ICSM WARNING: The fake debt collection companies are back - promising creditors they can recoup written off debts

ICSM has a term for the fake debt collection companies – they call them the Lazarus Debt Collectors as they rise from the dead every few years.

Usually when the economy is struggling and businesses find customers are not paying their invoices due to cash flow problems the Lazarus Debt Collectors pop up to say they can secure payment for long overdue and written off invoices.

Recently ICSM – the credit intelligence group for firms – has come across a number of instances of companies being contacted by email by companies claiming to be able to chase down long lost unpaid invoices for a fee. And that’s the catch. Initially the fee is quite low with a promise that once the so-called debt collector have made progress in pinning down the debtor they ask for more cash to take further legal action. Worse still once they claim to have secured payment they then ask for a ‘release fee.’ The reality is they haven’t done any work at all but simply claimed they have.

Lazarus Debt Collectors come across as very professional and give a convincing account of how they will make former directors of a defunct or struggling company personally liable. One member of ICSM said they talked the talk and assured them they would use section 214 of the Insolvency Act to secure the debt of £80,000 would be paid. The act deals with Wrongful Trading and outlines 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. Technically the director would be personally liable but in reality it is extremely difficult to prove.

Ian Carrotte of ICSM: “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. At ICSM we do not ask for upfront payment and we give a clear outline of potential costs so a client can decide if the debt is worth chasing.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk