Au Royaume Uni les entreprises de recouvrement de créances

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Au Royaume Uni les entreprises de recouvrement de créances sont soumises à  des restrictions d’action par le gouvernement britannique depuis le 03/01/2020. Les principales restrictions sont détaillées ci-dessous.

 

  1. Les entreprises de recouvrement de créances ne peuvent pas pour le moment (la procédure applicable est suspendue) initier une procédure de liquidation contre des sociétés à responsabilité limitée du fait de factures impayées. Il est toujours possible de liquider une entreprise au Royaume-Uni, mais il faut un jugement préalable, le faire signifier et si vous ne recevez toujours pas de paiement, un juge ou un shérif peut envisager de vous accorder la mise en liquidation de la société concernée. La mise en liquidation relève de l’appréciation discrétionnaire du juge ou du shérif. Les décisions en faveur des créanciers ont été rares en 2020 car les tribunaux ont tendance à favoriser les débiteurs. Cela s’applique à toutes les dettes commerciales accumulées après le 1/3/2020 jusqu’à ce jour. Cependant les règles normales s’appliquent aux dettes accumulées avant le 1/3/2020.
  2. Le recouvrement de créance pour tout type de dette liée à la consommation privée est strictement interdit, cela s’applique à toutes les dettes quelle que soit la date à laquelle celle-ci a été constituée.

La loi qui interdit le recouvrement de créances liée à la consommation et bloque les procédures de liquidation a été prorogée trois fois, elle devait prendre fin le 30/09/2020, puis à nouveau le 31/12/2020, et a été prorogée jusqu’au 1/04/2021. Elle a été prorogée à nouveau par le gouvernement britannique jusqu’au 30/06/2021. C’est une nouvelle très décevante pour les créanciers et pour les professionnels du recouvrement de créances au Royaume Uni car cela entrave vraiment ce que nous pouvons faire et nous ne pouvons pas menacer les entreprises avec la liquidation, l’un des principaux leviers pour recouvrer les dettes commerciales.

 

L’amélioration de la situation sanitaire en lien avec l’intense campagne de vaccination au Royaume-Uni devrait conduire à un retour a la normale dans les prochaines semaines pour le bien-être de la trésorerie des créanciers.

Georges Vonfelt dirigeant de GEVO Recouvrement de Créances

Fondateur du réseau de recouvrement de créances internationales SEKUNDI

In France, the number of companies having been the subject of a bankruptcy procedure decreased

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lower banruptcies rate

decrease of bankruptcies in France

In France, the number of companies having been the subject of a bankruptcy procedure decreased by 4.8% last year compared to 2018. There were 52,000 failures in 2019. These are 2,500 companies less than in 2018 who went to bankruptcy or were placed in receivership or safeguard proceedings. In the fourth quarter of 2019 alone, the decline even accelerated.  The improvement is visible in almost all trades. The number of liquidations has dropped significantly. In construction, trade, industry, business and personal services, and catering, bankruptcy is declining sharply. Road freight transport and IT and communications are sectors which experienced an increase in bankruptcy last year. One of the explanations for this good overall performance in 2019 is that household consumption held up even if it was not as dynamic as we might have expected. The domestic economic context is rather better than that of our neighbours. Job creation is still strong in 2019, which also contributed to good economic activity. Second, interest rates are still very low, which helps companies finance themselves at lower cost. After the crisis of “yellow vests”, the State was able to support companies in difficulty.  Small businesses have held up well last year if they haven’t fallen, that doesn’t mean they are doing well. Many suffer. The treasuries continue to be strained. Another fact that puts the drop in corporate bankruptcy a bit into perspective last year, many SMEs and even a few mid-size companies have experienced difficulties. Almost 350 SMEs with more than 50 employees went to bankruptcy in 2019, almost one per day. In the last three months of the year, 100 failed. The difficulties of SMEs are concentrated in the manufacturing industry. Some face forced transformation issues linked to sustainable development, in the automobile for example. As a result of the bankruptcy of SMEs, the number of jobs threatened by bankruptcy increased slightly in 2019, by 1.6%, to 175,000. How will the coming year go? Growth is expected by economists to a level comparable to that of 2019, that is to say from 1.2% to 1.3%. For 2020, there is no fear of a sharp increase in the number of bankruptcy but it seems unlikely that we will fall below the threshold of 52,000 collective proceedings. We could be around 53,000 failures for the year 2020.

