Letter Before Action Should Not Be Abused

CLI, reputable debt collection agency explains why Letter Before Action should not be abused

Letter Before Action Limitations

A letter before action (LBA) is used in B2B (Business to Business) debts. It cannot be used for B2C (Business to Consumer) Debts as this has now been replaced by the Pre-Action Protocol for debt claims, which we cover separately in other articles. An LBA should be used as a last resort only. Typically, an LBA normally forms part of an in-house credit control process. Do not use an LBA prematurely. Make sure you have exhausted all other possibilities before issuing an LBA. An LBA is usually a threat to take the matter legal if the debt is not paid in full within 7-days. If you make this threat and do not go ahead with it you will lose credibility with your debtor.

There are firms of solicitors that will issue LBAs for client who have no intention of starting legal action. Sadly, over the years, it has resulted in late paying companies becoming immune to it and what use to be a good tool to collect a debt amicably prior to starting legal action has become very unsuccessful. Sadly, there are no magic wands and a letter only will rarely generate the results that an integrated debt collection strategy can achieve.

Using a reputable Debt Recovery Agency as a Debt Collection strategy

In our view, the right place for an LBA in a credible debt collection strategy is 7 days before the issue of Court Proceedings. Sending an LBA and then reverting to trying to collect the debt through negotiation is totally counter-productive and always results in the creditor losing all credibility with their late paying corporate customers, making it less likely to get paid amicably after the LBA has been sent.

It is far better to refer the matter to a reputable Debt Recovery Agency such as Credit Limits International (CLI) who will take the matter on at no cost risk to you. We offer debt collection services in the UK and all over the world on very competitive No Collection – No Fee commission rates.

Whilst we strive to collect your monies on an amicable pre-legal basis, in some cases legal action may be necessary. This will only be recommended to you after the case has been fully assessed by our in-house legal team and if we believe that incurring Court fees and Legal costs is a potentially good investment for your company. We will only quote for legal action if we believe Court Proceedings will generate cash recoveries.

Why use CLI for your Debt Collection and International Debt Collection

CLI design specific workflows and collect monies from your debtors through a savvy mix of phone calls, emails, letters and searches.

We have a passionate team of well-trained collectors with collections experience across all business sectors some of whom have run their own businesses. They have excellent negotiation skills and can quite often broker a sensible full and final settlement deal with the debtor (with your agreement of course).

Through our online shop, you can buy LBA templates in practically every language. Our Letters Before Action do not threaten legal action if the debtor does not pay you, so if the LBA from CLI does not work you will still be able to refer the matter to us on a No Collection – No Fee basis, without losing any credibility with your customers.