Beware the Lazarus debt collectors: they’re back and trying to rip you off


Con men who promise to get your cash 

They are back: the Lazarus debt collectors who fleece unsuspecting clients who believe they will recoup bad debts. The conmen go through the Official Receiver’s lists of creditors owed money when a company goes bust and then approach a creditor to promise they can recover all their money – for a fee.

“It’s when you are most likely to make a mistake,” says ICSM’s Ian Carrott. “You’ve just been taken for a few thousand by a customer who has gone bust and you’d like to at least like to get a few hundred back but the time and costs make you stop. Then you get a call from a debt collecting firm who say they can recover all of your lost cash as they can legally go after the directors of the defunct firm. All you have to do is to pay them £500 up front and you’ll soon have most of your bad debt back. It sounds too good to be true. And of course it is.”

ICSM has already had calls from members saying they’ve been approached by phoney debt collectors.

Carrott continues: “The Lazarus Debt Collector (as I call them) may quote section 214 of the Insolvency Act, which deals with Wrongful Trading and which states that any director of a company that allows that company to continue trading whilst knowing that it is insolvent may be guilty of wrongful trading. Furthermore, that such a director could be held liable for the debts incurred by that company during the period of wrongful trading.

“They may seek to convince you that no director can possibly be unaware of the state of their business prior to calling a Meeting of Creditors - or even to the appointment of a Receiver or Administrator - and therefore that they can be accused of wrongful trading and made personally to pay the debt due to you.

“Most likely they will have stumbled across your name on a creditors' list of a failed company and will know that you have been hit. They will make an educated guess from the size of your business in relation to your loss how serious the situation is for you.”

The print industry is especially vulnerable at the moment as the internet has made rogue traders a haven of anonymity and many printers are being hit by bad debts. ICSM advises its members on how to prevent bad debts in the print industry for an annual fee that’s less than a tank of diesel.

Ian Carrott says: “The simplest way is to ask them for a copy of the contract to pass to your solicitor for perusal prior to any signing. Another way to discourage them is to tell them that you do not believe in paying in advance for Debt Collection Services. Most reputable debt collection agencies work on a 'No Collection - No Commission Fee' basis and still manage to make a living!

Try asking them for third-party references - they will most likely invoke a confidentiality clause, which is bunkum! No creditor would object to giving a reference of efficiency to an enquirer - unless, of course, they had been stung! Don't be afraid to show them the door - you are entitled to refuse their services - and without giving a reason.”

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 or call +44 (0) 844 854 1850 or email

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