Member Article

Businesses face small claims delays

Small firms trying to take action against late payers face delays as the government’s small claims service deals with a backlog of customers trying to recover bank charges. The Money Claim Online small claims service (MCOL) is now reportedly handling 600 new cases each day – twice that of 2006 – and the increase is being put down to the deluge of claims against banks.

Users are now being advised to log on outside of office hours as the site is grinding to an apparent standstill. Small firms that are struggling to deal with late paying clients and wish to make a claim could be hit hard by the delays, according to the Forum of Private Business (FPB).

A spokesperson at the FPB said: “There is a risk that MCOL grinding to halt could impact on smaller firms that use the service to tackle late payment. “This issue is one of increasing importance to smaller firms who are quite often made to pay for changes in payment terms by large customers. Without a swift system for the resolution of late payment, cash flow is slow and ultimately it could put the viability of the company owed money at risk.”

However, the FPB said there was no substitute for an ‘in-house’ system for dealing with customers who are slow to pay. The organisation advised firms to look at the credit worthiness of customers by examining past history in dealing with them, or even using a credit reference firm.

This was posted in Bdaily's Members' News section by Ruth Mitchell .