Nichola Caddy

Nichola Caddy

No matter how frustrated we get at the people who owe us money, when it comes to debt collection you must be careful you do not defame your debtor.

As you know being owed money comes with a myriad of emotions and the tendency to voice opinions about the person who owes you money.  Whilst I understand the obvious need to vent frustration it can come to the point where you may be defaming that person.

So what exactly is defaming a person?

Well you have defamed a person if you make statements about them that

  • Could lower the persons' reputation in the eyes of ordinary members of the community
  • Leads people to ridicule avoid or despise the person
  • Injurer’s the person’s reputation in business, trade or profession

A defamatory statement can be verbal or written.  The statement must be published or made known to other persons other that the person being defamed. Defamation includes talking about that person in conversations with other people, writing about the person in articles, on websites, through email or other communication.

Even a private conversation in a pub or restaurant could be overheard and result in defamation proceedings.

To defame a person they must be living.

All parties to any publication as explained above that defames a personise liable for the defamation, not just the author. This means that if you receive an email or letter that includes defamatory information and forward or distribute it, you can be sued as well as the author.

Just remember, you never know where an email may end up. If you have defamed a person you may be liable for damages (money), however if you can prove the defamatory information is substantially true you can’t be liable.  Although in this case you may want to make sure your defense is watertight.

No matter what you must be careful you do not defame your debtor.

Monday, 10 July 2017 15:54

Money Smart

I am always on the lookout for good resource to help people with their finances and businesses in general and just lately I have found myself repeatedly going to a government website called Money Smart. (https://www.moneysmart.gov.au/)

The website is not actually business focused it is more for consumers, but it has so much great information that I feel it could benefit everyone.

I hope that I am not telling you to suck eggs and that you already know about this site, but it’s really good. There are tonnes of information about borrowing money and managing finances, there are also some excellent calculators for budgeting, retirement planning and of course managing debt.

It is geared up for all ages and the planners are excellent

It is geared up for all ages, and the budgeting planner is awesome, I also did the retirement plan to see what was in it. It’s very good and it made me think about a lot of things. It’s probably its worth doing at any age.There is plenty of fantastic information on obtaining credit and borrowing money and if you haven’t obtained a loan before there is information about the National Credit Act and plenty of links to more info.

There is also information about what to do if you are having trouble with paying your debts and how to handle debt collectors.

As you go through the website and it explains the different aspects of managing your money it gives excellent case studies that are easy to read and understand.

I believe this site is a must read for young people, especially those wanting to borrow money to buy a car or obtain a credit card.

The budgeting should be taught in school, in fact, I think the whole website should be part of the curriculum.

A number of young people we see in our business who have car loans and credit card debt they cannot afford is unbelievable, some simple training on budgeting could have saved them a lot of pain.

 https://www.moneysmart.gov.au/

If you supply a trade or service on credit, such as 7, 14 or 30-day payment terms, you need an effective contract to protect yourself from disputes and people who don't pay or pay late.

In the many years of running BCA Debt, we have observed five common mistakes businesses make! By changing these five mistakes, you can prevent your customers from becoming debtors and increase your cash flow.

5 Common Mistakes Businesses Make;

  1. Business does not have clear credit management policies.
  2. The quoting process does not clearly define the outcomes of the job, for both the service provider and the customer.
  3. Not knowing exactly who the customer is, and the exact name of the person paying the bill.
  4. The terms and conditions are written in a too smaller font, making them difficult to read.
  5. There is no disputes resolution outlined, for both business and the customer.

Not having good Terms and Conditions is a common mistake.

Your 'Terms and Conditions' should be the single most important document you create for your business? The words Terms and Conditions should bring to your attention just how important these documents are; they can set the direction for any business deal you enter, be it good or bad.

Your Terms and Conditions are the rules of your business.

If you have ever experienced any of the following in your business, then it may be time to assess your Terms and Conditions.

      1. Not being paid on time
      2. Customer complaining about your service
      3. Staff taking shortcuts
      4. Disputes caused by negligence
      5. Not being paid for the job you have done

Many businesses hope their bookkeeper, admin staff, or accountant will fix these problems, but they are not experts in the field.

