The debtor stops responding:

Although the benefits of expanding your business internationally are obvious, how does one deal with overseas debt and debtors? International debt collection may prove challenging if the debtor believes he is beyond your reach.

Despite a stringent approach to credit control our client, an international payment services provider, had been unable to collect a 4000 euro debt from a Swedish customer. The customer had stopped using the service without notice or payment of fees due, and had failed to respond to communications from the credit control team, whether they be by email, post or phone. The debtor’s phone numbers then went offline along with their website, and emails were returned as undelivered. As per their credit control escalation process, the collection team referred the debt to Sterling Debt Recovery for further action.

Investigating the overseas debt

Debtors often respond to Sterling’s communications despite ignoring those from our client, so our first step is to send a debt collection letter and email to the debtor using the contact details provided by our customer. In this case however it became clear very quickly that the debtor’s business had effectively gone offline. Sterling began investigating the debtor company immediately to establish its’ status relating to the debt. Our investigations quickly showed that the business had been acquired by another entity as a going concern, so effectively the acquiring business was liable for the debt. Further investigation online and by phone was required to establish contact with the acquiring business and to illicit a response from a representative at the appropriate level.

Gaining commitment to pay

Once communication had been established with the correct entity, Sterling was able to collate proof of the debt and clear evidence that the acquiring business was liable for the initial invoice value plus additional interest and fees added under the terms of business of service. Initially the claim was rejected by the debtor, but following a series of emails and calls using a professional collection approach, our experienced collector was able to persuade the business to pay in full without the need for any legal proceedings. The business paid the full debt by bank transfer into Sterling’s euro client bank account.

The whole process from the debt being referred to Sterling, to the invoice value being paid over to our client, took a total of 6 weeks. Whilst this is still a significant delay in payment, the process is certainly far quicker, more cost effective, and less risky than taking legal proceedings. And whilst 6 weeks is a realistic time-frame for collecting an overseas debt, Sterling are often able to collect more quickly due to having extensive experience with international debt collection.

Commission only debt collection, effectively free to the client

Sterling’s International Debt Recovery Service works on a commission only basis with no up-front charges. On this occasion, as is often the case, the additional fees Sterling were able to add to the debt effectively covered the cost of our service. This meant that after Sterling had deducted our commission fee from the debt recovered, we were able to transfer the full invoice value to our client.

In this case the fees were added in line with our clients’ terms of business in place with the debtor. In other cases (for example where late fees and interest are not stated in the terms of business) then we are usually able to apply interest and fees in line with the statute of the jurisdiction relating to the debt.

Sterling’s International Debt Collection Service is available on a No Win, No Fee basis to all businesses, from small to medium sized companies trading overseas, to blue-chip international corporations. We work in a professional manner, in line with the Credit Service Association’s code of practice to get our clients paid quickly and cost effectively whilst retaining