 

Hypermarkets in France a new deal. A lot of Hypermarkets make losses.

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Hypermarkets the new deal

Hypermarkets in France

Hypermarkets in France a new deal.

In France, consumption declined in most Hypermarkets in 2019. The glass is half empty or half full. Optimists will find that two thirds of the Carrefour Hypermarkets in France make money. Pessimists will point out that a third of the park pulls down the result of the branch. The issue is also sensitive to Auchan, the other chain of very large Hypermarkets. In its December issue, the trade magazine “Linear” examined the “evil of self-service hypermarkets” and advanced “the real numbers”. The trade magazine recalls that the self-service hypermarkets Carrefour, Auchan and Casino recorded sales of 2.7 billion euros between 2014 and 2018, of which one billion for the first two. Consumer habits are changing. Consumers commute less and tend to local supermarkets. The shift from non-food shopping to e-commerce and specialized supermarkets also explains the dissatisfaction of certain Hypermarkets. “Linear” keeps its figures from union sources. According to this information, the decline in sales is associated with a decrease in profitability. Carrefour France’s hyper integrated and franchised companies reportedly had a current operating deficit of 132 million euros in 2018. For comparison: Auchan Retail France generated a profit of 479 million in 2014. Operating profit (80% of activities are carried out by Hypermarkets) decreased to -155 million. The magazine also confirms that “89 businesses would make losses” at Carrefour Hypermarkets SAS ‘191 locations in 2018. The Carrefour Group does not comment on these figures, which it does not publish. In an interview with “Linear,” Marie Cheval, general manager of consumer markets, only states that 41 Hypermarkets will launch Rebond, “an operating model that inspectors entrust to directors to compensate for deteriorating profitability.” Dejan Terglav, General Secretary of FGTA-FO from Carrefour, responds to “Les Echos” and assesses all these figures as “likely”. He fears that the group will default to leasing around twenty hypermarkets. Carrefour has started to revive its consumer markets. 2018 is the first of the Group’s transformation plan that has invested particularly in competitiveness and prices. This strained numbers and margins. Kepler Cheuvreux underlined this “conscious strategy”. Since then, sales space reductions have been initiated, such as the rental of space to Darty. The Hypermarket soldier needs to be saved.

