Debt collector agency T&Cs

rymo

Hello,

I have requested the services of a debt collection agency to recover money that a business owe me. They sent to the owner of the business the usual letters and texts and made some phones calls but unfortunately it did not work. They now offered me additional services at quite expensive charge and I have decided to terminate the contract as it is not worth to pay the amount they are asking for these services and I think I will bring the debtor to court. Before giving them notice I was reading the T&Cs of the agency and I was surprise to read the following under the Payment section:

1) The client will pay the agency Commission on Monies recovered at a rate of 15%

2) Agency's cost and commission are payable:

    2.1) on the amount of any payment made within 4 months of the termination of this agreement

    2.2) on the amount of any payment made in accordance with an agreement and the debtor where such agreement was made prior to the date of termination or within 4 months thereafter

 

So, if I have understood it correctly, if I will recover my money within 4 months from the termination date of the agreement with the agency, I will still have to pay the agency 15% despite the fact they have not been able to recover anything. Is it correct?  How is it possible that they can claim money for doing nothing? It looks to me a sort of extortion.

Any suggestion is welcome.

Many thanks,

Ryan

retiredbanker1

.............Because you signed up for those terms?

MorningcoffeeIV

It's not extortion.  That's something very different.

It's a common term in such types of contract.

born_again

Are you a business or a private individual?

But the time to read T/C is before you sign up. 

Asked for this to be moved as nothing to do with Credit Cards.

rymo

Thanks for the replies.

I am an individual and yes I signed the terms but when I discussed their services they only explained me about the 30 days noticed to terminate the contract, this clause was not mentioned to me and then they sent me the contract with 3 pages of T&Cs written in quite small fonts. I just did not notice this section. I wanted to understand whether it is a common practice for debt collection agencies as I never used them before and from one of the replies it seems to be, but I find it very unfair. If it is a normal practise then it is far too easy for debt collection agencies to earn money without doing anything. They basically offer you an initial basic package on no win-no-fee terms or very low price, and I doubt that the actions part of this package would bring much results as these are normally phone calls, text, emails and letters. Once they have exhausted this possibility, they offer you a set of very expensive services and if you reject their services and want to terminate the contract they can still earn 15% or more just doing nothing for the following 4 months... If this is fair... something to bring to the attention to the FAC or whoever regulates this business.  Never mind, I will still go ahead with my plan to bring the debtor to court but will make sure resolution of the case will happen 4 months after termination of this contract.

Regards,

Ryan

MattMattMattUK

It seems odd you have gone to "a debt collection agency", the first action would be chasing it yourself, then obtain a CCJ, followed by escalating to High Court Enforcement from there.

soolin

MattMattMattUK said:

It seems odd you have gone to "a debt collection agency", the first action would be chasing it yourself, then obtain a CCJ, followed by escalating to High Court Enforcement from there.

This is out of my field of knowledge but I was also surprised that the usual court path wasn’t attempted first. 

OP was there a reason why you started with an expensive debt collector before exhausting the court process?