customer won't pay

[difowler44]

I have had 2ea situations for minimal bucks, where a threat or other coersion did not force the customer to write the check. There are many cheap-skates out there. I am one, but I don't ask people to do a job when I don't intend to pay them.

In case they won't pay, what could be done? Supposing there were no complaints with the quality of work. I guess what could be done would be different depending on if it were a new house (not yet closed), a business, an existing residence with the home owner not paying, etc.

Get a lawyer? If I were rich. I have seen people lose 10's of thousands of dollars defending theirselves in court.

I have heard of a mechanic's lein. Would that need to be done by a lawyer? This may be too large of a question to address. Any advise is appreciated.

 

[480sparky]

Try a contract on the front end.

 

[kwired]

If for minimal $$ chalk it up as a learning experience. You can still try to collect but going to any third party to try to collect is not worth the cost.

I have taken people to small claims court before and got a judgement in my favor. That is all you get is a judgement. It is still up to you to try to collect. The judgement is just one more bad thing on the defendants record. The judgement can be a tool to help you get paid easier but if they are not willing to pay just because you have a judgement you still have work to do to try to get paid.

Your customer knows all of this and will use it to his advantage for as long as possible.

Even having contract before doing any work can still have same results if you find the right customer.

Large companies are generally more aggressive with collections efforts even on low balances, they have more resources and trained people to do this. Small companies give up easier on low overdue balance figuring it is not worth the time or money to further try to collect.

 

[hardworkingstiff]

I normally have a polite conversation about why you (the customer) are not paying. Then, I have a more stern conversation that basically says they (the customer) are forcing me to take action (like small claims court). I tell them their credit rating will take a blow from our efforts.

It used to work, but now so many people are going under it does not seem to work so well.

There comes a point where the loss just becomes part of your education costs.

 

[iwire]

Try a contract on the front end.

Mr Perfect. :roll:

 

[masterinbama]

Here in Alabama if the value is $750 or more they can be arrested for theft of services.

 

[ptonsparky]

Good luck.
I use to just write them off as a loss. I didn't have the time to chase $55 around the block. Enter latest office help. People that don't pay just PHO. She used to work for a collection agency so that helps.

We will be going to court for one in January that we turned over to a collection agency. Original billing was about $1000 of which we collect about half. Legal fees etc for agency are hitting close to $5K of which the collection agency will be able to collect if we win. I still get the $500. Including myself, we will have four of us there to testify from my shop. All collecting wages. I hate to think how many hours have been spent searching phone records, time cards, job tickets etc to collect $500.

Like I say, good luck. I don't do it but cash or credit card before leaving the shop may be the way to go.

 

[Tiger Electrical]

There are some things you can do to minimize exposure to bad debts. My suggestions are:

1. Get the largest advance the law will allow, or the largest advance your client will tolerate.
2. Have progress payments such that if the customer kicks you off the job, you don't lose money.
3. Have small final payments. The final payment is usually the one some customers will cheat you out of or negotiate.
4. Accept credit cards. A credit card and a contract are unstoppable in my experience (Except AmEx). A check is risk.
4. Small collections aren't worth the effort. Throw it into overhead as a cost of business. Like retail stores, everyone pays for shoplifters.

If you have a process for doing the above, your losses will be small and manageable.

 

[satcom]

I have had 2ea situations for minimal bucks, where a threat or other coersion did not force the customer to write the check. There are many cheap-skates out there. I am one, but I don't ask people to do a job when I don't intend to pay them.

In case they won't pay, what could be done? Supposing there were no complaints with the quality of work. I guess what could be done would be different depending on if it were a new house (not yet closed), a business, an existing residence with the home owner not paying, etc.

Get a lawyer? If I were rich. I have seen people lose 10's of thousands of dollars defending theirselves in court.

I have heard of a mechanic's lein. Would that need to be done by a lawyer? This may be too large of a question to address. Any advise is appreciated.

Many of the EC's around here will let the AHJ know that the customer did not pay after the inspection was completed and they say it helps them get paid, I had a few problem customers over the years and the AHJ helped me get paid, but all our work that requires a permit is permited, and we have a contract for every job big, or small.

 

[kwired]

Many of the EC's around here will let the AHJ know that the customer did not pay after the inspection was completed and they say it helps them get paid, I had a few problem customers over the years and the AHJ helped me get paid, but all our work that requires a permit is permited, and we have a contract for every job big, or small.

I'm willing to bet the AHJ has little authority over your or the customers financial problems. He may be able to put a little fear into some customers but people who are really practiced at not paying bills know before hand what they will likely get away with. About the most the AHJ can do is refuse to finalize the permit and he may not legally be able to do that based on financial situations, outside of improper or unpaid permit fees.

 

[petersonra]

Its a cost of doing business.

Personally, I am amazed at how many businesses will enter into a contract with someone they don't know and never even heard of before for thouands of dollars of services and never do a credit check on them. The cost of a credit check is quite low. It's not perfect, but it does weed out the worst of the worst.

 

[satcom]

I'm willing to bet the AHJ has little authority over your or the customers financial problems. He may be able to put a little fear into some customers but people who are really practiced at not paying bills know before hand what they will likely get away with. About the most the AHJ can do is refuse to finalize the permit and he may not legally be able to do that based on financial situations, outside of improper or unpaid permit fees.