Who pays debt recovery costs in Europe

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Who pays debt recovery costs in Europe In Germany the debt recovery costs charged to private or professional debtors are fixed by law. The list of debt recovery costs is detailed by the legislator, which goes as far as quantifying the amounts that can be claimed for a simple reminder letter. This is a major difference between France and Germany, France going so far as to prohibit the recovery of individuals. The German Federal Ministry of Justice and Consumer Protection wants to reduce debt recovery costs by 50% with a new draft “law to improve consumer protection in collection costs”. German professionals are “upwind” against this reform, their arguments being presented below. This reduction in debt collection costs would affect not only debt collection agencies and lawyers, but also creditors facing higher costs. According to the recovery professionals, this would be a reversal of the polluter-pays principle. Typically, two to six months elapse between receiving and closing a file. And in cases where a trial becomes inevitable, the handling of the case will take three to six yearsThe objective remains to recover the claim amicably. In this regard, even before the first reminder letter, many test steps, data comparisons and solvency checks are performed. On this basis, an individualized debt recovery strategy in relation to the debtor’s situation is determined. In this way, recovery professionals can decide, through which communication, how often and for what purpose, to manage this file. The German project stipulates that consumers will only be required to pay the debt recovery costs of a collection service provider or a lawyer if they have been informed in time. The project would impose the information of the debtor by an undeniable and proven action of the financial risks it incurs if it does not pay its bills. The decrease in the recovery costs payable would result in a profound change in the profitability of the German debt collection services. For the German recovery professional’s two possibilities open up to them: either the collection service providers reduce the scope of their activities by adapting them to their revenue prospects. Or the creditors bear part of the costs of the collection service. For the Germans it is a reversal of the polluter-pays principle. Because it is not the creditor who misbehaved, but the debtor, and this one, should pay for his bad behaviour. The Germans also want to differentiate between private and commercial debtors. Late payments in companies must be as low as possible. In order to achieve this objective, the German legal system is expected to inflict serious legal consequences on debtor companies that do not respect their commitments. In general, the German collection professionals ask that we move away from the flat-rate collection costs and replace it with a gradation of these costs related to the difficulty of collection. The problem of recovering unpaid bills is a hot topic in all developed countries. Very often individuals are protected and for companies the commercial relationship that we are trying to maintain is a real obstacle to rigorous practices in terms of debt recovery costs. Prevention is one of the first levels to be used to first make every effort to ensure that payment delays are reduced to the minimum. The development of digital and new means of payment will certainly change the situation by significantly reducing outstanding payments. However, it is indisputable that we must penalize the bad coaters and the professional latecomers who use and abuse supplier credit. Finally, it is up to the legislator to put in place simple and inexpensive judicial systems and procedures to sanction bad faith behaviour. It is absolutely abnormal that in very many cases no proceedings are initiated because the costs to be incurred are disproportionate to the unpaid claim. The professionals of bad faith are perfectly informed. Georges Vonfelt GEVO

B to C debt collection costs in France a nightmarish situation when debtor is an individual.

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B to C debt collection costs in France a nightmarish situation. The B to C debt collection costs in France were the subject of a new judicial decision dated September 26, 2019. This decision concerns the collection costs charged to individuals by the collection agencies. The decision of the Administrative Court is as follows. The collection of damages from the debtor must, except to qualify as deceptive marketing practices, be preceded by a justification of the nature and amount of the damage alleged. According to the judges the only fact for the administration to note that neither the proof of bad faith, nor that of the reality and the quantum of the damage, were reported, was sufficient to reclassify the damages and interests in debt collection costs constituting deceptive marketing practices. The burden of proof of the bad faith of the debtor and the loss suffered is on the creditor. Failing this, the collection firm is exposed to heavy criminal penalties for deceptive marketing practices. The context of this decision is related to the practices of some French recovery firms that try to make debtors pay damages by referring to Article 1231-6 of the Civil Code. The root of the problem is related to the small amount of the claims in the B to C files. To make their actions profitable some collection firms do not hesitate to claim substantial damages from the debtors to cover the debt collection costs incurred. The Court’s decision confirms that in practice and for debtors with a private person status, it is in fact impossible to claim recovery costs except to risk very heavy penalties. How to produce receipts for debts of a few tens of euros. And it is equally true that not paying small bills for an individual is a real lawless area, the debtor not in fact risk anything to pay his bills when he sings, if he decides to pay. No one is going to expose the debt collection costs of proceedings for a claim of a few tens of euros.

Business failures in France

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Business failures in France. It’s an encouraging signal for the French economy: French companies are less likely to experience Business failures. Their number was 10,500 in the third quarter of 2019, according to the count made by the company Altares, down 6.4% compared to the same period last year.

This is an exceptionally low level, unmatched since 2007. The improvement is notable in construction, retail, catering and personal services. Even sectors such as business services and industry – particularly agribusiness – are experiencing a decline in Business failures.

Increase in claims of large Companies

All is not rosy however, since the average size of the failing companies increases. Thus, 73 companies with more than 50 employees went to court in the third quarter for Business failures, against 56 at the same time last year. As a result, the number of jobs threatened by these Business failures is growing. Nearly 37,300 jobs are at risk, 2,350 more than in the summer of 2018. These Companies alone account for nearly one third of jobs at risk.

“It has been several quarters since the Business failures of large Companies increase quite markedly,” said Thierry Millon, director of studies of the company Altares. Children’s clothing stores Orchestra, the airlines eagle Azur and XL Airways suffered disappointments last quarter.

