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Re: Statutory Demand Threat Personally For Company Account
Letter so far. It's very long so please advise if you think I've gone on a bit too much! Don't suppose I'll get an answer for a while, off to watch England's first World Cup match. C'mon England!!
Dear ABC,
As I have received advice from a solicitor but not instructed them to act on my behalf I will not be providing you with their details at this time.
When I originally spoke with xxx xxxx, your representative, back in Sept 2013, the cash advance was sold to me on the basis that it was the same as an arrangement I had at that time with another provider, MCE. The basis being that, as repayments were by way of a small percentage taken from the proceeds of our credit card sales, Merchant A and our PDQ provider Merchant B, repayment of the advance would fluctuate in line with our turnover, thus not causing us to overstretch in quiet times but allowing more rapid repayment during busy times. It was clearly expressed that this was the principal feature of this type of funding.
It was also explained to me by xxx that our average monthly turnover would dictate the amount that could be advanced. 10 months statements from MCE and 3 months previous statements from both card providers were provided to xxx for her to calculate that sum. An advance amount of £20,000 with a total repayable of £26,000 was offered and agreed. It was explained to me that an average monthly turnover should be maintained throughout the agreement period to service repayments. At no time did xxx ever state that a fixed minimum monthly turnover was required and it was clear from our discussions and the statements provided at that time that our turnover fluctuated in a seasonal manner throughout the year. Further, as the agreement was to take exactly 14% of our credit card sales and the rest returned to us, a minimum monthly turnover would have no relevance.
xxx also advised that we would receive regular monthly emailed statements. Despite the ‘agreement’ beginning on the payment date of xx.xx.13, the first statement was only sent on xx Jan. No statement was sent in February, 3 were sent in March, 1 was sent in April, no statement was sent in May and no statement has so far been sent in June.
At the beginning of the agreement I signed, witnessed and dated 2 copies of a colour printed document. As I had not received back a copy I asked xxxx xx to send a true copy. Instead of receiving a true copy, xxxx emailed a black and white photocopy of an agreement that was not signed by ABC and had page 7 missing. When I pressed again for at least a scanned colour copy, xxxx admitted that it was not possible to do so and emailed another photocopy, this time signed and witnessed by ABC and certified by you on xx.xx.14 as being a ‘true copy of the original document’. Although page 7 was included this time, page 6 was not! Given the discrepancies with the ‘agreement’ it is now impossible for me to verify that either of the copies was one that I signed.
Despite not being able to verify it, as you are citing breaches of said agreement(s), for the purposes of this letter, I will refer to it as the ‘agreement’.
In your email dated xx.xx.14 you state “The Agreement also specified that you must maintain a minimum monthly Turnover of £xx,xxx to be able to pay the Purchase Amount within the Sale and Purchase period of 12 months.” As ABC are not receiving payments from Merchant A, GCL’s monthly turnover could not possibly be known to ABC. Moreover and as previously mentioned, as the ‘agreement’ provides only for repayment by way of a fixed percentage from card sales with the remainder paid to GCL, an exact minimum monthly turnover cannot be relevant. In addition, whether the purchase amount will be paid within the 12 month period or not cannot be known. This is supported by the inclusion of clause E. c. where it states that any shortfall at the end of the purchase period should be paid forthwith. Clause D also states that in the event that it is apparent that the ‘minimum monthly turnover’ is not being maintained ABC may impose clause D. i. or D. ii with 7 days notice. ABC did neither.
Also in your email dated xx.xx.14 you state “This arrangement has been breached because Merchant A, your processor is not prepared to accept your agreement and pass the Card Receivables to us as agreed”. The covering letter you sent with an additional agreement dated xx.xx.13 contradicts this: “We have today received confirmation from your PDQ providers Merchant A and Mercahnt B that they have received your request to transfer all receipts to the trust account with Ashley Business Cash Ltd. They have informed us that they are currently processing this request which should take effect in the next few days. Further if your PDQ provider does not process your instructions within 5 working days you undertake to pay to the trust account and by bacs the sum of £xxx which is equivalent to the weekly percentage we would have expected to receive through the card receivables.” It is clear from the sequence of events and your confirmation of the same that Merchant A were processing our instructions in accordance with the ‘agreement’. However, when asked to provide further proof of the account, ABC were unable to do so and it was this and this alone that prevented Merchant A from completing our instructions. This was a situation that GCL was powerless to change. Moreover, it is at the very least questionable whether a term of an ‘agreement’ can be wholly reliant on the actions of a 3rd party who is not party to that agreement.
In line with the ‘agreement’ our PDQ provider Merchant B did carry out our instructions and they continue to make payments to ABC to this day. Your letter only states what may happen if both providers do not make payments. It does not state what happens if one of two providers does make payments. As such it does not tally that all of the £xxx ‘average weekly payment’ should be paid in the event that one provider does not make the payments.
