Just a quick question that I've been wondering about today. When does credit control become debt collecting, and when do you start to get into the realms on OFT licenses?
If as part of my service to my clients I chase up their outstanding debt, do I start to need a license, or not?
I offer a credit control service to some of my bookkeeping clients. If a debt turns bad, I sort out the legal process for clients via the Small Claims court. I complete the relevant forms (all online), although I always make sure that all claims are in the name of my client.
The small claims process is pretty straightforward and so far I've had a 100% record, i.e. all outstanding monies owed have been repaid to my clients before going to court.
As long as its a case of just sending out the normal chasing letters on behalf of your clients, and all legal forms are in the name of your client I don't believe you need a CC licence.
-- Edited by Stuartbham on Sunday 11th of September 2011 10:43:59 PM
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
I did look at paycert, but I'm not sure it will give me anything I don't already know, especially given the differences in legislation between Scotland and the rest of the UK. That said, I'm happy to hear a review from anyone who has used it.
I'd suggest "Credit Control" is operating the clients credit control process. Debt collecting is what you do when the client hasn't paid and you have come to the end of the credit control system.
Hi Kris.
Following on from Stuart's post on consumer credit licence. It is not required if charging interest, giving credit terms to Ltd companies.
Dalbir
When I enquired about a licence I was told there was no need for me to hold a consumer credit licence as none of the categories of the consumer credit act applied to what I was doing for a client.
They said I would only need a licence if I collected debts. Submitting a claim on behalf of a client where the payment is made directly to the client is different. I was also told that giving advice on a debt is also not relevant as my client is not the debtor.
Just my tuppence worth, hope this helps.
Stuart
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
When I did credit control and it got to the point of debt collecting we always used the services of a third party so a CC licence wasn't required. Thankfully we only had to do this the one time anyway. I guess it depends on how often things get to that point that getting a licence would be beneficial.
Credit control requires phone calls, email, letter writing etc. Debt collecting requires hitting the gym 4 nights a week. Credit control becomes debt collecting when you have to send Frank and his boys round to retrieve money.
