7 Potent Tools To Prevent Bogus Disputed Debts Ravaging Your Business
Whether you know it or not you're a soft target for career criminals. With the economy tightening more and more desperate[people are falsely disputing their debts in an effort to get out of paying those accounts.
Whether you know it or not you're a soft target for career criminals. With the economy tightening more and more desperate[people are falsely disputing their debts in an effort to get out of paying those accounts.
You see, what these debtors know that you may not is that with extremely rare exception debt collectors won't touch a disputed debt. And it really makes no difference whether that dispute is real or clearly made-up... collection agencies don't care!
With no one to help you, trying to settle a bogus debt on your own will inevitably cripple you physically, emotionally and financially!
Luckily, there are 7 simple yet powerful barriers to immunize you against disputed debts. When used in combination these secret weapons of destruction will mow down bogus disputes with the ruthless efficiency of a machine gun at a knife fight.
Your 4 Soft Spots
To gain a deeper respect for these tool's immense power it helps to first shed light on your greatest susceptibilities with regards to falsely disputed debts. In essence, whether genuine or made-up, disputes tend to exploit one or more of the following holes in your business:
1. The amount charged is more than was discussed;
2. The customer is dissatisfied with the quality of goods or services received;
3. Property was damaged during delivery of product or service;
4. The customer did not receive what was asked for.
With these 4 'soft targets' in mind, here then are the 7 Pillars of Prevention that'll shield you from the ravishes of bogus disputes.
7 Pillars Of Prevention
Pillar of Prevention #1: Terms and Conditions
Terms of Trade is a binding legal document which comprehensively governs how you and your customers shall conduct business together. By defining the rights and obligations of both parties your Terms of Trade both dramatically reduce the potential for abuse as well as arm you with the full power of the law.
While there is no such thing as standard Terms and Conditions of Trade and that such terms must be tailored to your particular business, there are 12 essential acts of legislature intimately related to preventing disputes that your Terms absolutely must address.
Irrespective of the size or nature of your business your Terms and Conditions of Trade must include each and every one of the following acts of legislation that is relevant to your business...
* Definitions
* Pricing, Quotes and Estimates
* Terms of Payment
* Terms of Delivery of Goods and/or Services
* Guarantees, Warranties and Liabilities
* Ownership Of Goods
* Rights to Recover Goods
* Merger With Other Goods
* Privacy Act Authorization
* Personal Property Securities Act
* What Happens If Customer Defaults on Payment
* What Happens If Customer Disputes an Account
These 12 acts of legislature are not items on a menu you pick and choose from. All 12 are mandatory and if you leave any one out you'll needlessly set yourself up to be abused.
Pillar of Prevention #2: Credit Report
You've probably heard the saying: "A leopard doesn't change it's spots!" It's no different with people. If some one has repeatedly defaulted on payments in the past, it's likely they'll do it again... and quiet probably by falsely disputing the debt.
A potent way to weed-out potential disputers is to conduct a credit check. Essentially, a credit check is simply a request for detailed information relating to an individual's (or a company's) level of debt as well as their ability to service those debts.
Alert to such patterns of behaviors you have the choice to either demand up-front payment before commencing work or alternatively refuse to do business with them in the first place.
Either way, by conducting an up-front credit check on prospective customers you'll dramatically reduce your exposure to dispute abuse. And because it's so cheap and easy to do online there really is no good reason why you shouldn't be performing routine credit checks right now!
Pillar of Prevention #3: Authority To Supply Goods
Designed to reduce potential for a customer claiming they never actually agreed to purchase your goods as an excuse for not paying, this Goods Authorization Form clearly documents who has requested to receive what, by when and for how much.
Pillar of Prevention #4: Work Authorization and Quotation
Just like an Authority To Supply Goods, this form is designed to prevent any confusion or misunderstanding related to services provided. To be effective it must detail what work is to be carried out; who's responsible for the account; and what are the terms for payment. Importantly, it also specifies whether the agreed fee is a quote or simply an estimate.
Pillar of Prevention #5: Quote Variation
Following on from a quote, should a client request a change to the work quote you open the door to a potential nightmare.
To illustrate, imagine you've quoted a client say $2,000 to build a wooden fence. Then before you actually build the fence the client asks for a more elaborate stone fence instead.
Regardless of whether or not you both shake hands on higher price, if you don't formally document and sign this amendment then you leave yourself wide open to performing the more expensive work and only being paid what you originally quoted.
Consequently, whenever you agree to change what has been originally quoted you must document the changes on a Quotation Variation Form and get your customer to sign it.
Pillar of Prevention #6: Job Completion Confirmation
This is an extremely powerful document. By stipulating precisely what has been delivered and getting the customer to sign this declaration, this form practically eliminates the potential for your customer falsely disputing a debt on the grounds that you have not fulfilled your part of the agreement.
In addition, as covered in your Terms of Trade, your customer has a maximum of 7 days following the signing of this document to formally notify you of any grievances they have with the quality of your work.
Should they fail to notify you of a dispute within this 7 day window then you automatically possess the full power of the law to recover the debt. In effect you've slammed the door shut on disputes relating to quality and damages.
Pillar of Prevention #7: Personal Property Securities Register
Should a debtor dispute the quality of goods or services more than 7 days after signing a Job Completion Form,you can register a security over their goods, car, house or assets for a measly $3. What this empowers you to do is potentially repossess the registered assets should your debtor insist on disputing the debt.
As mentioned earlier, it's critical you understand that there is no such thing as standard set of tools. For total protection it's paramount you utilise each and every Pillar of Prevention that's applicable to your business. Should you overlook any relevant defense you'll needlessly set yourself up for abuse.
And finally, as Terms of Trade is a highly specialised and constantly changing field you should only ever engage the services of a Terms of Trade specialist.
