Collection Attorney: Must You Notify Your Customer You are Sending Them to a Collection Attorney?
Advising your customers that they are in default is separate and apart from notifying customers that they are being sent to collections.
There are some contracts that require a party to give the other party written notice of “default,” of non-payment. Failing to provide the requisite notice is considered a failure to meet a “condition precedent;” a requirement that notice must be given before you can move to the next step to enforce your rights as creditor.
Whether you have a contract that requires notice of default or not, must you send your customer notice that you are sending the account to a collection attorney?
The answer is no. Additional notice is not required.
Some creditors send a warning or final notice advising that the account will be turned over within a prescribed period of time if payment is not made. They do so as a final attempt to obtain voluntary payment rather than to comply with a statutory requirement.
Because delay can hamper collection the creditors allow a short window of time for the customer to pay. The time frame is set forth in the notice. Assuming payment is not made, once notice is given with the terms: failure to pay within the prescribed period of time means the account will be placed with a collection attorney.
Some creditors do not give the customers the added warning, holding fast to the position that payment is expected within the terms specified. Non-payment from the customer creates a HOLD on further shipments or services until payment is made while the creditor moves forward with collections on the past due balance.
Creditors know that if they give a final notice that the account will be sent to collections, it must be sent out. Failing to follow through and keeping it in house sends a clear message of idle threats. The non-paying customer will know that there is not an immediate intention of placing them for collection. This will inevitably delay payment. Payment will be made at the customer’s whim rather than on the creditor’s terms.
When your customer fails to pay, let us help you get paid. Please contact this debt collection attorney at (212) 686-0100 or email Jocelyn directly at JNager@ffgnesqs.com.