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Law firm: Companies should collect debts

11/04/2007

Companies are being encouraged to collect debts from people who consistently pay late, it has emerged.

Jonathan Blair, from north-east law firm Dickinson Dees, told the Northern Echo that the Late Payment Act could help businesses reclaim interest on what they are owed.

Explaining that firms in the UK can make a claim for interest on the debt even if there is no contractual right to interest between the parties, Mr Blair said that a compensation charge between £40 and £100 is also possible.

"It doesn`t matter how large or small the debt is, if it remains due, you can claim interest," he told the publication.

"And in many cases, the threat of additional costs is enough to prompt payment from debtors."

Late payments on commercial business-to-business and public transactions are eligible for businesses to make claims on, he added.

The suggestion comes amid growing concern among various consumer watchdogs about creditors` exploitation of vulnerable borrowers.

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