Late payment issue

[Ted]

My payment date is the 25th, hands up I forgot, and sent payment at 10am on the 26th.

Just received an email from accounts today, saying it's not been paid.

Please may we remind you that payment is required in-advance for the period of service as stated on the invoice. The payment due date is printed on the invoice and payment must reach us on or before that date.

We reserve the right to charge late payment interest and penalties in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 as amended. Note that this includes statutory compensation for late payments of £40 per invoice in addition to interest charged at 8% above the base rate.

Nice!

I've spoken to First Direct and they assure me that the express transfer scheme works 365 days a year, and the payment arrived at IDNet on the 26th. 

 

[pctech]

I bank with FD too and that is correct but it requires someone in accounts at ID to check their collection account and manually credit it.

[Ted]

but it requires someone in accounts at ID to check their collection account and manually credit it.

That's exactly what the bank told me, they also told me "but that's their problem" but now it seems to be mine!

[Rik]

I think you've just been caught up in an automated scheme, Ted. Have a word with Simon on Tuesday.

[pctech]

I think even if you pay it by card it takes a day or two to process, I've no idea why.

DD might be a better bet as I know my phone bill (with IDNet) was due on 28th but was deducted on 29th because then it really is up to them.

[Rik]

Plus, of course, 25-28 December weren't 'banking days', nor are 1-3 January.

[pctech]

But there needs to be a better system now we have faster payments.

I do also wonder why it can take 3 days for a card payment to be credited.

[Rik]

I find that's usually down to the retailer dragging their feet.

[pctech]

Think it takes a day or two to work through the Visa and Mastercard settlement systems.

[Rik]

Indeed, the rest is just retailer inaction.

[pctech]

I wonder if it would have been better for Ted to pay his bill on the portal using his debit card?

[Ted]

I think you've just been caught up in an automated scheme, Ted. Have a word with Simon on Tuesday.

I won't bother, Rik. They can take as much "statutory compensation" as they like. It'll be the last payment they ever receive from me.

You've probably guessed, I'm a bit peed off.  

[pctech]

Ted do you have broadband or just the phone?

To be fair I think this has been sent out by the automated system.

[Simon]

I do wonder if perhaps that automated notice is a little stern for a 'first offence', though, especially if the payment is only a day overdue.  Maybe IDNet could look at a gentler first reminder?

[Ted]

especially if the payment is only a day overdue.

I wonder if I'll receive my MAC as quickly?

[Rik]

I won't bother, Rik. They can take as much "statutory compensation" as they like. It'll be the last payment they ever receive from me.

You've probably guessed, I'm a bit peed off.  

I really do think it's one of those automated issues, Ted. I've never seen one, but I can have a word with Simon about it next week.

[Rik]

I wonder if I'll receive my MAC as quickly?

You'd normally receive it immediately.

[pctech]

I do agree it does seem a little stern that warning.

[nowster]

As with many small businesses, if you can speak to a human and explain (politely) that it was a genuine mistake on your part, they'll usually be accommodating for a first offence.

The reason they will have the standard £40 late payment fee is so that they can bludgeon customers that are habitual late payers. I'm sure they'll have some discretion as to whether it is waived.

[JB]

I wouldn't worry too much Ted.

In my case Scottish Power sent me a reminder to submit my on-line meter reading. The email was dated/timed, Christmas Day at 12:30.

Nice! Just in time for Christmas lunch.

I already hate them with a vengeance 

[DorsetBoy]

You got a hang over Ted?  All ISP's have an automated billing system and if a payment is not registered an email will be sent, it's the same for everyone you are not being picked on. IDNet are hardly going to be charging you once the banking system gets moving again and they are back in the office.

[Ted]

You got a hang over Ted?

I should be so lucky  Too busy driving children all over the place.

it's the same for everyone you are not being picked on

Never thought I was, I just don't appreciate receiving what I consider threatening emails on new years day! Or any time, for that matter.

IDNet are hardly going to be charging you once the banking system gets moving again and they are back in the office.

That remains to be seen. According to my bank, the system seems to be moving just fine, it would appear to me (and First Direct) that it's IDNet dragging it's arse crediting the payment. I can only go on what i've been told.
As I said, it was a late payment, I accept that, but £40 + 8% interest is waaaaay over the top!

[Rik]

I'd be amazed if they hit you with that, Ted, imo it's just a standard email triggered by the passage of time. Unfortunately, it's all happened during the Xmas shutdown and there's no-one there to credit your account. I suspect, though, that the accounts system does a daily 'batch' run regardless.

[pctech]

I'm sure this will all be sorted reasonably Ted, IDNet seem like a decent bunch, not like you're dealing with hangin' Harry the loanshark from down the road.

[Tacitus]

.......IDNet seem like a decent bunch, not like you're dealing with hangin' Harry the loanshark from down the road.

They *are* a decent bunch and I expect them to do the right thing.  In my own case I had to raise a query regarding a charge.  It was sorted promptly and a credit put on my account there and then and I got a phone call with an apology from Simon.  Note, he didn't have to phone me he could have just replied to the email.

What seems to have happened here is that the automated system has pressed on regardless over the holidays.  Once they open next week, a quick phone call and I don't doubt it will be sorted, with an apology for any inconvenience.

Regarding the fee for late payment, I think most of us would probably be surprised at the number of habitual late payers.  I also notice the recent requirement for people to sign a written agreement to pay BT SFI charges, which suggests to me they may have had people refusing to pay, particularly in cases of 'no fault found'.

For some people (not in this case) it's a point of honour not to pay until the final demand.  The upshot is increased admin time and costs, chasing bad (or non) payers and, a slightly poorer quality of service for the rest of us.

