Agency Overdue Payment - What can I do?

[Dynamic]

The agency still hasn't paid me for the May month that I worked at a previous contract (last month of the contract).

They were supposed to pay on 13th June for the work done in May but 2 weeks have gone and they haven't paid anything.

I checked with the client, and they have paid the agency so the agency have withhold the money.

I emailed the agency, but they ignored all the emails and gave me no response in email.

I called the agency several times and they said we have changed our bank accounts (stupid reason!) and we will let you know when we paid you!

The payment which was made in May (for the work done in April) also was 2-3 weeks late; they're the worst agency I have ever worked with.

So, it's not clear when they're going to pay as it's already 2 weeks overdue. What could I do now?

I was thinking to write a letter, putting all what they said in it and posting it to them (perhaps in a solicitor headed letter).

Do you have any template with regard to what should I be writing in this letter?

Thanks,

[SueEllen]

Have a look at this website - Interest Calculator - Calculate Late Payment Interest - Pay on Time

You need to send a named person at the agency preferably a director a special delivery letter. That way they cannot deny receiving the letter.

Emails and phone calls are easy to ignore and deny receiving. In future as soon as a company doesn't acknowledge your emails within 48 hours put pen to paper and send them a letter.

Give the letter the title "Letter Before Action".

Keep the letter short i.e. don't go into the ins and outs of how you have chased them for debt.

Simply state:
1. The invoice [number] is now x days over due.
2. Under The Late Payment of Commercial Debts (Interest) Act 1998 interest on the debt is charged at y%
3. You have chased them and the [named agency] for payment since [date] and due to their refusal to pay if they do not pay the attached invoice [number]
within 14 days, then legal action will be taken against them to recover payment.

Then attach by stapling an amended invoice with the interest added on to it and the words "over due" in a way that stands out.

After 5 days of them receiving the letter (use track and trace to get the date they received it) phone them up and ask them to pay the invoice. You can phone them intermittently asking them for payment but you mustn't harass them. If you have someone else i.e. a wife who can phone on your behalf get them to do it.

If they deny receiving your letter on the phone, which still happens with letters sent special delivery, tell them that it was received at x date by them and it was sent special delivery. Companies stop arguing when you state that as they can't admit their administration is in a mess.

After 12 days go and talk to a solicitor or debt collector about getting them to chase the debt.

After 16 days (leeway in case they paid you) follow their advice. The choice is either to start on the road to court action which can take a long time and the agency can go bust or simply ignore it, or get the debt collector to chase the debt taking some money out for their fee.

It's unlikely to go as far as court action/debt collectors as they are likely to pay the invoice without the interest if they realise you are going to actually chase and hassle them for the debt.

[BlasterBates]

The most likely reason for late payment other than an administrative error which is easily rectified, is that the agency is in financial difficulty. You need to chase this pronto. You may need the help of a soliciter to help you. You probably need to send a reminder first, if they haven´t paid according to the contract, give them 7 day notice threatening legal action and if they haven´t paid by then go and see a lawyer. If they are going insolvent you need to get out of your contract before the next invoice, and you need it to be legal.

[SueEllen]

The most likely reason for late payment other than an administrative error which is easily rectified, is that the agency is in financial difficulty. You need to chase this pronto. You may need the help of a soliciter to help you. You probably need to send a reminder first, if they haven´t paid according to the contract, give them 7 day notice threatening legal action and if they haven´t paid by then go and see a lawyer. If they are going insolvent you need to get out of your contract before the next invoice, and you need it to be legal.

If you actually read the post then write what you thought he wrote you would have seen - he's already left the contract.

He's trying to get his final invoice paid from an old agency.

[Dynamic]

Thanks for your response Sue.

about the Interest Calculator you mentioned, I had signed an opt out contract with the agency. Does it mean that this legislation won't be applied to me and I can't charge them interest legally?

[Hex]

Thanks for your response Sue.

about the Interest Calculator you mentioned, I had signed an opt out contract with the agency. Does it mean that this legislation won't be applied to me and I can't charge them interest legally?

You can charge them interest. It has nothing to do with Opting in or out of the Agency Regulations.

[Dynamic]

You can charge them interest. It has nothing to do with Opting in or out of the Agency Regulations.

Thanks,

Is 8.5% annual interest charge?

For 30 days being late of £2500, how much should I charge them?

[Wanderer]

Is 8.5% annual interest charge?
For 30 days being late of £2500, how much should I charge them?

Have they paid the amount they owe? Don't go charging interest until they pay up because you won't know how much to charge. Presuming they have now paid and that they never disputed the invoice. Remember that you can do this for every invoice that they paid late, so if they have been a systematic late payer then do the same for every late payment.


According to PayOnTime

1st July - 31st December 2011 Reference rate = 0.5% Reference plus 8% = 8.5%

Up to £999.99 £40.00
£1,000.00 to £9,999.99 £70.00 <---
£10,000.00 or more £100.00

So that's £2500 * (8.5/100) * (30/365) = £17.47 interest + £70 penalty for late payment = £87.47

Write them an invoice using your standard template and put in it:

Invoice number XXXX was due on dd/mmm/yyyy paid on dd/mmm/yyyy, ZZ days late. Interest and penalties are now due as per the Late Payment of Commercial Debts (interest) Act 1998.

Statutory penalty for late payment of debt £ 70.00
Statutory interest 30 days at 8.5% per annum £ 17.47

Total £87.47

Payment of this invoice is due within 14 days.

Email and post a copy of the invoice, posting it "signed for" costs a couple of pounds and will get you a proof of delivery to stop them dicking you about by telling you they never received it or the dog ate it.

It's not a large amount of money but the point of principle is important. By doing this you are sticking it to the agency and it will teach them a lesson about messing contractors around. I wouldn't spend too much time chasing it, I'd follow SueEllen's excellent advice with regards to chasing up the debt. Follow her procedure and then sell the debt to a debt collector to chase for you if they don't pay up.

[BigTime]

Useful info here that I may use in the next few days. I also like this site: Late Payment Penalties in the UK

[Credit Enforcement]

Debt Recovery

Mod Note.

Hi Mark,

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