
    https://www.fraudrecord.com/removal-process/

    ICO wont do anything as the Data Protection Act is only for UK businesses
    Last edited by angryparcel; 15-06-2017 at 8:21 PM.
    • angryparcel
    • By angryparcel 15th Jun 17, 8:35 PM
    • 910 Posts
    • 520 Thanks
    angryparcel
    It's regulated in Turkey, there's no ICO number and there are people on other sites advising others to hide the existence of the site. I note from the terms of the website, there is a transfer of information outside of the EEA.

    It seems the sole purpose of the site is to safeguard companies that don't have the interests of the public at heart, by allowing any member the ability to 'blacklist' a customer without appropriate safeguards around how that data is processed, with no fair right of appeal. This could damage the interests of consumers and small businesses.

    I have therefore reported the matter to the ICO, as I feel consumers may not be treated fairly and it's a matter within their remit. Thank you for bringing the matter to my attention.
    Originally posted by CKhalvashi
    This is the point behind fraudrecord
    https://www.fraudrecord.com/api/?showreport=a8d93c2251d621c5
    would you want this person as a customer and ordering your products, so they can spam people and set up phishing websites
    This is the details they tried to sign up to my business with ( clearly false)
    First Name Ganna
    Last Name Sovgut
    Company Name DMASTERPIECE
    Email Address DM@GMAIL.COM
    Address 1 JL SYNTAX ERROR
    Address 2 JL SYNTAX ERROR
    City DM
    State/Region Arizona
    Postcode 404404
    Country US - United States
    Phone Number 086969696969
    • tekton23
    • By tekton23 15th Jun 17, 10:05 PM
    • 74 Posts
    • 14 Thanks
    tekton23
    Thanks for your replies! In our contract, either party can terminate. If the client terminates then we are due any fees 'properly due'. We estimate this at about 60 hours work, the client says this is actually around 10 hours. We disagree with that and don't think they can fairly judge this. Should we just invoice, or go to court or a debt collector or other options?
    • angryparcel
    • By angryparcel 15th Jun 17, 10:13 PM
    • 910 Posts
    • 520 Thanks
    angryparcel
    Thanks for your replies! In our contract, either party can terminate. If the client terminates then we are due any fees 'properly due'. We estimate this at about 60 hours work, the client says this is actually around 10 hours. We disagree with that and don't think they can fairly judge this. Should we just invoice, or go to court or a debt collector or other options?
    Originally posted by tekton23
    before going to Court or Debt Collection you would need to have invoiced them, so you have an invoice on record. i would send them an invoice with a 7 day due date, so giving them 7 days to pay. then if you google search Express Debt Collection, then will pursue the debt on a no collect no fee basis. i use them all the time
    • tekton23
    • By tekton23 16th Jun 17, 5:13 PM
    • 74 Posts
    • 14 Thanks
    tekton23
    Hi,

    Thanks for your reply. I am slightly hesitant about using a debt collection service, due to damage to our reputation. Perhaps I shouldn't be, as we deserve to be paid fairly!

    We have been asked by the clients to itemise the hours of work undertaken to date. The contract we have, states that this is only necessary if charging on an hourly basis. We are not. We have a fixed fee agreement for workstages.

    To provide this itemised breakdown would take further hours of work, with no guarantee that we'd actually be paid. I believe it might be an attempt to prolong the process in the hope we just give in. Should we provide this itemised account of time spent? Or just invoice now.

    Given that they have offered such a low amount previously, there is no suggestion to me that they would be a fair judge of the itemised breakdown if we do give it to them. I also don't see how someone outside our industry would know how long the services we have provided would take. So how are they in a position to judge this?

    Thanks,

    T23
    • 00ec25
    • By 00ec25 16th Jun 17, 7:42 PM
    • 5,353 Posts
    • 4,697 Thanks
    00ec25
    put yourselves in their position....

    they want to know what they are being asked to pay for. Not unreasonable therefore to request a breakdown of the sum

    of course if your contract is priced expressly in "whole" work stages and you can evidence that you have completed however many stages you are billing for, then that is the basis of your claim and a breakdown could be refused
    • ComicGeek
    • By ComicGeek 17th Jun 17, 9:49 AM
    • 243 Posts
    • 189 Thanks
    ComicGeek
    Emotion shouldn't come into business decisions, but it's sounds like your client made a rash emotional decision to cancel the contract. Don't make the same mistake.

