Problems of finding the real owner of a firm

Dodgy firms: finding out who is the owner when staff are dishonest

Relative confusion: it can be difficult to find out who is the real debtor when everyone has the same name in a family firm. Photo by abi ismail on Unsplash

One of the problems of chasing bad debts is the costs and the sheer time it takes to track down the debtor. Unpaid debts under £1,000 are often written off as it can cost hundreds if not thousands of pounds to take the debtor to the small claims court, use lawyers and debt collectors on your behalf along with the time and energy required.

Chasing much larger debts that run into several thousand or tens of thousands of pounds can be worth pursuing especially using a professional debt collection agency. Many agencies work on a no collection no fee basis, while others want cash up front. One issue ICSM has come across concerning debt collectors is the tricky issue of tracking down the real owner of a business owing money.

The TV programme The Sheriffs Are Coming often illustrates this frustrating problem. Time and again the apparent owner of a firm will deny who they are and will pretend the proprietor is away or on holiday and can’t be contacted.

Another issue is of names. If a company is owned and run by a family or close relatives then nearly everyone at the place of work may have the same surname. Trying to work out who is who and who is the real owner can be highly frustrating as the debt collectors may be given the ‘run around’ by various individuals in the hope they give up and go away.

Ian Carrott of ICSM whose organisation protects its members from bad debts by sound credit management says it is a particular problem with family firms. Creditors are passed from one person to another in a wild goose chase despite having documentation from the Government’s Companies House.

“The debtor will deny they are the owner and make out it is a cousin or nephew with the same name,” he says, “the idea is to waste the time of the creditor or the debt collector and so they give up chasing the debt. It’s very cynical and debt collectors have told us they know they are being given the run-around but have to follow industry guidelines and the law in getting the account settled.”

Using the services of ICSM is a wise move as they do things by the book and have an excellent track record in chasing down debtors and securing payment.

For more news and views on British industry or to join ICSM and prevent bad debts by getting inside credit information and early warnings of businesses in trouble visit icsmcredit.com or call +44 (0) 844 854 1850 or email icsm@icsmcredit.com

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