Penalize Your Debtors
From the moment we are instructed by you on your debt we calculate your full entitlement to interest under the late payment of Commercial Debts Act (base rate + 8%) together with late payment compensation. This interest is calculated from payment due date till full payment. Late payment compensation came into force on the 7th August 2002 and applies to all commercial contracts and regulates compensation as follows: -
Unpaid Debt - Compensation Allowed
Up to £999.99 - £40
£1,000 to £9,999.99 - £70
£10,000 or more - £100
So, as an example a £810 debt that is 95 days past due date for payment entitles the creditor to interest of £26.35 (calculated at 12.5% interest) and £40 late payment compensation. A total of £876.35 due. Therefore the interest recovered settles 1/3 of your fees and you are further entitled to 27p per day until full payment.