Bounced Cheque

designproduction

hudo1968 wrote: »

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

How our business would approach this.

Step 1. Reminder letter - asking customer to pop in and make a payment.
Step 2. After 7 days, write another letter quoting 'you have failed to reply to previous correspondence. please forward a payment within the next 7 days, otherwise i will have no alternative but to pass this on to our debt recovery dept'. If you are in financial difficulties, please call us and we can work out a payment plan. Do not ignore this letter.
(At this stage, the customer will make contact and say that it was bad workmanship & she is not paying)
Step 3. Go to your nearest court. Talk to court usher and pick up a small claims form.
Step 4. Write to customer & say that you are disappointed with her reply, as she was perfectly happy when she left your shop, her hair looked great and at no time did she complain to a staff member.
You then accepted our workmanship and paid us by company cheque. Unfortunately your cheque bounced. It is fraud to pay by cheque without having money in your bank account. Please dispatch payment within the next 7 days. Post letter with a 'photocopy' of small claims form.
** Note: Step 1-4 The plan is about using time to your advantage, Your have now built a strong foundation for a court case. By looking reasonable, helpful, but politely asking for your money & trying to resolve the situation.
Step 5. Submit your small claims form to court, costs approx £ 40, i think! If you win, she will have to pay your costs, plus interest. (Don't bother to take a solicitor, just state your case clearly!)
(Important: If you win & customer does not pay, then apply to the court collections dept for them to collect payment on your behalf. If used to cost bout £ 60. The advantage is the court bailiffs have a lot of power & will collect for you with the costs).
(above all - it's a slow process, you will win, but between steps, try and get on with business and not think about it.)

designproduction

Additionally, you almost certainly will win in court. Your argument is the customer accepted your workmanship and paid for it by company cheque. If your workmanship was not acceptable, then your customer should of refused to pay for her hair immediately after completion and stated the reason why. However she did not and you found out later that the cheque was not paid - insufficient funds.
Note: Don't be afraid of the steps 1- 5 and also the court process. Take emotion out of it and think of yourself as a third parties just trying to resolve the situation.
Final Tip: remember all correspondence in writing....build a case..

Savvy_Sue

designproduction wrote: »

If your workmanship was not acceptable, then your customer should of refused to pay for her hair immediately after completion and stated the reason why.

One slight flaw in this: would you know that the work was poor quality at the time? I don't know, I've never had any, but might the counter argument be "It was OK at the time but within a few days they were matting."

Only suggesting that the OP prepares for this. Maybe alter the letter at step 4 to say that if there has been any problem then they really need to call in for a discussion, but that you were surprised to hear there had been.

tripled

If the person has no money, you may not get much persuing them through court. Personally I would do it anyway, because I'm bloody minded, but it's something that needs to be taken into account.

DavidP24

The thing to do is to make sure that this person knows that paying you is going to be easier than not. She made no complaint at the time and all hair matts and it may be the shampoo or other treatment (e.g. swimming).

Find her company name, find her web presence, use Google sidewiki to list her as a bad debt payer.

Register a domain in a similar name to her business and blog your experience of her being careful to still to to the facts.

Moderate comments to the blog and invite others to comment on their experience with her and her business.

Don't get mad, get even.

My dad used to have a business where someone did this regularly, they were very rich and owned a high street chain.

He framed their bounced cheque for all new customers to see. Word got back and they settled. He did not have the internet.

Suggest you also take her to small claims court, it will cost £40 but you can ask for costs. Give her a warning letter warning with 14 days notice and you will get costs if she does not dispute.

If the cheque is in the name of a limited company issue a statement of the original invoice plus interest. Give a warning that you do not offer credit terms and charge whatever you want in interest.

Then issue a letter saying if she does not pay you will be taking legal and other options open to you. Then issue a winding up order, if she does not dispute it her company is finished.

martindow

DavidP24 wrote: »

Suggest you also take her to small claims court, it will cost £40 but you can ask for costs. Give her a warning letter warning with 14 days notice and you will get costs if she does not dispute.

If the cheque is in the name of a limited company issue a statement of the original invoice plus interest. Give a warning that you do not offer credit terms and charge whatever you want in interest.

Then issue a letter saying if she does not pay you will be taking legal and other options open to you. Then issue a winding up order, if she does not dispute it her company is finished.

Not sure if all of this is true. My understanding is that you cannot ask for costs if the claim is under 5000 apart from adding the court fee to your claim.

Neither do I think you can charge "whatever you like" as interest. You can charge statutory interest at 8.5% I believe.

GiveItBack

I'd go down designproduction's route, or invite her back so she can have a look at the problematic hair, and then remove all the extensions. but that's just petty and time consuming.

BLT_2

Put loads of stuff in free ads saying 'Grateful if Mrs xxxxx could contact me with regards to her bounced cheque, and then send copies of the papers to her house

greenface

BLT wrote: »

Put loads of stuff in free ads saying 'Grateful if Mrs xxxxx could contact me with regards to her bounced cheque, and then send copies of the papers to her house

This is what i honestly would do great advice . Also if she is well known and as a reminder to others that you only accept payment by your agreed terms put a notice next to the mirror and sinks saying Due to the fact Mrs XXXXXXX from xxxxxxx bounced her cheque and has ruined it for all i now accept cash/card etc. A A4 information into a car and park it close to the persons home/kids school workplace gym etc.

Even if you didnt get your money back people would know what type of person she is.

hippyadam

Sorry but nearly all of that advice is next to useless, or even worse opening the OP up to some serious legal ramifications!

DavidP24 wrote: »

Find her company name, find her web presence, use Google sidewiki to list her as a bad debt payer.

If she's listed, and if its not a personal debt that might be useful. But it sounds like she paid for a personal service through her company... So its still a personal debt!

DavidP24 wrote: »

Register a domain in a similar name to her business and blog your experience of her being careful to still to to the facts.

Libel means the OP would have to prove the claims, not be disproved by the other party. If they cant prove it say hello to a claim for libel and considerable costs!

DavidP24 wrote: »

Moderate comments to the blog and invite others to comment on their experience with her and her business.

Again, moderating comments actually makes it easier to claim for libel than not moderating them! Even if you only correct spelling!

DavidP24 wrote: »

My dad used to have a business where someone did this regularly, they were very rich and owned a high street chain.

He framed their bounced cheque for all new customers to see. Word got back and they settled. He did not have the internet.

In fairness that's a funny idea

DavidP24 wrote: »

Suggest you also take her to small claims court, it will cost £40 but you can ask for costs. Give her a warning letter warning with 14 days notice and you will get costs if she does not dispute.

The court will award your fixed costs on successful judgement, still doesn't guarantee they will pay! If you have legal bills of £2k you can not recover them in a small claims action!

DavidP24 wrote: »

If the cheque is in the name of a limited company issue a statement of the original invoice plus interest. Give a warning that you do not offer credit terms and charge whatever you want in interest.

Nope, unless its in your terms & conditions that you can charge any interest you like, and they have been signed by the client you are limited to 8% above the Bank of England base rate. So at the moment its 8.5%

DavidP24 wrote: »

Then issue a letter saying if she does not pay you will be taking legal and other options open to you. Then issue a winding up order, if she does not dispute it her company is finished.

A winding up order? Are you mad?? To issue winding up proceedings costs £1500 to £2000 MINIMUM! And if there is even a whiff of any kind of dispute it will get thrown out!

For the love of jeebus, dont do any of those things. Write to her giving 14 days to pay or you will begin county court proceedings. No payment, go to https://www.moneyclaim.gov.uk to begin proceedings online.