It will vary from city to city but in just about all the courts around this area will go after bad checks, and non paid services, a visit to a local court on any thursday evening is a real show, most don't believe they got into so much trouble from passing checks without funds, and not paying for services, from whit i understand the AHJ just sends a note to the town attorney simply saying the job has been completed and passed inspection, no threats just documented action.

 

[kwired]

It will vary from city to city but in just about all the courts around this area will go after bad checks, and non paid services, a visit to a local court on any thursday evening is a real show, most don't believe they got into so much trouble from passing checks without funds, and not paying for services, from whit i understand the AHJ just sends a note to the town attorney simply saying the job has been completed and passed inspection, no threats just documented action.

The transaction is between the contractor and homeowner, how is it any business of the EI, unless it is his company, government agency, or whatever that is owed any money? Or does he run his own collection agency on the side?

Documentation of passing inspection should be in the AHJ records and could be sent to parties involved in any legal action, but that is all the extent an AHJ should be involved.

 

[growler]

I have had 2ea situations for minimal bucks, where a threat or other coersion did not force the customer to write the check.

The real professionals when it comes to useing threats and "other coersion" would be the IRS and there are people that are not going to pay their taxes even if it means going to federal prison.

Before you do the job is the time to consider what you can do about getting paid.

One mistake that's very common is not demanding payment before you leave the job. I have a friend that does a bit of risky work in HVAC installations and he always lets his customer know that it's cash in hand when the job is finished or the unit goes back on the truck and no heat ( it seems to for work for him, cheap prices for promp cash payments ).

Unless a cusotmer has set up an account with your company they have no reason to expect credit of any kind. Don't give any reason for them to expect credit, state your terms for payment up-front on the job order or contract.

 

[jmellc]

My last boss would use a collection agency that was paid on percentage, about 30%, I think. A big chunk but on some accounts, he did get 70% of something, instead of 100% of nothing. Plus, it hurts the customer's credit rating. Collection agencies have been doing this stuff for decades, they know their business. Most of us don't have the energy to pursue deadbeats. I used to know a few guys who could instill fear in the customer if needed. That paid off for them. Most of us don't have that in us. Using an agency does get some of the $ for small effort. Also, the customer learns he can't jerk people around.

So far, I've only been stiffed once, by a customer that really didn't have the $. Job had complications, ran more than expected. She paid me $100 out of a $430 bill. They've had sickness & job loss, etc. and have 2 small kids. I check with them sometimes & may get some $ eventually. I don't have the heart to put an agency on them. They didn't purposely stiff me like some people do to contractors.

 

[satcom]

The transaction is between the contractor and homeowner, how is it any business of the EI, unless it is his company, government agency, or whatever that is owed any money? Or does he run his own collection agency on the side?

Documentation of passing inspection should be in the AHJ records and could be sent to parties involved in any legal action, but that is all the extent an AHJ should be involved.

If you file a complaint for theft of service, you will need your signed contract and the information from the AHJ showing the job has been inspected and passed.

 

[satcom]

The real professionals when it comes to useing threats and "other coersion" would be the IRS and there are people that are not going to pay their taxes even if it means going to federal prison.

Before you do the job is the time to consider what you can do about getting paid.

One mistake that's very common is not demanding payment before you leave the job. I have a friend that does a bit of risky work in HVAC installations and he always lets his customer know that it's cash in hand when the job is finished or the unit goes back on the truck and no heat ( it seems to for work for him, cheap prices for promp cash payments ).

Unless a cusotmer has set up an account with your company they have no reason to expect credit of any kind. Don't give any reason for them to expect credit, state your terms for payment up-front on the job order or contract.

Yup, check and secure before you give then the candy, and avoid all the problems.

 

[tallgirl]

Getting action on a Theft of Services complaint is a lot like getting a cat to do whatever =you= want it to do.

I have a $616 bill -- customer decided to take his own discount -- at the Austin PD right now. Every now and again I give the detective a ring and ask if there's been any progress. Doesn't cost me money to call

In this guys case, all the right warning signs were there, but this was back when I was just getting my own biz going. He was desperate, had high employee turnover, blamed everyone else for all of his own problems.

As others have said, I chalked it up to a learning experience -- but still hound him once a month and of course, call the investigating detective at APD.

Now I expect full payment in advance for any hardware that needs to be shipped, and keep a very tight rein on labor.

 

[dmagyar]

I got burned by a National service racket

I got burned by a National service racket

I got a call one Friday night from someone saying they were with nations service or something like that based in Texas. They needed a local restaurant checked out as the lights over the cooking grill had gone out.

Short of the story, It was located close by, a shut trip c/b connected to the ansul system had tripped causing only the lights over the grill to go out. I ended up submitting a bill for the time and service call. Out of town service, never paid, sent to collection, never paid, over a year later nothing. = 2 hours (non-paid) 3 hours talking to building department, fire marshall = More experience. I should have taken pictures of the mess the original installation looked like in the ceiling, but didn't.

It did get me talking to the local building department & fire marshall as it didn't make too-much sense for just the lighting to go out as a result of the ansul system being activated. At the least it should have made the solenoid controlling the gas flow stop. The ansul system didn't trip, but a power glitch was the culpret for tripping out the shut-trip breaker that was part of the system.

 

[wxstevens]

A ski mask is cheap!:grin: