Collection: How to deal with a client who is going to dodge payment in Internet-based business?
I am a business translator and sourcing agent in Hangzhou, China. Recently a British businessman found me on the Internet and inquired about my service. He agreed on my service charge and I worked for him. Later he decided to source products from India and he said he would make payment later that day for my work. The problem, he didn't make the payment and he became unresponsive and he never replied to my email after that day. I didn't meet him face to face. I feel that he wants to repudiate his debt. How can I deal with it?
4 Answers
If he signed a contract with you under the laws of the UK, you can take him up in court in the UK.
If there was no written contract, then I'm afraid you're out of luck since you're not a UK/EU citizen. You might want to revise your business model to deal with this kind of risk.
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Exactly right. And this is why people get at least partial payment up front or at least get payment into an escrow account. – John 12 years ago
He agreed on my service charge and I worked for himIf you have documentation of this, then (informally - I'm not a lawyer and this isn't legal advice!) you have a good chance of being able to pursue your non-payer. The main question is going to be how to balance the cost and difficulty of pursuing a claim long distance, and the amount of money you are owed.
It's relatively easy to pursue non-payers in the UK, and there are low cost routes to redress. My thought would be that if the amount is small, you may be best advised to put this one down to experience rather than wasting time, money and emotional energy. If it's significant, then you might ask a friendly contact based in the UK (as you're a translator and sourcing agent, I'm sure there's someone who owes you a favour!) to look over the correspondence and map out your options.
Many non-payers will respond rather quickly when faced with legal proceedings, and damage to their credit rating.
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It is only easy to chase non-payers here in the UK if the jurisdiction for the contract is here. It is not clear that this is the case and it could easily be China. – Steve Jones 12 years ago
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That was my reason for suggesting a friendly UK-based contact. If the contract's clearly under Chinese law then @Steven should approach the relevant bodies locally. If it's UK or ambiguous then having someone on the ground who's willing to maybe make a phone call or two and forward correspondence makes pursuit rather more likely to succeed, in my experience. – Jeremy Parsons 12 years ago
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Without writte ncontract you can get UK laws apply - sue the seller where he lives. THe problem is that the cost is NOT Low, because a: for someon in china 10 UK pound is a lot of moeny and b: the cost of long term legal operations are expensive to start with. – Net Tecture 12 years ago
I expect that if you are not in the same country the chance of collecting is rather small and the cost would be rather high. So keep calling and sending emails but don't expect to get paid.
In future you have to look at this a a sales problem not a collections problem. You need to be careful as part of your sales procedures to only work for people who you are confident will pay you. There are less than honest people out there and I think you are going to pay some "Stupid-tax" here. Sorry
Did you have any kind of contract? Is there anything in writing?
Under UK law, a verbal contract is binding, it doesn't have to be a physical document that both parties have signed.
While it is true that you could hire a lawyer to deal with this, it is likely too expensive to be worthwhile. There is a "small claims" track, for claims up to £5000, but I'm not sure if that is available to non-UK parties.
This looks like one of those cases where you have to write off the debt, and out it down to experience. If you are running a genuine business, you'll be able to write it off as a bad debt against profits, so the only thing lost is the time, but you have gained a valuable lesson.
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Even if small claims is avaialble (it should be) he needs a lawyer. Not by the small claims court, but someone needs to represent him - OR he needs to travel to the UK JUST to show up in court, and THAT is going to be more expensive. Plus VISA problems. – Net Tecture 12 years ago
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No. The small claims track in the UK courts is pretty streamlined and anyone can represent themselves, so a lawyer isn't generally necessary. In my answer I did say that it should be written off. This is unlikely to be worthwhile chasing through the courts, although that option exists. – Steve Jones 12 years ago
