Dodgy B2B Debt Collector Directors Jailed for Decade of Fraud

A brother and sister from Greater Manchester have been convicted of fraud after using a network of sham companies to defraud businesses out of hundreds of thousands of pounds. Mohammed Ali and Samira Saddique set up a string of fake businesses, specialising mainly in so-called debt collection, but in reality the companies were nothing more than a vehicle for advance fee fraud on an industrial scale.

Fake 'B2B Debt Collectors' Jailed for Fraud and Dishonesty Offences

Four scammers from East Lancashire have been jailed for fraud and money laundering offences after using a string of fake debt collection companies to fraudulently obtain thousands of pounds from SME’s to pay fictitious debts.

Thomas Moffett, Elliot Reed, Nancy Shaw and Gary Oliphant were imprisoned at Preston Crown Court on July the 5th 2016.

The group was part of a total of 18 people sentenced for their role in the scam, for offences including conspiring to commit fraud by false representation and money laundering.

Is it Really 'No Win No Fee' Debt Collection?

The phrase 'no win, no fee' is screamed at you from a hundred adverts a day, usually in relation to personal injury claims, PPI mis-selling and so on, but it is also used in the context of no win, no fee debt collection - meaning you only pay commission to the b2b debt collection company if they are successful in recovering what you are owed.

It's worded all sorts of different ways, so you might also see 'no collection = no commission' on some ads, but it boils down to the same thing - if you don't win back your money from the debtor, then you have nothing to pay.

Two Simple Steps to Avoid Bad Debts

Dealing with an Insolvent client can kill a profitable business. If your client becomes insolvent it will have a significant knock-on effect, that will impact on your company cashflow, leaving you as a creditor with unpaid invoices that will likely never be paid.

In 2015, more than 100,000 UK businesses found themselves as creditors to an insolvent business, and many will have found their cash flow at serious risk as a result. Any business, irrespective of size, is at risk if their client becomes insolvent but for freelancers and micro-businesses these risks are magnified.

Will Suppliers Be Banned From Cutting Off Insolvent Customers

It doesn't seem like rocket science to suggest that if a customer goes bust, you might want to stop supplying them; in fact, if you're doing your credit control properly, you'll probably want to restrict their account long before they publicly declare insolvency.

Under new government plans, due to come into force this October, you might find you are banned from taking such action, once your customer's financial woes are made public knowledge.

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