    It takes time to chase through courts etc, even using the money claim online system. Much better to come to a compromise if you can, and chalk it up to experience.

    We have had to take a number of clients to court over the years - we've won all cases, but haven't been to recover all money. Sometimes you have to step back and not allow it to affect your business, despite how much you feel that you're in the right.
    • paddyrg
    • By paddyrg 17th Jun 17, 11:42 AM
    • 13,079 Posts
    • 11,141 Thanks
    paddyrg
    If at all possible settle out of court as it just soaks up time.

    Calculating ACTUAL hours, even if not in your contract sounds like a fair step towards reconciliation. Estimated hours are simply unfair and a court will also probably say so. Quantity your loss precisely.
    • FatVonD
    • By FatVonD 21st Jun 17, 12:56 AM
    • 4,948 Posts
    • 19,593 Thanks
    FatVonD
    I agree you need to bill them according to the stage in the process you had worked up to.

    As a designer myself I would say it's going to be fairly impossible to give them an hourly break down, how do you, for instance, bill them for your thinking time?
    Make £5 a day in November £36.28/£150 (October £288.52, September £374.30, August £223.95, July £71.45, June £251.22, May£119.33, April £236.24, March £106.74, Feb £40.99, Jan £98.54)
    • Vectis
    • By Vectis 21st Jun 17, 6:09 AM
    • 462 Posts
    • 565 Thanks
    Vectis
    Hi,

    Thanks for your reply. I am slightly hesitant about using a debt collection service, due to damage to our reputation. Perhaps I shouldn't be, as we deserve to be paid fairly!

    We have been asked by the clients to itemise the hours of work undertaken to date. The contract we have, states that this is only necessary if charging on an hourly basis. We are not. We have a fixed fee agreement for workstages.

    To provide this itemised breakdown would take further hours of work, with no guarantee that we'd actually be paid. I believe it might be an attempt to prolong the process in the hope we just give in. Should we provide this itemised account of time spent? Or just invoice now.

    Given that they have offered such a low amount previously, there is no suggestion to me that they would be a fair judge of the itemised breakdown if we do give it to them. I also don't see how someone outside our industry would know how long the services we have provided would take. So how are they in a position to judge this?

    Thanks,

    T23
    Originally posted by tekton23

    If you really do have in your contract that you will be paid a definite amount at a definable stage of the work then you should be ok. If however you simply have stage payments (e.g. monthly) then you may well be expected to itemise the hours worked to date.

    If you don't, as you say, want to spend any time on this then send an invoice and, if you don't get paid on time, a letter before action, then MCOL.
    • nomoneytoday
    • By nomoneytoday 21st Jun 17, 1:14 PM
    • 4,720 Posts
    • 2,849 Thanks
    nomoneytoday
    How far apart are your invoice and their offer amounts in real money rather than percentages?
    How long could would it take you to earn the same amount using your resources on new jobs, as opposed to chasing a soured relationship?
    • 2bFrank
    • By 2bFrank 23rd Jun 17, 11:18 AM
    • 193 Posts
    • 100 Thanks
    2bFrank
    Unfortunately as a freelance developer I get this now and again as well. I simply invoice for the time I have already spent, I itemise the invoice for each day and include a timesheet as well, which shows exactly which component or design I worked on and for how many hours.

    If they refuse to pay after the time given on the invoice, then its a letter before action and court. I've only been to court once, and was found in my favour, which was helped by my contract and the timesheets.

    My worry with you however is you state you spent several days on the project and charging 60 hours. To reach that at least two of you must have been working flat out for 4 days on the project. What was you designing for that? The court would definitely question this. It will definitely help to demonstrate the work you have already done to the court (concepts, research, first/ second drafts etc) and explain how many hours it took.
    Jumping into the housing market head first.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,143Posts Today

9,159Users online

Martin's Twitter