Are Some DeadBeats Intentional?

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Mar 4, 2004.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Last spring, I was just starting out in this business. At the time, I was not requiring that credit cards be place on file as I am today. I was also not requiring any money down. It was very clear with all of my customers before they signed up for service that I would do the work and send them a bill after the fact.

    Anyway, I've got two customers who I suspect may have been intentionally planning to rip me off from the get go. Now that I look at how they played me with 20/20 hindsight, I'm thinking (but cannot prove) that they may have commited fraud.

    This what they did: They signed up for service. I did the work. I sent them a statement at the end of the month. They paid the first statement on time. The next month, they paid right on the due date. The next month, they were a few days late. The next month, even later.

    All the while, I'm thinking to myself "I don't want to lose a customer. They've always paid me in the past. It's probably just an oversight." I continued to service their landscapes and they eventually paid. Finally, in the fall of the year, they stopped paying. Now the growing season is over, they haven't paid and I fully expect to see another LCO on their lawn this year.

    Because I was foolish enough to bill in arrears with nothing in terms of leverage (like a credit card or an advance payment or deposit) and I was foolish enough to allow them to get 30 days behind, they have both managed to get two months worth of service for free. If you think about it, that's about a fourth of the entire season. By deadbeating a new inexperienced gullible LCO every year, they're able to shave 1/4 off their annual landscaping bill.

    I plan to take both of them to small claims. I really don't care if it costs me more than it's worth. For me, it's the principal of the matter. I've already sued one deadbeat and won a judgement. That judgement will be filed against their real estate with the county clerk. The only way they can get out of paying me now is by entering bankruptcy.

    Anyway, I was just wondering if other LCO's, especially first year LCO's, have experienced the same problems?

    Later,
    DFW Area Landscaper
     
  2. dkeisala

    dkeisala LawnSite Senior Member
    Posts: 911

    Said it once, I'll say it again - I always bill in advance of service. This way if things get out of hand, I can limit the amount of damage. I like to have the control, not my clients. I have more to lose than my clients do.
     
  3. justmjc

    justmjc LawnSite Senior Member
    Posts: 261

    Let me ask how you bill in advance? Do you send the first bill explaining that services are paid ahead of time, so If they quit, they either recieve a credit or continue for 1 month until the credit is used up?

    What do you say to get people to go along with this?
     
  4. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Dkeisala,

    I've made dramatic changes over the winter. I now require a credit card be placed on file for automatic monthly payment. Not an option. No credit card, no service.

    Later,
    DFW Area Landscaper
     
  5. Shady Brook

    Shady Brook LawnSite Bronze Member
    from Indiana
    Posts: 1,517

    I fully believe some intend to steal. I also think some prey upon new businesses. Show them you will not tolerate it, and take them to court. I would, if you have not done so, send them a statement with late charges, and indicate that if you do not receive payment by....a week from the day you send it, you will go the the court house to file a judgement. Send it certified mail, it seems more important and you make sure they get it. This may avoid the court hastle.

    I believe Jim Lewis has written some great stuff on this issue, as he is generally a storehouse of wisdom concerning Lawncare. He also has good ideas of how to protect your business from further hastles of this nature.

    Good luck
    Jay
     
  6. mbricker

    mbricker LawnSite Senior Member
    Posts: 505

    Shady Brook is on the money--nail them in small claims. be sure to take every scrap of documentation with you to court, if it gets that far. So far I've never had it get there. Once I tell them small claims is this train's next stop, I usually get payment. Only once I didn't, but she paid after I filed.

    If they don't pay before the court date and you get a judgment, it WILL show up on their credit report. You may wish to check that out with your local small claims, and if that's for sure the case in your area, be sure to point that fact out to your customer in the warning letter.

    I hate to be a whiner, but in this area, we are still in the dark ages even regarding contracts, and I'm positive I wouldn't get over 1 or 2 of my customers to give me a credit card. So far I'm not getting beat out of much money being paid after service is rendered

    But also I've picked up on some warning signs. Renters, that's one. And definitely a group of college students renting a house.

    Good luck
     
  7. energy

    energy LawnSite Member
    Posts: 159

    DFW, i would think that if i am a customer and you ask me for credit information, i would not choose you as my provider. How much business you got doing this and how much you have lost?
     
  8. LHlandscaping

    LHlandscaping LawnSite Member
    from PA/ SW
    Posts: 100

    I am having similar problems with a few of my snow plowing accounts. I charge 6% weekly interest after 30 days and turn the account over to a collection agency after 60 days. I also explain that the customer assumes all collection agency fees, court costs, and attorneys fees in my legal discalimer. Only charged interest so far. However, you never know things may change. You cannot let people have an inch because they will take a mile. The sad thing is in PA even if a magistrate determines that you win the case there is still no way to make the deadbeat pay up. They can only add it to their credit report.
     
  9. wallzwallz

    wallzwallz LawnSite Senior Member
    Posts: 361

    6% weekly interest? Is that legal in PA?
     
  10. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I just say, that I require the first month in advance. Harldy anyone questions it, and if they do I probably didnt lose any money because they werent going to pay anyway.
     

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