Conduct an online search for “Dispute a Debt.” What you’ll find is astonishing. Tens of thousands of websites teaching debtors how to falsely dispute a debt so they can legally get out of paying their accounts.
Now the reason this dirty tactic works so well is because almost without exception debt collection agencies won’t touch a disputed debt… irrespective of whether that debt is genuine or clearly fabricated.
With no other choice, forced to recover a falsely disputed debt on your own you’ll inevitably end up physically, emotionally and financially crushed.
Thankfully, there are seven simple yet devastating tools to protect you from bogus disputes. When used in concert these little-known weapons of destruction will cut bogus disputes off at the knees before their lies gain any traction.
Your 4 Achilles’ Heels
To gain a better appreciation of these tool’s incredible power it’s helpful to first touch on your greatest vulnerabilities when it comes to having an account disputed. In essence, whether genuine or made-up, disputes tend to target 4 Achilles’ Heels in your business:
- The amount charged is more than agreed upon;
- The quality of workmanship, goods or services is unsatisfactory;
- Damages were incurred in delivery of product or service;
- What was delivered was not what was asked for or agreed upon.
With these 4 ‘soft targets’ in mind, here then are the 7 Pillars of Prevention that’ll fortify you against the ravishes of bogus disputes.7 Pillars Of Prevention
Pillar of Prevention #1: Terms of Trade
Terms of Trade constitute a set of legally binding conditions which comprehensively define how you and your customers shall conduct business together. By specifying the rights and obligations of both parties your Terms of Trade both protect you from abuse as well as empower you with substantial legal might.
Whilst there is no such thing as standard Terms of Trade and that such terms must be tailored to your particular business, there are 12 essential matters intimately related to preventing disputes that your terms must address, irrespective of the size or nature of your business:
- Pricing, Quotes and Estimates
- Payment Terms
- Delivery Arrangements
- Guarantees, Warranties and Liabilities
- Ownership Of Goods
- Recovery Of Goods
- Merger With Other Goods
- Privacy Act Authorisation
- Personal Property Securities Act
- Events Of Default
- Events Of Disputes
Your Terms of Trade are the plutonium of your warheads. Without comprehensive Terms of Trade tailored to your particular business all of the following anti-disputes missiles won’t even dent a bogus disputes.Pillar of Prevention #2: Credit Check
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 powerful tool for weeding out potential disputers is an on-the-spot credit check. In a nutshell, 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 behaviour you can then ‘handle’ them appropriately. This might mean you avoid doing business with them altogether or alternatively it may mean making arrangement for them to pay you prior to you doing business with them.
Either way, by conducting a credit check before doing business with a new customer you’ll dramatically reduce your chances of being taken advantage of. And because it’s so cheap and easy to do online there really is no good reason why you shouldn’t be performing credit checks routinely.
Pillar of Prevention #3: Authority To Supply Goods
Designed to head-off potential for a customer to claim they never actually agreed to purchase your goods as an excuse for not paying, this form clearly documents who has requested what by when and for how much. It also includes all your Terms of Trade on the back.
Pillar of Prevention #4: Work Authorization
Similar to an Authority To Supply Goods, this form averts any confusion or misunderstanding related to services provided. Once again it details what work is to be carried out; it specifies who’s responsible for the account; and it states the terms for payment. Importantly, it also specifies whether the agreed fee is a quote or simply an estimate.
Pillar of Prevention #5: Quotation Variation
An extremely common source of disagreement arises when a client requests an amendment to the work specified on a quote.
For instance, imagine you’ve quoted a client say $1,000 for a manual roller door on their garage but they subsequently ask for an electric roller door. Even if you both verbally agree on a commensurately higher price, if you don’t formally document and sign this amendment then you leave yourself wide open to carrying out the more expensive work and only being paid what you originally quoted.
As such, whenever you deviate from what has been originally quoted you must get your customer to sign this Quotation Variation form.
Pillar of Prevention #6: Job Completion Confirmation
This is an extremely potent piece of paper. By spelling-out exactly what has been delivered and getting the customer to sign this declaration, this form virtually eliminates the opportunity for your customer falsely disputing that you have not fulfilled your part of the agreement.
What’s more, as stated 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 notify you of a dispute after this 7 day window has closed then you possess the full power of the law to recover the debt. In effect you’ve slammed the door shut on disputes of quality and damages.
Pillar of Prevention #7: Personal Property Securities Register
For a measly three dollars, you can place a registered security on a customers’ goods, house, car or assets. What this empowers you to do is potentially repossess the registered assets should your debtor default on payment.
This is particularly useful in those situations where a debtor disputes the quality of your goods or work more than 7 days after signing your Job Completion Confirmation form.
Once again, it’s critical to understand that there is no such thing as standard set of tools. This arsenal must be tailored to incorporate every Pillar of Prevention that’s applicable to your particular business. Should you leave any relevant defense out you’ll needlessly leave yourself exposed and vulnerable.
And finally, as the preparation and execution of these tools requires considerable legal expertise you should only ever engage the services of a Terms of Trade specialist.