{"id":185324,"date":"2023-12-14T22:43:20","date_gmt":"2023-12-14T22:43:20","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=185324"},"modified":"2024-05-29T07:20:04","modified_gmt":"2024-05-29T06:20:04","slug":"send-debt-collection-letter","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/ecommerce-online-business\/send-debt-collection-letter\/","title":{"rendered":"How Can an eCommerce Business Send a Debt Collection Letter?\u00a0"},"content":{"rendered":"\n

As an e-commerce business, you will sell your goods or services to your customers. In return, it is reasonable for you to expect customers to pay for your goods and services promptly. This helps with cash flow<\/a>, meaning you have funds to pay for your supplies, such as stock to sell and to pay your bills, such as your web hosting costs. However, as an internet business, you can face late payments and end up with unpaid debt<\/a>, so you may need to send out debt collection letters. This article will discuss how an eCommerce business can send a debt collection letter.<\/p>\n\n\n

\n \"Front\n
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Guide to Resolving UK Business Disputes<\/div>\n
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This guide outlines how to resolve commercial disputes.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

What is a Debt Collection Letter? <\/h2>\n\n\n\n

When a business owes your eCommerce brand money, you may need to send them a debt collection letter. This is a formal letter requesting them to pay the money they owe you – you can title this \u2018letter of action\u2019<\/a>.\u00a0<\/p>\n\n\n\n

A letter of action is necessary when a customer has not paid its invoice or outstanding money it owes you within the time frame. Your terms and conditions should say when you expect payment. Alternatively, you may have a contract between you and your business customers.<\/p>\n\n\n\n

Your internet brand will usually send a first debt collection letter<\/a>. However, if this is unsuccessful, you may pass your creditor to a debt collection agency to collect the money you are owed. <\/p>\n\n\n\n

How to Send a Debt Collection Letter<\/h2>\n\n\n\n

If you need to send a debt collection letter to a customer for goods or services that your internet brand sells, you should follow a sound credit control procedure for your internet business. This should say that you will send the letter after the agreed payment date for paying for your eCommerce goods or services expires. If you did not agree to a payment date with your customer, the law says a business should pay a commercial payment within 30 days. <\/p>\n\n\n\n

This first demand for payment is a letter that will ask your business customers to pay the money they owe within seven days. It is courteous to telephone the customer to see if you can resolve any invoice issues. <\/p>\n\n\n\n

Sometimes you may hear people refer to debt collection letters as a letter before action<\/a>. Your letter may say that if your internet business does not receive payment by a specific date, your eCommerce brand will take legal action against the business. This is because when you send such a letter, you are carrying out the pre-litigation stage of collecting your eCommerce debt. Mentioning potential legal action can sometimes help encourage your business customers to pay. <\/p>\n\n\n\n

Can My eCommerce Business Charge Interest? <\/h3>\n\n\n\n

When you send a debt collection letter to a creditor, you may have a legal right to add the following:<\/p>\n\n\n\n

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  • interest;<\/li>\n\n\n\n
  • debt recovery costs; and <\/li>\n\n\n\n
  • compensation where the debt is of a substantial amount.<\/li>\n<\/ul>\n\n\n\n

    The amount you may be able to add is:<\/p>\n\n\n\n

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    • 8% over the Bank of England base rate for interest on late payments; <\/li>\n\n\n\n
    • \u00a340 compensation per invoice for any debt up to \u00a3999.99;<\/li>\n\n\n\n
    • \u00a370 compensation per invoice for any debt from \u00a31000 up to \u00a3999.99; and<\/li>\n\n\n\n
    • \u00a3100 compensation per invoice for any debt over \u00a310,000.<\/li>\n<\/ul>\n\n\n\n
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