The Blue Print

Your Terms and Conditions are the blueprints of how your business operates, you, your staff and customers should intimately understand every aspect of them, this is how you prevent deals from going bad. 

The reason I say this is because the majority of problems experienced during disputes and conflicts between a business and a customer are that there is no clear understanding of each other’s responsibility when entering a business deal. Often neither party is clear on the expectations of the job because the Terms and Conditions are not clear, or simply do not exist.

Daunting Solicitor Jargon

We understand that creating these documents is a very daunting proposition because most of the Terms and Conditions we have seen are in solicitor jargon, in a font that makes you feel they have sinister overtones. 

Making it difficult to decide what is best for your business. These Documents are Important so don’t let all the jargon, small writing, and deception put you off. With a little effort, we can help you produce user-friendly Terms and Conditions for your business. 

The simplest way to get started is to brainstorm all the things that frustrate you, both in-house and from your customers. 

Put these together with your payment requirement and you have the beginnings of a good document that will help prevent customer becoming a debtor.

Fewer Disputes - Who wouldn't want that? We know that once a client has good Terms and Conditions in place they are less likely to experience disputes and non-payment.

We offer this program for individual businesses; it covers the credit management Policies, Terms and Conditions and much more. It will assist you in preventing your customers from becoming debtors and help to solve the problems listed above.

The Credit Management Toolbox

The credit management toolbox is a comprehensive suite of documents and policies custom designed for your individual business. If you supply a trade or service on credit, such as 7, 14 or 30-day payment terms, you need an effective contract to protect yourself from disputes and people who don't pay or pay late!

The credit Toolbox is for smart business people who want to move to the next level of professionalism and who are sick of customer disputes. It is for businesses that don't have any formal documentation and wish to put in place best practices.

We have seen just about every trick in the book.

That is the reason we have produced a Suite of documents for the Credit Management Toolbox.

At BCA Debt, many of the debts that come to us could be avoided if the business has in place the Toolbox we are offering.

Why Risk Loss of Income?

Why risk any further loss of income and more financial pain? Could you be missing the essential elements all successful businesses use to safeguard their finances?

The really bad news is that your late payers are using your money while you may suffer cash flow problems. Let me help you create simple policies that your staff is empowered to use when quoting and accepting a new customer.

I can help you be clear on your terms and conditions, by writing in plain English, easily understood by you and your customers, including clearly defined dispute resolution processes.

Let's include clauses that put the cost of debt collection back onto the customer if they fail to pay you.

If you want to know the honest truth of how to prevent debts, the secret is in the use of these proven strategies.

To move to the next level of business professionalism and implement your debt prevention strategy simply fill out the purchase form for the Credit Management Toolbox and start managing your business the way other successful businesses including many of our clients have done.

5 Common Mistakes Businesses Make

1.   Business does not have clear credit management policies.

2.   The quoting process does not clearly define the outcomes of the job, for both the service provider and the customer.

3.   Not knowing exactly who the customer is, and the exact name of the person paying the bill.

4.   The terms and conditions are written in a too smaller font.

5.   There is no disputes resolution outlined, for both business and the customer.

Monday, 10 July 2017 15:50

13 Harmonising Privacy Principles

I am not sure if many businesses realise there have been changes to the privacy laws and these changes affect everyone in business who collects information from their customers.

The privacy act now includes 13 new harmonising Privacy Principles, known as the 13 APP (13 Australian Privacy Principles).

The first thing you need to know about these principles is, if you breach them you may be up for a very hefty fine, the privacy commissioner has the power to seek civil penalties of up to $1.7million. Not only that, if there is a breach and a civil penalty is imposed by the commissioner the individual who has been affected can seek compensation. This compensation could include a recompense for hurt feelings.

Hey, Nichola! Did you say ‘hurt feelings’... Yes, I said hurt feelings.

What does that mean?

OK, from now on make sure you do not put anything into your notes that are derogatory, nasty or makes the person look or feel bad in their eyes or the eyes of someone else.

