Debt Collection in Financial Services

What causes unpaid invoices in financial services?

In the financial services sector, unpaid invoices often stem from more than simple unwillingness to pay. Payment issues may arise due to:

• Debtors exploiting ambiguous contract clauses
• The sector's reliance on reputation
• Inadequate due diligence processes 
• Debtors (mis)using client dependency
• Legal obstacles due to cross-border complexities

The complex nature of these situations makes recovering debts in this industry a challenging task for regular debt collection agencies.

As such, you will want to entrust the collection of your unpaid invoices to experts with in-depth legal knowledge and a deep understanding of how companies within the sector operate.

Preventing debt collection in financial services

Because the situations leading up to debt collection in the financial services sector are often complex, companies may wonder if there is anything they can do to protect themselves against non-payment. To answer this question, our experts have compiled 7 essential tips:

• Ensure your contracts are clear and unambiguous
  Contracts in financial services are typically more complex than those in other sectors. As they often contain performance contingencies or conditional fees, malignant debtors may try to exploit vaguely-worded clauses to delay or even dispute payment. This problem can be remedied by having a specialised lawyer draft or modify your contracts to ensure the wording is clear and unambiguous. Naturally, our lawyers will gladly take care of that for you.
• Set up thorough due diligence procedures
  By carefully scrutinising your clients' data and documents, you can detect potentially falsified or inflated information. Some parties may resort to these practices to obtain financing, even if they know they will likely not be able to follow through with their repayments.
• Maintain solid invoicing and payment processes
  By invoicing your client immediately after service delivery, you can prevent unnecessary payment delays. Many companies have chosen to automate this process. Some have also implemented automated (gentle) reminders leading up to the due date. If an invoice still has not been paid after the due date, it becomes even more important to maintain a firm follow-up structure. This follow-up process typically includes clear payment reminders and contact via telephone, followed by a demand letter that clearly sets out what will happen if your client does not pay within a set amount of time.
• Limit your client dependency
  Excessive levels of client dependency pose significant financial and negotiation risks, because clients that represent a large portion of your revenue may attempt to leverage their status to gain certain advantages. In the event of a dispute, for example, a large client may choose to withold payment, as they know that doing so could cause a significant cash flow disruption on your end. You can limit your risk by strictly monitoring dependency metrics, diversifying your client portfolio, and including advance payments or security interests in your contracts.
• Add clauses about interest and debt collection fees
  By including these clauses, you can stipulate that interest will accrue on overdue invoices and that any debt collection costs incurred in recovering payment can be charged to the customer. This approach not only helps you recover additional costs but also acts as a deterrent to late or non-payment.
• Provide a clear timeframe within which any disputes must be raised
  Specify a reasonable period within which clients must raise any disputes regarding your services or invoices. Establishing such a timeframe makes it more difficult for clients who were initially satisfied with your work to later raise unfounded complaints.
• Strengthen your cross-border follow-up
  If you conduct business internationally, having the means to deal with non-paying clients abroad is absolutely vital. Debtors are much more likely to pay if they know that you can take legal action against them regardless of where they might be located. As Europe's leading international debt recovery law firm, we have a large arsenal of European, international and national legal measures that we will gladly employ to recover your debt.

What to do if a client still does not pay?

Even if you have done everything correctly, there is always a chance that some customers may not pay. When that happens, working with a trusted debt collection partner can help you recover what you are owed efficiently and professionally.

Why financial services firms choose Bierens

Our firm has a long history of debt recovery in the financial services sector, our international team of 115+ in-house lawyers and debt collection specialists is able to pursue claims strategically, ensuring our clients’ financial interests are protected efficiently and effectively.

Other reasons why financial services firms entrust their debt collection cases to Bierens include:

• An out-of-court success rate of 95%
• No Win No Fee debt collection
• In-house expertise with national and international lawyers
• A detailed Web Portal for 24/7 tracking of your case
• Both extrajudicial and judicial debt collection

Our working method – No Win No Fee

During the extrajudicial phase, we work based on No Win No Fee. We believe it is important to try to solve the case during this phase, without court intervention. You will only have to pay €185 for administrative costs.

Should legal action be necessary, then we can help you perform a credit check and analyse your debtor’s financial status. We will discuss the costs with you and will only start working on your case after receiving your permission.

Debt collection lawyers in financial services

We understand the payment behaviour of companies in the financial services sector. We know how such agreements should work in theory and in practice. Therefore, we believe that it is important to provide practical advice that is as close to normal business operations as possible. For instance, we look at your operations and see how we can build in checks and balances. In addition, we also ensure that these checks and balances are implemented and executed in the right way.

Our specialists are ready to recover

For decades, Bierens has helped many companies across different industry sectors. Our team of debt collection lawyers also specialise in international debt collection. Whether you have a debt collection case in your own country or abroad, our lawyers have the expertise and knowledge to help you.

So do you operate in the financial services sector and has your client left your invoice unpaid? Then send us your invoice right away. Our specialists will immediately start working on your case.