Tweet
Setting the scene: We buy lots of goods from mainly European companies. Some of these companies use factors who pay a percentage of the invoice amount directly to our supplier in exchange for a percentage commission on the total invoice costs. This is to give the supplier immediate working capital until such time as the invoices are fully paid by us, and of course other customers.
Now, we have one particular supplier who we do huge amounts of business with. Their Factor who handles the invoice payment sends us statements which bears little resemblance to our true trading/outstanding invoice situation. In fact we are invoiced in Euro's but we pay them in pounds sterling. We never get to know what exchange rate has been applied despite constantly asking and even a 5% error could mean a difference of nearly £10,000 a year.
Now the supplier has gone into some sort of administration. At least the company is up for sale due to financial difficulties. Just before Xmas last year they contacted us and asked us to make future payments directly to them instead of the factor, which we did.
At that time we also had an arrangement with the factor where we had already given them a whole bundle of post dated cheques to clear the older invoices.
I have sent several emails to the factor setting out what I believe is our outstanding balance with a summary of the payments made and the estimated exchange rates applied.
They tell us we owe considerably more but every time we ask for clarification we only get a statement showing outstanding invoices, no payments, exchange rates or credits applied.
It's my belief that the payments made directly to the supplier by SWIFT to their bank account haven't been deducted from the overall account balance. The little sticker on each invoice says
"This debt has been assigned to ******* by means of subrogation under the terms of a factoring contract. In order to be fully discharged of this debt please make payments as follows (and then they give their bank details).
Any objection to this bill or its terms must be reported to to (the company) in Paris"
Since they didn't receive the payments we made directly to the supplier with whom we do naturally have an agreement/contract they either know of the payments and don't consider them as having been made under the terms of the wording on the little sticker above, or they purport not to know of them despite my telling them about the payments.
Since some of the invoices are quite old they are threatening to put the account into the hands of a collection agency with potential County Court action.
What I need to know is this. Are we in a contract with this factor anyway? I mean, we haven't made any arrangement at all with them. It is the supplier who made the contract with them to factor our invoices. We signed no agreement to this end so as I see it we have no contract. Even though the supplier has signed the Factoring agreement does the factoring company have the right to pursue us directly?
The supplier is French and the Factoring company is also French but it's legal arm has a branch in London who pressure us with threats of County Court action.
Your considered opinion would be most helpful.
Now, we have one particular supplier who we do huge amounts of business with. Their Factor who handles the invoice payment sends us statements which bears little resemblance to our true trading/outstanding invoice situation. In fact we are invoiced in Euro's but we pay them in pounds sterling. We never get to know what exchange rate has been applied despite constantly asking and even a 5% error could mean a difference of nearly £10,000 a year.
Now the supplier has gone into some sort of administration. At least the company is up for sale due to financial difficulties. Just before Xmas last year they contacted us and asked us to make future payments directly to them instead of the factor, which we did.
At that time we also had an arrangement with the factor where we had already given them a whole bundle of post dated cheques to clear the older invoices.
I have sent several emails to the factor setting out what I believe is our outstanding balance with a summary of the payments made and the estimated exchange rates applied.
They tell us we owe considerably more but every time we ask for clarification we only get a statement showing outstanding invoices, no payments, exchange rates or credits applied.
It's my belief that the payments made directly to the supplier by SWIFT to their bank account haven't been deducted from the overall account balance. The little sticker on each invoice says
"This debt has been assigned to ******* by means of subrogation under the terms of a factoring contract. In order to be fully discharged of this debt please make payments as follows (and then they give their bank details).
Any objection to this bill or its terms must be reported to to (the company) in Paris"
Since they didn't receive the payments we made directly to the supplier with whom we do naturally have an agreement/contract they either know of the payments and don't consider them as having been made under the terms of the wording on the little sticker above, or they purport not to know of them despite my telling them about the payments.
Since some of the invoices are quite old they are threatening to put the account into the hands of a collection agency with potential County Court action.
What I need to know is this. Are we in a contract with this factor anyway? I mean, we haven't made any arrangement at all with them. It is the supplier who made the contract with them to factor our invoices. We signed no agreement to this end so as I see it we have no contract. Even though the supplier has signed the Factoring agreement does the factoring company have the right to pursue us directly?
The supplier is French and the Factoring company is also French but it's legal arm has a branch in London who pressure us with threats of County Court action.
Your considered opinion would be most helpful.
Comment