The privacy principles are about protecting personal information, this is the information on individual people.

So who is an individual person in the context of your business?

  1. Individual consumer
  2. Sole trader
  3. Director
  4. Personal Guarantor

Basically, any information that you collect about a human being is now protected by the privacy laws and there are two types of information.

  1. Normal information, this is collected for the natural use of your business such as addresses, names of directors or consumers.
  2. Sensitive information, this is information about an individual in regards to cultural differences, race, sexual orientation or religious beliefs etcetera.

The difference between these two is, now you cannot collect sensitive information on an individual. This also means that you cannot write in your notes any information about a customer that is sensitive. You can only write information, that is relevant to your business that would be required in the ordinary cause of your day to day activities.

The information you collect must be relevant, you cannot keep information in case you may use it later, it must be relevant to the moment. Not only that, you must make sure that the information you collect is correct at all times and if a customer supplies you with any changes you must make those changes.

Further to this, there are certain circumstances where it is compulsory to have a privacy policy for your business.

The areas of our clientele that may be affected by this are

  1. If you are in the Health Care Industry
  2. Your business turns over 3 million dollars per year
  3. If you provide credit to your customer ie: a trade creditor
    Plus you are in this bracket if you give seven-day accounts

Also, the Privacy Law warrants that if an individual request to see the information you have collected on them, you must give them access to it. They also have the right to correct their information.

In summary: The privacy principles affect the collection of personal information (consumer information) it does not affect information about companies or corporations. Under these principles, most businesses would likely need to have a privacy policy, and as you are receiving this from our office that means you need to have a policy.

Moving Forward: When it comes to handling personal information over to a third party you now must have expressed permission from your customers.

Expressed permission means that your customer must sign off on and agree to you passing their information on.

This means that your privacy policy, registration documents, a credit agreement or any quote forms must include a statement explaining what third parties will be receiving your customer's personal information. …

Then your customers must sign that document.

There is more info at http://www.oaic.gov.au/

Monday, 10 July 2017 15:49

Big Changes to Credit Reporting

It's just unbelievable how much the debt collection industry has changed and now there are more changes about to happen in the Credit Providers arena.

As of the 14 March 2014 new laws will come in that will change the way credit is given to consumers.

This will undoubtedly have an effect on business in general, the changes have been brought in to enable Credit Providers to cross reference consumers credit information. The information provided on a consumer's credit file will now include payment history on all credit providers accounts.

What does this mean:

  • late payments will be reported on consumers credit file by credit providers
  • payment history will now include both positive and negative information
  • history of applications for credit will be logged.

What does this mean for businesses?

  • consumers with poor credit ratings may no longer get credit
  • consumers who have multiple credit cards will no longer be able to max out a card and apply for a new one with a different bank
  • the flow on effect for business will be that consumers may not have ready access to credit
  • business will need to be diligent in making sure your information about your customers is correct, in the event a customer fails to pay.

In summary, business will need to be aware of those customers who change their payment habits, it should ring alarm bells if a customer who normally pays on credit card is now asking for credit.

Ensure you have all current details of your customer and know who they are.

This is a link to an excellent website that explains how the new system works, I encourage all to have a really good look at it, it affects us all.

http://creditsmart.org.au/ 

Don't think you will be able to access a consumer's credit report because this is not legal, only those with a credit providers licence will be able to access this information.  The fines are huge for a breach so it wouldn't be worth trying.

All I can do is urge you to have a good poke around the http://creditsmart.org.au/ website.

Monday, 10 July 2017 15:48

What is a Statute Barred Debt

What is a Statute Barred Debt?

These are debts that have to reach the statutory limitation period.  This means that the debt has reached an age where it is no longer legal to pursue. 

Each state of Australia has a period of time where a debt can be pursued, and has legislation in place that outlines what happens when the limitation period has expired.

Limitation period for simple contract:

Limitation periods for unsecured personal loans and credit cards and the majority of debts sold or referred to a collection agency will arise from simple contracts.  In all states the limitation period for this type of debt is 6 years, except the Northern Territory where it is 3 years.