In addition, the attached ‘agreement’ sent with the aforementioned letter is confusing at best, if not contradictory. Clause 1 requires both providers to make payments but there is no timescale specified. Clause 2 requires our ‘PDQ providers’ to make payments within 5 days. Our PDQ provider, Merchant B, did make payments within 5 days so as above; it does not tally that the whole £xxx 'average weekly payment' be imposed. Regardless, as the ‘agreement’ was to take a fixed percentage from our card receivables and the remainder returned to GCF, it cannot be known that a sum of £xxx ‘equivalent to the weekly percentage we would have expected to receive through card receivables’ was accurate.
Despite there being no payments made from our provider Merchant A to ABC from the commencement of the ‘agreement’, ABC failed to notify GCL. Immediately on receiving a request from Merchant A for more information to change the receiving bank account, I notified ABC on xx.xx.14. However, ABC did nothing until approximately xx.xx.14 and only after 2 prompts from me. As such GCL cannot be held responsible for ‘arrears’ that may have accrued in that time.
The main ‘agreement’ is also confusing and contradictory.
1.) There is no specific clause that states that all card receivables must be paid into ABC’s bank account.
2.) There is no clause that states that a minimum weekly payment of £xxx must be made.
3.) Clause A specifies a percentage of all card receivable that must be paid to ABC. This is further supported by clauses B and clause D. ii) that both state that the remainder of card receivables once the specified percentage has been taken will be paid to WFL. Clause A however, also specifies a minimum monthly turnover that must be maintained but if a fixed percentage of card receivables is being taken and the remainder paid to GCL is not relevant.
4.) There is no clause that states that you may retain 100% of card receivables from any account with or without notice.
In a telephone conversation with xxxxx xxx on or around xx.xx.14 she admitted that ABC could not provide a void cheque or letter from their bank to allow Merchant A to verify the account as requested by them. xxxxx went on to state that Merchant A would ask for such information, knowing that ABC could not provide it. The reason being, that Merchant A had a competing product and were intentionally preventing the completion of the request and thus thwarting ABC’s deal. Being aware of this practice in xxxx, it seems likely that ABC was aware at the commencement of the ‘agreement’, particularly given that a request for information I sent in xxxx was ignored until xxxx. As such it would appear that the basic business model of the agreement is flawed, particularly as Merchant A are a major provider that ABC most likely have dealt with many times before.
Letter so far. It's very long so please advise if you think I've gone on a bit too much! Don't suppose I'll get an answer for a while, off to watch England's first World Cup match. C'mon England!!
Dear ABC,
As I have received advice from a solicitor but not instructed them to act on my behalf I will not be providing you with their details at this time.
When I originally spoke with xxx xxxx, your representative, back in Sept 2013, the cash advance was sold to me on the basis that it was the same as an arrangement I had at that time with another provider, MCE. The basis being that, as repayments were by way of a small percentage taken from the proceeds of our credit card sales, Merchant A and our PDQ provider Merchant B, repayment of the advance would fluctuate in line with our turnover, thus not causing us to overstretch in quiet times but allowing more rapid repayment during busy times. It was clearly expressed that this was the principal feature of this type of funding.
It was also explained to me by xxx that our average monthly turnover would dictate the amount that could be advanced. 10 months statements from MCE and 3 months previous statements from both card providers were provided to xxx for her to calculate that sum. An advance amount of £20,000 with a total repayable of £26,000 was offered and agreed. It was explained to me that an average monthly turnover should be maintained throughout the agreement period to service repayments. At no time did xxx ever state that a fixed minimum monthly turnover was required and it was clear from our discussions and the statements provided at that time that our turnover fluctuated in a seasonal manner throughout the year. Further, as the agreement was to take exactly 14% of our credit card sales and the rest returned to us, a minimum monthly turnover would have no relevance.
xxx also advised that we would receive regular monthly emailed statements. Despite the ‘agreement’ beginning on the payment date of xx.xx.13, the first statement was only sent on xx Jan. No statement was sent in February, 3 were sent in March, 1 was sent in April, no statement was sent in May and no statement has so far been sent in June.
At the beginning of the agreement I signed, witnessed and dated 2 copies of a colour printed document. As I had not received back a copy I asked xxxx xx to send a true copy. Instead of receiving a true copy, xxxx emailed a black and white photocopy of an agreement that was not signed by ABC and had page 7 missing. When I pressed again for at least a scanned colour copy, xxxx admitted that it was not possible to do so and emailed another photocopy, this time signed and witnessed by ABC and certified by you on xx.xx.14 as being a ‘true copy of the original document’. Although page 7 was included this time, page 6 was not! Given the discrepancies with the ‘agreement’ it is now impossible for me to verify that either of the copies was one that I signed.
