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Full and Final Offers and what you should be considering

Often when contacting a debtor they will make an offer of an amount less than the debt sought as “Full and Final” payment. Any such offer can only be considered and accepted by the creditor (our Client) as it needs to suit their cash-flow and timeframe for completion. Further the creditor needs to consider their contract with EC Credit Control whereupon we charge commission on every dollar recovered. Therefore the amount the creditor will end up with will be less than the full and final amount offered after we have invoiced our commission. Remember costs of collection added to any debt is as per the creditors contract with the debtor.  So if a creditor waives their rights to those costs they will still have to pay our commission on what is paid by the debtor as per our separate contract with the creditor. A creditor waiving their collection costs does not waive EC Credit Controls right to charge the creditor commission.

 Sometimes a debtor will make a full and final payment up-front stating it is in full and final payment of the debt at hand. If the client receives a cheque whereupon the debtor has stated it is given in full and final payment, they can do one of two things.

  • Bank the cheque and immediately put in writing to the debtor that same has been banked as part payment only, that full and final has been rejected and they will be pursuing the balance. This can be challenged legally though there is no legal precedent we are aware of currently that negates this option.
  • Return the cheque advising the debtor full payment is required.

 If the debtor has paid electronically stating payment is full and final, the creditor should immediately respond that same is rejected as full and final and that they will be pursuing the balance. Whether cheque or electronic the debtor can have his bank put a stop payment on same if it is not accepted as full and final.

When a creditor receives a direct payment they should immediately advise EC Credit Control of the payment so that our records are accurate for on-going action and default listing purposes along with our invoicing of commission at month end. At the same time if it is a part payment only our client should advise us if we are to proceed for the balance and what that balance currently is especially if they have agreed to any credits/discounts. If they are accepting part payment as full and final they should instruct us to close the file accordingly. If we are not instructed to hold or close the file on advice of a part payment we will assume we are to proceed for the balance and our collection process will continue to move forward.

Contact us
Phone 1300 361 070
info@eccreditcontrol.com.au

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Canberra, Melbourne, Sydney, Perth, Brisbane, Adelaide & Tasmania

EC Credit Control (Aust) Pty Ltd