Threats in the fourth quarter

Why are some large Companies experiencing more Business failures than before? “The activity has been pretty good since the end of 2015, but some companies have used their money to manage their working capital needs and not to solidify their growth. Today, with the slowdown, they are in financial difficulties, “says the expert who also notes” a degradation of payment behaviour since the spring. ” Vigilance is therefore in order. With a particular focus on the fourth quarter, marked last year by increased difficulties for some businesses and in the restoration because of the movement of “yellow vests”. However, this winter, the public transport strike on the pension reform is threatening.

Signs of weakness in the automobile and construction

Without large-scale social movement, “this year, the number of Business failures should be around 53,000, down from 2018 when France had experienced 54,700 Business failures, according to Thierry Millon. Again, this would be the lowest level since 2007. Even if it should remain low next year, the loss ratio will however hard to maintain at this low water level next year. “Some sectors are showing obvious signs of weakness. This is the case of the automobile or construction for example, “said the leader of Altares. On the other hand, companies should be able to count on the expected healthy performance of household consumption.

Secret information from a debt collection company.

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The secret information of a debt collection company is a first-rate tool for assessing and analysing the solvency of a company. The proof of this is the example of a large company with over € 20,000,000 turnover whose accounts are supervised and validated by an auditor, and which enjoys a good credit rating with the rating agencies. This company filed for bankruptcy overnight. How could the credit rating agencies validating the solvency of the company be so wrong? Why has the auditor not been alerted?

In reality, this company used a large number of foreign subcontractors and did not pay their invoices changing supplier on multiple occasions, as unpaid foreign suppliers were reluctant to act because of the relative modesty of their claims.

The unpaid invoice files against this company have accumulated with a debt collection company specializing in international debts. The latter immediately suspected serious difficulties when it became impossible to reach anyone in the accounting department. Small instalments were paid irregularly. A payment order for a small fee was contested by the company’s lawyer without any indication of any reason. You did not have to be a top-flight financial analyst to understand that this company was in fact terminating payments. Judicial action for a few thousand euros caused the filing for Bankruptcy.

Another example of a well-hidden secret is the following. The subsidiary of a large group contacts a debt collection company. She wishes to entrust him with the recovery of all his 6-digit client account. As this is a company specializing in B to B services, the customer post is the main or only asset of this company. It turns out during the processes initiated by the debt collection company that most of these claims were disputed, that the disputes were serious and the position of the creditor company legally fragile. In fact, the sole purpose of the creditor was to defend the client item vis-à-vis its auditor by acting with a debt collection company to avoid a massive depreciation of this asset.

The debt collection companies so decried and vilified would have a role to play in the prevention of the difficulties of the companies by having for example a right of information strictly confidential of the organs of control to prevent before it is too late to cure.

General terms and conditions of sale between professionals in France mandatory information’s

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General terms and conditions of sale between professionals in France mandatory information’s.

Obligation of companies

In France the basis of commercial negotiation between professionals, the General terms and conditions of sale must be communicated to buyers who request it. Which mentions should be included? How to communicate them? What sanctions in case of non-compliance with these obligations?

Between professionals (B2B), the General terms and conditions of sale must be communicated to buyers or service seekers who request it. In this case, they must respect specific rules both in terms of their drafting and their mode of communication.

This obligation to communicate the General terms and conditions of sale between does not apply if no customer requests it.

The mandatory mentions of the General terms and conditions of sale between professionals

When they are formalized, the General terms and conditions of sale between professionals must obligatorily include a number of mandatory information provided for in Article L.441-1 of the French Commercial Code. They must include:

  • Settlement terms (including terms relating to payment terms, penalties for late payment and recovery fees)
  • Any price reductions and discount conditions
  • The unit price scale.

Particular mentions

The General terms and conditions of sale may also include optional information such as the terms of termination of the contract, clauses relating to cases of force majeure (natural disaster for example), retention of title or limitation of liability of the seller.

