News

Warning over unexpected late payment notices in relation to now-liquidated companies
04 April 2017

A number of prominent UK collection agencies appear to be closely monitoring liquidations and issuing some businesses and individuals who have purchased goods and services from now-liquidated companies with unexpected payment notices.

In some cases, such notices may demand interest and compensation on invoices backdated as far as six years.

It would appear that such agencies are effectively approaching liquidators to purchase the rights to pursue claims on behalf of smaller companies in instances where such businesses have failed to formalise their credit terms.

Once the rights to pursue such claims have been purchased, agencies are demanding payments under Section 5A of the Late Payment of Commercial Debts (Interest) Act 1998, which are then legally required to be paid by the affected party within 30 days or less.

Such demands will typically charge a fixed fee on each previously-unpaid invoice – which can easily rack up into tens of thousands of pounds, if not more.

In some cases, the collection agency will also threaten to issue a court order in the event of non-payment.

The worrying news has far-reaching implications for businesses and individuals who may have purchased the goods or services of now-liquidated companies within the past six years.

However, in the event that you are targeted with an unexpected payment notice in relation to such a transaction, the claims made against you could be liable to fail. This will usually apply if you are able to prove that the now-liquidated company in question had not regularly chased you or your business for late payment.

If you receive an unexpected late payment penalty from a collection agency in relation to such a matter, please contact us for specialist advice at the earliest possible opportunity.

Link: Late Payment of Commercial Debts (Interest) Act 1998