Bounced Cheque

hudo1968

Hi all, I'm wondering if anyone can help my friend. She runs a small business from home doing hair extensions. She is fully trained, certified and has full insurance. She also pays her tax!

The other week a lady came to have her hair done and at the end of the 3 hour treatment she pulled out her company cheque book and wrote out a cheque. She had not asked to do this at anytime and in hindsight my friend should have said no.

My friend then presented the cheque into the bank and you've guessed it she had the cheque returned with refer to drawer. She also noticed then that the Woman had post dated the cheque without telling her.

She spoke to the Woman who claimed that there had been fraud committed on her account and that she would pay directly into the bank. She has not.

She is now complaining that her hair is matting etc. Does anyone know where my friend would stand legally and where we can find out wether her business is trading as she claims.

Any help or advice is appreciated. My friend works very hard and does not earn a great deal from each client and also has to buy the hair in advance. She is very much out of pocket.

Thank you

paulofessex

I feel ChinaKat may be right, it sounds like the customer is planning to dispute the level of workmanship by your friend and demand she does not pay. Perhaps your friend may have to accept the loss however as ChinaKat mentions at the same time teaching the customer a harsh lesson

mountainofdebt

But wouldn't it also cost the OP's friend in bank charges to have a cheque continually bouncing?

As I see it the friend has two options:

1) Threaten legal action if cleared funds are received - and then she has to decide whether or not to proceed with legal action through the small claims court i.e whether or not to call the woman's bluff or

2) Write the sum off and consider it a lesson learned and only deal in cash.

jexygirl

If she is a registered buisness, I think its Companies House that hold information on every company in the country, and its accounts etc. Check out their website, all the information is public. http://www.companieshouse.gov.uk/toolsToHelp/findCompanyInfo.shtml

I think the fact that she paid by cheque AND post dated it, shows she had no intention of paying at all. Is the buisness a public one, can she go in and see the client? Or as suggested, write to her stating that if the funds are not paid in full in cash, then she will have no option but to pursue legal advice, sometimes that works.

I think her saying she is not happy now, is immaterial, she has gotten free extensions that she never intended to pay for, and is probably hoping your friend will just drop it if she says she isnt happy with them. She should have paid in the first place regardless. If she then wasnt happy, she could have contacted your friend to sort it out.

I hope she manages to sort it out, and from now on, she needs to tell all clients that she only accepts cash, prior to even starting. She can always say that the bank charge her to cash cheques on a buisness account.

magpiecottage

Sounds like an offence has been committed under S11 of the Fraud Act 2006.

fengirl_2

This was a personal service to the client - it does not matter that she paid with a company cheque. Write and ask for cash within 7 days or she will be taken to the small claims court.
If the client wishesto counter-claim for poor workmanship, then let her!

YEOVILGOM

As fengirl says the good thing (if you can consider a bounced cheque to be good) is that your friend can take action against both the individual who received the service and the limited company who issued the cheque

Drop me a PM with the company name and I will do a credit check for you. The other big question is how much is involved?

hippyadam

magpiecottage wrote: »

Sounds like an offence has been committed under S11 of the Fraud Act 2006.

Probably, but proving it is another matter. Oh and the old bill wont drag themselves out for a "business" matter or an amount this small....

On the plus side the only defence to a bounced cheque if you go the small claims route is fraud, if you witnessed her sign the cheque in question you should have no issue!

laurel7172

This won't help get your friend's money back, but if she's paying for personal haircuts with company cheques, does the taxman know?

I ask that because it's perfectly legal if it's declared (and the proper taxes are paid), but capable of triggering a tax investigation if it isn't. Tax investigations are the opposite of fun.

As a concerned citizen, your friend could always pass on the details of the transaction to the tax authorities. Don't make any allegations of fraud, though, because you don't know if it is....

hippyadam

laurel7172 wrote: »

Tax investigations are the opposite of fun.

:rotfl:that is very true...

martindow

Are we jumping to conclusions about this being a limited company? A sole trader would have cheque book with the trading name printed on it - many people would describe this as a company cheque book.

Maybe your friend should only accept cheques where there is a guarantee card.