The rules of communication of the General terms and conditions of sale between professionals

If no particular formalism is required by law, the general conditions of sale must be fixed in writing, by any means constituting a durable medium. Generally, the general conditions of sale are found on pre-contractual documents (advertising documents, etc.), contractual documents (purchase orders, contracts, etc.) and annexes (signs, posters affixed to points of sale, etc.). ).

It is possible to establish general conditions of sale differentiated according to the category of buyers of products or applicants for services. To define its categories of buyers, a distinction must be made between:

  • Wholesaler or trader (B2B) buyer
  • Supermarkets
  • Any specialized company
  • distance selling businesses.

The obligation to communicate the general conditions of sale applies only for professionals of the category concerned. The supplier can therefore write as many different terms and conditions as there are categories of buyers.

 

What sanctions in case of non-compliance with the general conditions of sale between professionals?

In the event of a breach of the drafting and communication requirements of the general conditions of sale, Article L.441-1 of the French Commercial Code provides for an administrative fine of up to:

  • € 15,000 for a natural person
  • 75 000 € for one personeiffel-tower-1156146__340

Commercial Debt Collection and Business Bankruptcy

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avoid empty pockets

avoid empty pockets

Commercial Debt Collection and business bankruptcy are sometimes linked. When a file arrives in a debt collection office, when the amount of the debt recovery is high and the debtor’s situation is fragile the debt collection actions sometimes lead to the bankruptcy of the debtor company. One can therefore ask the question of the relevance of the action of the debt collection company. In reality it is not the recovery actions that led to the bankruptcy of the company it was certainly already in a state of cessation of payment. The recovery procedures are only the drops of water that broke the camel’s back. The bankruptcy procedures are mostly long and dead-end, the creditor said unsecured (the one who has no security) having very little chance of recovering what is due to him. Should we in these cases renounce recovery actions? the answer is clearly no because only the one who acts keeps a chance to get his bills paid. One of the most common prevention tips was to tell suppliers to learn about the creditworthiness of their customers and keep their credit limit under supervision. This common-sense rule now faces new difficulties. Indeed, the secret of business in a world in full transparency becomes more and more opaque. In France, for example, it is now possible for small and medium-sized businesses to make their balance sheets confidential, whereas a few years ago this was considered a crime that could be prosecuted by the public prosecutor’s office. It is no longer uncommon to see companies that are well-rated by intelligence companies suddenly go bankrupt. One of the remedies to business bankruptcy losses is to adjust the credit limit to the size of the client. It is common to see the debt collection of important files that concern very small businesses. When a company is in trouble it will rush into the arms of a supplier ready to give it credit. The salesperson will be enthusiastic about developing his turnover and everyone will fall into the trap of supplier credit. It is the exporting companies that are setting up in a new country that are most likely to fall into this kind of trap. The losses and debt collection difficulties are in fact linked to the short-term profit policy which penalizes the exporters who have not planned a moderate development and supported by a substantial budget.

90 % of the French B to B debtors with unpaid bills are solvent!

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90 % of the French B to B debtors with unpaid bills are solvent but the success rate of the debt collection agencies and organizations in charge of the receivable collection are largely lower.
What are the reasons?
First of all it’s the way the debt collection industry is organized. The no cure, no pay policy largely practiced brings a focusing from the collector on the larger files. To collect 100 € or to collect 1.000 € it’s the same job, the same time investment but not the same earning. The market (the companies’ client of the debt collection agencies) would never accept to pay a 10 time higher fee to collect a small invoice. The bigger the file the more the debt collection specialist invest time and costs on it.
Other reasons in France are the difficulties to get legal decisions with acceptable fees for the benefit of the creditor. The French government is actually thinking about new dispositions in favour of the reduction of the payment terms. To apply the existing laws would be very helpful and sufficient. For some mysterious reasons some courts are very sensitive for the matter of the recovery costs. We don’t need new laws we need first the application of the old ones.
How to reduce the gap between the 90 % solvent debtors and the percentage of collected files is the goal of the debt collection industry in the near future. It’s difficult to accept that billions of overdue disappear every year because we are missing adapted tools and services.
Georges Vonfelt
www.gevo.fr