Collecting from Bad Customers

Discussion in 'Lawn Mowing' started by Jason Pallas, Feb 3, 2001.

  1. Jason Pallas

    Jason Pallas LawnSite Bronze Member
    Messages: 1,335

    We've been in business for about 20 years and tried a lot of methods for collecting bad debt. Sometimes (most) the time and money spent chasing a debt isn't worth it. I could wallpaper my office 20 times over with court judgements that we've yet to get satisfied. We now only go to court if it's for a lot of money and I know how and where I can collect on the judgement. We now send all bad debt to a collection agency that we work with (highly reccomended). Some don't care about their credit, others do and still others will pay the debt off 3-4 years down the road when it prevents them from getting a loan or mortgage.
    Here's the question: We recently had a customer split (move out from a rental unit). Usually we don't take renters (as you can always file a lien on a homeowner - another effective measure) but she was a customer for years and always paid up. Since the bill was over $500, I've heard rumor that you can go to the police and file a felony charge - theft of services by deception. Has anyone ever done this? Results?
    This account really sticks in my craw - so, if we can't get paid, I'd love to see a criminal charge follow this deadbeat around.
  2. capital

    capital LawnSite Member
    Messages: 118

    I think you would be better off turning it over to the collection agency with your thoughts regarding the crimminal charge. Let them handle it vice working up a sweat over somthing that they can handle more effectively and thats what you pay them for.
    We also turn all are accounts over at 90 days, per the IRS you have to treat all accounts the same for your bad debt write of purposes. We seem to recover a little over 50% once the collection agency has them.
  3. Evan528

    Evan528 LawnSite Silver Member
    Messages: 2,144

    Well I have a customer who has owned me close to 300 dollars since September. I have sent him monthly invoices along with late fees every month and he just ignores them. I even sent a certified letter wich he failed to even pick up from the post office. On Thursday I filed all the nessesary papers to take him to small claims court. The court is sending a constable to the guys house to serve with with the papers! From what ive heard the constables arent polite... they bang on the door at 5 in the morning in regular clothes and scare the sh** out of you. I know $300 isnt alot but I dont think he should get away with it! WHEN i win, he has to pay all the court costs on top of what he owes me. If he dosnt show up to court... I win by default.
  4. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    "WHEN i win, he has to pay all the court costs on top of what he owes me. If he dosnt show up to court... I win by default."

    Winning is one thing...collecting is another.

    I know a "gentleman" who has a 100% collection rate record, though he takes 50% and sometimes law enforcement may come to your door asking questions later on...if you need this kind of help let me know.
  5. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Messages: 489


    I have heard of the "theft of service" charge. I believe you need to check with state or local law enforcement.

    When we take on renters, we always have them pay in advance. No exceptions!
  6. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Messages: 10,178

    my lawyer advised me file a criminal complaint for a deadbeat customer, but he said that wording the complaint properly would make all the difference, u have to have reason to believe, because of this that or the other thing, that mrs so and so fully intended to steal your service. BOB
  7. Jason Pallas

    Jason Pallas LawnSite Bronze Member
    Messages: 1,335

    I'm headed to the cops on Wednesday. I left a voice mail on Friday regarding the fact that we knew she moved without contacting us and would be aggressively persuing this unless she contacted us before then. I'll keep you posted.
    By the way, any of you that have judgments that you can't collect on - there are a few remedies. About ten years ago I worked winters for a private investigation firm (before plowing snow in the winter). We did a lot of collection work and I learned a lot. If anybody's interested in the legal recourse/options you have after obtaining a judgement, describe the case and I'll try and give you so new perspectives.
    We normally try to shy away from renters. They're usually not worth the risk and normally not long term customers. Sometimes it's real hard to tell who rents and who owns. Asking can be a bit awkward and we've even had a few people lie to us - any good techniques to screen out renters?
  8. Bassman

    Bassman LawnSite Senior Member
    Messages: 270

    My 2 cents... Anytime you get the courts involved you are heading down the road of LAST resort. I.E. small claims court...I know from experience that even though you win the battle, you still lose the war, (getting paid). A judgement in your favor is one thing, collecting and therefore realizing money in your account is quite another. My approach will not work if you only use the U.S. postal service to send threatening notices, (which is what collection agencies do). Keep in mind that many if not a majority of the deadbeat customers we encounter are in over their heads with many vendors and probably have a long history of such. I take a non payor for services rendered as someone who is taking food off my table and tend to handle it as more of a personal insult. I call repeatedly, sometimes several times each night. If that has no positive result, I begin to show up at their home, (especially effective is on Friday evenings or the weekend). In other words I begin to become more of a distraction to their life and enough of a thorn in their side to the point that they clearly see, ( as I let them know I will continue to confront them as long as it takes till closure of this problem), to where they finally understand that paying me is a wise alternative to continued confrontation,(or you might even say harrasment), on my part.
    I have a 100% collection rate using this approach, (so far). It will not work unless you are willing to put forth a great deal of time and effort so depending on your nature, you may decide to let the debt go and watch t.v. instead of going through repeated uncomfortable confrontations. Personally, I have gone through this scenario for as little as $22. For me it is the principle involved. Like I said, just my 2 cents, for what it's worth.

    [Edited by Bassman on 02-03-2001 at 09:30 PM]
  9. UrbanEarth

    UrbanEarth LawnSite Member
    Messages: 142

    In order to screen out renters, what about asking for the legal land description (lot, block, etc). Most owners will know what that is as it will be on the deed, but renters may not. If they ask why you need it, you could say that it is for recored keeping of pesticide apps. Just a thought.

  10. Jason Pallas

    Jason Pallas LawnSite Bronze Member
    Messages: 1,335

    Just an update - we went to the police on Friday and filed a report. They said they'll be handing it over to the city attorney - will keep you posted. They seemed to want to have me handle it in civil court but did take the report. PS. The bit about believing that the customer never intended to pay the bill (the truth) did help perk the interest by the police.

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