[Technical Ben]

Glad you got it sorted. I've had a similar hiccup when I thought my account was setup for DD and I'd selected manual payments. 

[nowster]

I used to run a small ISP. The problem wasn't the accidental late payers, it was the habitual "pay as late as we can get away with, and then dispute every line on the bill" customers, usually businesses.

[SSK]

We reserve the right to charge late payment interest and penalties in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 as amended. Note that this includes statutory compensation for late payments of £40 per invoice in addition to interest charged at 8% above the base rate.

Hi Ted,

Late Payment of Commercial Debts (Interest) Act 1998 applies (as the title says) only to COMMERCIAL debts, i.e. debts between businesses. If you are a private 'home' customer then it doesn't apply to you at all.

Sean

[Ted]

Hi Ted,

Late Payment of Commercial Debts (Interest) Act 1998 applies (as the title says) only to COMMERCIAL debts, i.e. debts between businesses. If you are a private 'home' customer then it doesn't apply to you at all.

Sean

Thanks Sean. Yes, I am just a home user, so what you say makes sense. Although it makes no sense why I was sent the email in the first place.

[davej99]

Late payment and payment evasion is a massive problem for large and small businesses, both commercial and credit retail. Suppliers are deliberately taken to the limit of endurance by their customers, often causing severe cash flow problems. Their response has been to become far more robust, for example, placing large corporations on stop ship and issuing proceedings against others. If you don't act firmly you become a bank, lending out money for free. Bad payment can often force businesses beyond their overdraft limits and lead to financial crisis when the banks, who show little mercy, themselves take action.

Retail companies who give credit are also becoming much more aggressive in the pursuit of late payment. You will see, for example, communications, utility and credit card companies resorting to debt collection agencies and the courts very early on indeed, such is the level of credit abuse. Unfortunately, it is often hard to discriminate between accidental oversight, very much in the minority, and deliberate evasion. The debt pursuit process is often automatic and the professional non-payer is not surprised by this and will string things out as an art form; but the otherwise fastidious and timely payer is aghast and offended. The cold commercial calculation, however, is that a few good customers offended, even lost, is a price that has to be paid to deal with epidemic and deliberate payment problems by customers who one can probably do without.

As a good customer offended, the decision we have to make is do we change supplier, or do we let the offence pass as an inevitable consequence of the bad debt epidemic; do we cause a good supplier more grief by taking good business away; or do we support them as they act to minimise losses, which in turn benefits the service that can be provided to the rest of us? Essentially my pitch is that the good payer and the good company must support each other, and provided that all important phone call gets an ameliorative response in good spirit, it is best to let the offence pass in good spirit.

[SSK]

Late payment and payment evasion is a massive problem for large and small businesses, both commercial and credit retail.

As I run a small business I very much appreciate that late payment is a large and increasing problem, especially where large companies who are major customers of small companies try to apply 'leverage' on the smaller company. Also, I accept that the vaidity of the arguments you put forward about the 'agressive' chasing of debt.

The degree of aggressiveness to be used is in many ways a commercial decision - i.e. the extent to which the monetary gain from the level of aggressiveness outweighs the risk of loss from alienating customers.

My argument was that however aggressively IDNET (or BT, or any utility company) wishes to pursue a debt with a customer, they can apply Late Payment of Commercial Debts Regulations 2002 only to debts between themselves and other businesses. It does not apply to their consumer contracts with private individuals.

Sean

[Technical Ben]

One way I plan to avoid this is only invest (if that is the right word) a small amount into each customer. So if I loose one or they do not pay, I have only lost a small payment. Kinda like diversification of my customer base.
Don't think you can do that in larger companies though. As with such a large customer base, if they all decide not to pay, your in trouble.

[davej99]

[Companies] ... can apply Late Payment of Commercial Debts Regulations 2002 only to debts between themselves and other businesses. It does not apply to their consumer contracts with private individuals.

We cannot comment on IDNET's arrangements with its customers. But as a general case a supplier has to know which is a commercial contract and which is a contract with a non-trading private individual. I suggest this is not always clear if a party uses a domestic contract wholly or partly for the conduct of a business and no declaration is made. In any event, when problems arise, parties with goodwill resolve matters quckly, without blame or recourse to contract terms and legislation. At a personal level my policy was always to pay small suppliers by return and the big suppliers bang on date. A prompt payment reputation is well worth having and gets better terms. On the sales side I never hesitated to put customers on stop ship or issue proceedings if they did not pay me by the due date. If they took their ball home, that was fine by me. A sale not paid is not worth having. My response was always: if you want to borrow money see a bank.

[Rik]

Sounds like a good policy to me, Dave.

[cavillas]

Why not have a system that only sends out warning emails on the second successive and further late payments and take action if required.  That way any customer who inadvertently misses or has a late payment would not be offended and those who do it a second time, successively really do need a kick up the ....

[pctech]

Can be an easy mistake to make, did it a couple of times with my credit cards.

[pctech]

Any idea how long it takes ID to credit a bill payment by BACS (which went to them via faster payments) as bill was issued yesterday and was paid last night but portal is offering the opportunity to pay it by card now.

[Rik]

No idea, Mitch, sorry.

[pctech]

I know today was effectively the first business day but just enquiring as once that shows as paid I'll put the DD back.

[Rik]

Drop Simon an email if it's not sorted tomorrow.

[pctech]

Will do, will check when I get back from work tomorrow evening.

[pctech]

Mailed and got a reply from Simon next day acknowledging the payment.

DD mandate now filled in again.