Despite not being able to verify it, as you are citing breaches of said agreement(s), for the purposes of this letter, I will refer to it as the ‘agreement’.
In your email dated xx.xx.14 you state “The Agreement also specified that you must maintain a minimum monthly Turnover of £xx,xxx to be able to pay the Purchase Amount within the Sale and Purchase period of 12 months.” As ABC are not receiving payments from Merchant A, GCL’s monthly turnover could not possibly be known to ABC. Moreover and as previously mentioned, as the ‘agreement’ provides only for repayment by way of a fixed percentage from card sales with the remainder paid to GCL, an exact minimum monthly turnover cannot be relevant. In addition, whether the purchase amount will be paid within the 12 month period or not cannot be known. This is supported by the inclusion of clause E. c. where it states that any shortfall at the end of the purchase period should be paid forthwith. Clause D also states that in the event that it is apparent that the ‘minimum monthly turnover’ is not being maintained ABC may impose clause D. i. or D. ii with 7 days notice. ABC did neither.
Also in your email dated xx.xx.14 you state “This arrangement has been breached because Merchant A, your processor is not prepared to accept your agreement and pass the Card Receivables to us as agreed”. The covering letter you sent with an additional agreement dated xx.xx.13 contradicts this: “We have today received confirmation from your PDQ providers Merchant A and Mercahnt B that they have received your request to transfer all receipts to the trust account with Ashley Business Cash Ltd. They have informed us that they are currently processing this request which should take effect in the next few days. Further if your PDQ provider does not process your instructions within 5 working days you undertake to pay to the trust account and by bacs the sum of £xxx which is equivalent to the weekly percentage we would have expected to receive through the card receivables.” It is clear from the sequence of events and your confirmation of the same that Merchant A were processing our instructions in accordance with the ‘agreement’. However, when asked to provide further proof of the account, ABC were unable to do so and it was this and this alone that prevented Merchant A from completing our instructions. This was a situation that GCL was powerless to change. Moreover, it is at the very least questionable whether a term of an ‘agreement’ can be wholly reliant on the actions of a 3rd party who is not party to that agreement.
In line with the ‘agreement’ our PDQ provider Merchant B did carry out our instructions and they continue to make payments to ABC to this day. Your letter only states what may happen if both providers do not make payments. It does not state what happens if one of two providers does make payments. As such it does not tally that all of the £xxx ‘average weekly payment’ should be paid in the event that one provider does not make the payments.
In addition, the attached ‘agreement’ sent with the aforementioned letter is confusing at best, if not contradictory. Clause 1 requires both providers to make payments but there is no timescale specified. Clause 2 requires our ‘PDQ providers’ to make payments within 5 days. Our PDQ provider, Merchant B, did make payments within 5 days so as above; it does not tally that the whole £xxx 'average weekly payment' be imposed. Regardless, as the ‘agreement’ was to take a fixed percentage from our card receivables and the remainder returned to GCF, it cannot be known that a sum of £xxx ‘equivalent to the weekly percentage we would have expected to receive through card receivables’ was accurate.
Despite there being no payments made from our provider Merchant A to ABC from the commencement of the ‘agreement’, ABC failed to notify GCL. Immediately on receiving a request from Merchant A for more information to change the receiving bank account, I notified ABC on xx.xx.14. However, ABC did nothing until approximately xx.xx.14 and only after 2 prompts from me. As such GCL cannot be held responsible for ‘arrears’ that may have accrued in that time.
The main ‘agreement’ is also confusing and contradictory.
1.) There is no specific clause that states that all card receivables must be paid into ABC’s bank account.
2.) There is no clause that states that a minimum weekly payment of £xxx must be made.
3.) Clause A specifies a percentage of all card receivable that must be paid to ABC. This is further supported by clauses B and clause D. ii) that both state that the remainder of card receivables once the specified percentage has been taken will be paid to WFL. Clause A however, also specifies a minimum monthly turnover that must be maintained but if a fixed percentage of card receivables is being taken and the remainder paid to GCL is not relevant.
4.) There is no clause that states that you may retain 100% of card receivables from any account with or without notice.
In a telephone conversation with xxxxx xxx on or around xx.xx.14 she admitted that ABC could not provide a void cheque or letter from their bank to allow Merchant A to verify the account as requested by them. xxxxx went on to state that Merchant A would ask for such information, knowing that ABC could not provide it. The reason being, that Merchant A had a competing product and were intentionally preventing the completion of the request and thus thwarting ABC’s deal. Being aware of this practice in xxxx, it seems likely that ABC was aware at the commencement of the ‘agreement’, particularly given that a request for information I sent in xxxx was ignored until xxxx. As such it would appear that the basic business model of the agreement is flawed, particularly as Merchant A are a major provider that ABC most likely have dealt with many times before.
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