Whether you know it or not you're a soft target for career criminals. With the economy tightening more and more desperate[people are falsely disputing their debts in an effort to get out of paying those accounts.
You see, what these debtors know that you may not is that with extremely rare exception debt collectors won't touch a disputed debt. And it really makes no difference whether that dispute is real or clearly made-up... collection agencies don't care!
With no one to help you, trying to settle a bogus debt on your own will inevitably cripple you physically, emotionally and financially!
Luckily, there are 7 simple yet powerful barriers to immunize you against disputed debts. When used in combination these secret weapons of destruction will mow down bogus disputes with the ruthless efficiency of a machine gun at a knife fight.
Your 4 Soft Spots
To gain a deeper respect for these tool's immense power it helps to first shed light on your greatest susceptibilities with regards to falsely disputed debts. In essence, whether genuine or made-up, disputes tend to exploit one or more of the following holes in your business:
1. The amount charged is more than was discussed;
2. The customer is dissatisfied with the quality of goods or services received;
3. Property was damaged during delivery of product or service;
4. The customer did not receive what was asked for.
With these 4 'soft targets' in mind, here then are the 7 Pillars of Prevention that'll shield you from the ravishes of bogus disputes.
7 Pillars Of Prevention
Pillar of Prevention #1: Terms and Conditions
Terms of Trade is a binding legal document which comprehensively governs how you and your customers shall conduct business together. By defining the rights and obligations of both parties your Terms of Trade both dramatically reduce the potential for abuse as well as arm you with the full power of the law.
While there is no such thing as standard Terms and Conditions of Trade and that such terms must be tailored to your particular business, there are 12 essential acts of legislature intimately related to preventing disputes that your Terms absolutely must address.
Irrespective of the size or nature of your business your Terms and Conditions of Trade must include each and every one of the following acts of legislation that is relevant to your business...
* Definitions
* Pricing, Quotes and Estimates
* Terms of Payment
* Terms of Delivery of Goods and/or Services
* Guarantees, Warranties and Liabilities
* Ownership Of Goods
* Rights to Recover Goods
* Merger With Other Goods
* Privacy Act Authorization
* Personal Property Securities Act
* What Happens If Customer Defaults on Payment
* What Happens If Customer Disputes an Account
These 12 acts of legislature are not items on a menu you pick and choose from. All 12 are mandatory and if you leave any one out you'll needlessly set yourself up to be abused.
Pillar of Prevention #2: Credit Report
You've probably heard the saying: "A leopard doesn't change it's spots!" It's no different with people. If some one has repeatedly defaulted on payments in the past, it's likely they'll do it again... and quiet probably by falsely disputing the debt.
A potent way to weed-out potential disputers is to conduct a credit check. Essentially, a credit check is simply a request for detailed information relating to an individual's (or a company's) level of debt as well as their ability to service those debts.
Alert to such patterns of behaviors you have the choice to either demand up-front payment before commencing work or alternatively refuse to do business with them in the first place.
Either way, by conducting an up-front credit check on prospective customers you'll dramatically reduce your exposure to dispute abuse. And because it's so cheap and easy to do online there really is no good reason why you shouldn't be performing routine credit checks right now!
Pillar of Prevention #3: Authority To Supply Goods
Designed to reduce potential for a customer claiming they never actually agreed to purchase your goods as an excuse for not paying, this Goods Authorization Form clearly documents who has requested to receive what, by when and for how much.
Pillar of Prevention #4: Work Authorization and Quotation
Just like an Authority To Supply Goods, this form is designed to prevent any confusion or misunderstanding related to services provided. To be effective it must detail what work is to be carried out; who's responsible for the account; and what are the terms for payment. Importantly, it also specifies whether the agreed fee is a quote or simply an estimate.
Pillar of Prevention #5: Quote Variation
Following on from a quote, should a client request a change to the work quote you open the door to a potential nightmare.
To illustrate, imagine you've quoted a client say $2,000 to build a wooden fence. Then before you actually build the fence the client asks for a more elaborate stone fence instead.
Regardless of whether or not you both shake hands on higher price, if you don't formally document and sign this amendment then you leave yourself wide open to performing the more expensive work and only being paid what you originally quoted.
Consequently, whenever you agree to change what has been originally quoted you must document the changes on a Quotation Variation Form and get your customer to sign it.
Pillar of Prevention #6: Job Completion Confirmation
This is an extremely powerful document. By stipulating precisely what has been delivered and getting the customer to sign this declaration, this form practically eliminates the potential for your customer falsely disputing a debt on the grounds that you have not fulfilled your part of the agreement.
In addition, as covered in your Terms of Trade, your customer has a maximum of 7 days following the signing of this document to formally notify you of any grievances they have with the quality of your work.
Should they fail to notify you of a dispute within this 7 day window then you automatically possess the full power of the law to recover the debt. In effect you've slammed the door shut on disputes relating to quality and damages.
Pillar of Prevention #7: Personal Property Securities Register
Should a debtor dispute the quality of goods or services more than 7 days after signing a Job Completion Form,you can register a security over their goods, car, house or assets for a measly $3. What this empowers you to do is potentially repossess the registered assets should your debtor insist on disputing the debt.
As mentioned earlier, it's critical you understand that there is no such thing as standard set of tools. For total protection it's paramount you utilise each and every Pillar of Prevention that's applicable to your business. Should you overlook any relevant defense you'll needlessly set yourself up for abuse.
And finally, as Terms of Trade is a highly specialised and constantly changing field you should only ever engage the services of a Terms of Trade specialist.
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To help you prevent and resolve disputed debts The Debt Doctor's Debt Collection blog has a number of powerful free tools and resources. For instance, to download free debt reminder and final demand letterssimply click either link above.