Recovering Bad Debts – Wrexham Property Meet Welcomes Steve Densley of Daniels Silverman (August 2015)

Wrexham Property Meet welcomed Steve Densley to the August meet up. Steve works for Daniels Silverman who carry out Proactive Debt Recovery and Investigations.

You can read more about what Steve had to say below.

Steve began by explaining that he is based in Liverpool and has been there for the past six months and does quite a bit of work for both private and social landlords. He informed everyone that he had just done a blog called ‘7 Tips for Effective Credit Control,’ which he was going to run through for everyone (The full link for Steve’s article can be found at the end of this blog)

Steve explained that most debts incurred would be incurred anyway. Tip number one is to know your own customer, be cautious of business friendships. For example if you have commercial property to let and are considering letting it to a business, check the company is solvent. This can be done by carrying out a company check.

Tip number two is know the identity of your customer correctly, for example if you are letting your property out to Smith & Co and are being paid by Smith & Co LLP if they fail to pay any non payment can be difficult to enforce.

Tip number three – make sure you send invoices on time and chase them as soon as possible and ensure they contain the correct information in relation to any rent arrears.

Tip number four – make sure that there is a clear explanation as to what happens if the rent remains unpaid which leads nicely on to tip number five which is to carry out those steps. Steve explained that unfortunately many people make the effort but don’t follow through.

Tip number six – if recovery isn’t forthcoming you can do it in-house but it is better to use a licensed debt recovery company. There are unlicensed debt recovery companies out there and this type can literally be set up in the back room of a house ! Licensed companies have to comply with data protection and lots more in order to have access to tracing information. Steve advised that landlords should ensure that there is a clause in their AST, to the effect that any rent arrears will be passed on to a debt recovery agency. This then ensures that there is no cost to the landlord in recovering the debt as it can be passed on to the tenant. He further advised that the landlord should name the debt recovery company in their AST.

Steve stated that tip number seven was that once you have passed the debt over to a recovery company, don’t have any further dealings with the tenant. If they contact you directly, refer them to the debt recovery company. He explained that as a debt recovery company they can set up merchant services; the outstanding money doesn’t have to be collected in one lump sum.

He commented that quite often tenants tend to ignore letters from their landlord but tend to sit up and take more notice of a letter from a debt recovery company as they perceived matters to have escalated. Letters from debt recovery companies are viewed in a different light by tenants.

Steve informed everyone present that his company do usually charge admin and set up costs, however he has agreed to waive them for anyone who comes to them through Susie or Wrexham Property Meet. In these circumstances all they would do is pay 20% of the outstanding debt recovered to the company for recovering it. He made the point that it’s better to recover 80% of something than not pursue the debt at all and recover nothing.

Steve highlighted ARAG who run a rent guarantee insurance; he agreed to forward the information on to Susie who will circulate it to everyone.

Some questions were then put to Steve. He explained that as a company they always try to separate the people who can’t pay from those who won’t pay; this is done straight away. You have six years to go after someone for the debt. As a company they can carry out external traces as well, these do cost £50 a go but operate on a no trace no fee basis.

Everything they do as a company is pre litigation. They can issue a statutory demand however there are changes coming in, in October which will see the limit for such increase to £5,000 from £750. If that fails to work then you can go to court, there is however a charge for doing this.