Limitation period for court judgment:

These are debts following a court judgment

All states are 12 years except South Australia and Victoria where it is 15 years.

The limitation period start date:

This usually starts at the time the debt is entered into.  However it is not always that straight forward.  If a payment arrangement is entered into or the debtor acknowledges the debt in writing the period of limitation recommences at this time.

There is a section in the ASIC / ACCC Debt Collection Guidelines around collecting on statute barred debts, I encourage all businesses that have an older debtors ledger to ensure that you are not following up on these types of debt and to have a good read of the guidelines.

Please find a copy of this document below.

Thursday, 06 July 2017 12:34

Franchise

If you own a franchised business and have more than three outlets we offer a discounted price for each franchise on our Annual Membership program.

Each franchised outlet is set up as an individual client in our system and the debts will each belong to the nominated franchise outlet. The benefits of this are each outlet can have its own address details and information directed at the debtor from exactly where they purchased goods or services from. Also, each franchise is responsible for paying their accounts with BCA Debt, they also have their own login details and cannot see the details of other franchisees.  

The franchisees control their own debt collection processes. Plus when the debtor payment is dispersed they are sent to the individual franchisee's bank accounts.

Purchasing annual memberships is a very cost effective way to get your debt collection done, as it allows you to send as many debts as you want over a twelve month period. To get the best value from debt collection, you are better to send your debts as early as possible, as the longer you leave them the harder it is to get your money back. You pay an Annual Membership and can send unlimited debts to us and pay a commission on what is successfully collected. This commission covers everything from sending letters to telephone calls.

We always request your consent to go ahead with any extra work including tracing people who have moved and making field calls.

Thursday, 06 July 2017 12:33

Childcare Services

Over the years we have noticed an increase in childcare debts coming to our agency, we believe because the industry has changed so much with a lot of big players owning multiple centres many of their clients are falling through the cracks and getting away without paying.

Particularly once their children leave the centre and move onto school or another centre.

Childcare debtors come with their own set of problems, the best way to deal with these is to get them to debt collection quickly, if they are left to long they tend to become delinquent debts and the chances of collecting them lessen's.

All childcare centres directors should make quick action a priority.

Thursday, 06 July 2017 12:32

Property Managers

We know that being a property manager is probably one of the most challenging positions a person can hold and when it comes to collecting money from tenants, your job escalates further.  

However once a tenant has moved out of a property the issues only just begin especially when it come to collecting money from them. 

We are under no illusions when it comes to this type of debt, it is hard to collect and honestly, the success rate depends on the nature of the debt and the person who owes the money.

Therefore it is important that before you spend any more money on chasing money off a tenant be absolutely sure you have all current details of your debtor and that you know they can pay.  Our experience in this area is that not many tenants have the ability to pay back a debt once they have moved out of a property.

Please Note:  We do not collect rental debts for private owners, we collect for Real Estate Companies through their Property Managers.

Thursday, 06 July 2017 12:31

Medical Practice Managers

If you have a business in the healthcare industry, you will know how hard it is to collect outstanding debts. Providing the service is the easy part.

If you’re having trouble collecting medical fees from patients, let us take care of it for you. We collect overdue accounts, Medicare gap and the gap in private health cover.

Clients send us their outstanding accounts either at the beginning or the end of the month. Of course, we will accept them at any time to suit you.

We make it as easy as possible for debtors to pay, assisting in arrangements for people to pay off debt in a structured way so clients receive as much of the debt as possible.

Whilst the basic steps of debt collection are similar, we target our service to meet the needs of each industry we work with. This gives our clients peace of mind that once they have passed their overdue accounts to us, we will handle everything, including taking the debt through the court process if this is the appropriate way to finalise it.

Our debt collectors liaise closely with big insurance companies to cover all aspects of collecting debts associated with workers’ compensation and other medical work related debts.

You pay a small fee to have the debt entered into our system plus a percentage of the amount collected. This commission covers everything from sending letters to telephone calls. We always request your consent to go ahead with any extra work including tracing people who have moved and making field calls.

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