July & August 2016 Credit Management magazine

More documents

Recommendations

Info

Keeping you in control Juggling too many priorities? DSO Promise to Pay Low Value Debt We can hand it to you on aplate! Cross Border Recovery Legal No collection, no fee ISO 9001:2008 accredited Utilisation of the Late Payment Act 35years experience CALL NOW ON 01527 549522 to discuss your requirements or arrange an appointment www.controlaccount.com E: sales@controlaccount.com 24 July / August 2016 www.cicm.com The recognised standard in credit management
INVESTIGATION DIRECT ACTION Sean Feast explores an issue with Direct Debits that is costing British businesses thousands of pounds through fraudulent Indemnity Claims. DIRECT Debits have long since been accepted as an integral part of bestpractice credit management. As an essential element of a payment and collections strategy, they are generally accepted as being of significant benefit to UK businesses, helping them to make and receive payments effectively and efficiently on time and with a high degree of accuracy, certainty and security. But as with any automated payment mechanism there can be flaws, and the Achilles Heel for firms using Direct Debits to receive payments from suppliers is the issue of an Indemnity Claim. An Indemnity Claim (under the guarantee) is where the borrower (for example) notifies his or her bank of an error with a direct debit payment. Such an error can be because too much money has been taken, it was taken on a wrong date, or it has been taken without authority. This latter claim can be sub-divided again into claims where a previous Direct Debit Mandate has “We had to convince the bank that we were the victim of a fraud, but it was only after we challenged the bank that by doing nothing it was effectively allowing a fraud to continue that we began to make any progress.” been cancelled or where the payer alleges the direct debit payment was taken without his initial authority. It appears it is of little consequence that a series of regular payments may have been made prior to the borrower making an Indemnity Claim. A claim cannot, however, be made dating back over an extended period of time. The time frame for bringing a claim is six years from the date of the event complained of, or three years from the date the borrower ought reasonably to have been aware of the event, whichever is the later. (See explanation by Mike Hutchinson on page 26). In all cases the borrower’s bank is obliged to make an immediate reimbursement to the borrower for all payments it is alleged have been taken without correct authority. The borrower’s bank will then contact the lender to clawback the money from them. The lender has 14 days from receipt of notification of the claim to reimburse the borrower’s bank, regardless of whether or not the reason for the reimbursement is disputed. The Direct Debit Scheme is not concerned as to the contents of the contract between the lender and the borrower. ESSENTIAL PROTECTION Indemnity Claims are essential for protecting the rights of the borrower and the bank, but do little to protect the creditor. They are also subject to abuse. A true story from an anonymous source illustrates the point. continue to page 27 The recognised standard in credit management www.cicm.com July / August 2016 25
Page 1 and 2: CREDIT MANAGEMENT CM JULY / AUGUST
Page 3 and 4: CONTENTS JULY/ AUGUST 2016 www.cicm
Page 5 and 6: The recognised standard in credit m
Page 7 and 8: CICM NEWS COMPLAINTS AGAINST PAY DA
Page 9 and 10: NEWS IN BRIEF SOLAR CLOTH COMPANY I
Page 11 and 12: FCA APPOINTS NEW DIRECTOR OF SUPERV
Page 13 and 14: INSOLVENCY NEWS CORPORATE INSOLVENC
Page 15 and 16: LEGAL MATTERS INTRODUCING... DAVID
Page 17 and 18: OPINION WHAT’S APP WITH DIGITAL D
Page 19 and 20: FEATURE SPECIAL the other end of a
Page 21 and 22: indeed misled investors regarding t
Page 23: further application, creating a les
Page 27 and 28: FEATURE SPECIAL continued from page
Page 29 and 30: TRADE TALK According to FSB, more t
Page 31 and 32: JUST TOO MUCH DEBT I recently spott
Page 33 and 34: CICM Chartered Institute of Credit
Page 35 and 36: PROGRESS WITH CONTINUING PROFESSION
Page 37 and 38: EDUCATION OPENING more DOORS With C
Page 39 and 40: WALLETS, or purses, have been aroun
Page 41 and 42: WHAT RISKS ARE YOU TAKING? WHY TAKE
Page 43 and 44: Sector Getting Better Mining & Quar
Page 45 and 46: “The programme has enabled us to
Page 47 and 48: assignments and conduct your profes
Page 49 and 50: FORTHCOMING EVENTS FULL LIST OF EVE
Page 51 and 52: The recognised standard in Credit M
Page 53 and 54: CICM BRANCH NEWS KENT BRANCH CROSS
Page 55 and 56: THAMES VALLEY BRANCH PRIESTS, NUNS
Page 57 and 58: BI-LINGUAL CREDIT CONTROLLER SUCCES
Page 59 and 60: Cr£ditWho? CICM Directory of Servi
Page 61 and 62: Cr£ditWho? CICM Directory of Servi
Page 63 and 64: CREDIT MANAGEMENT CM MONTHLY PRIZE

July & August 2016 Credit Management magazine

Create successful ePaper yourself

Delete template?

Save as template?