Debt Factoring Company Complaint | AccountingWEB

Debt Factoring Company Complaint

My client has been badly served by a debt factoring company, which is in an unregulated industry. His company was put out of business by a cash flow crisis, reached when the factoring company failed to collect, promptly, a debt for £14,000. My client is unaware of any problems with the debt, and the customer is solvent and still trading.

The debt factoring company purchased the debt of £14,000 from my client. They paid him 65% or so. They have failed to collect the debt - the efforts being occasional half-hearted attempts from the debt manager, who has avoided calls, and refused to provide a log of the debt recovery actions taken - which were minimal, and did not include even the threat of court action. My client's business ran out of cash, as he didn't receive the balance of the debt. The debt factoring company have written off the debt as unrecoverable, although have not provided any evidence for this course of action, other than that "they'd exhausted all recovery measures". They are pursuing my client personally for the 65% advance. They refuse to transfer the original debt back to my client, unless he repays the 65%, which he cannot afford. So "catch 22". If the debt were back in his ownership, I am certain, from the evidence, I could recover it for him, and he could then repay the debt company without having to sell his home and face financial ruin.

Any advice or assistance would be very gratefully received.
Tessa Finch

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Get the debt transferred back to your client

donfisher |