Part three: the repeating invoice
In this series about the way some companies seek to trick firms that sell to schools out of their money, I’ve dealt with sales pitches concerning government legislation that doesn’t exist, and the selling of entries and adverts in directories that teachers don’t use.
This third article moves into another field: the way invoices are presented and money collected.
What happens is that the firm buying the advertising is charged for the first job, and then unless you cancel by a certain date, you are charged again and the advert is run again.
Worse, sometimes these charges can be very high. For example, a £3000 advertising campaign might be an experiment you want to try. Then you find it doesn’t work, and you write it off as a bad move.
But horror of horrors, some months later you get a bill for another £3000 on the grounds that your advert is being repeated, as you have not cancelled in time.
This approach has apparently been used by directory publishers and those who run new forms of directory advertising such as advertising in directories on web sites and on memory sticks.
It is important to remember that just as I made clear in the last article, not everyone who publishes a directory is trying to rip you off, and this applies to web site directories and memory sticks, as much as anything else.
But I would say (and like everything else in these articles, this is just a personal view) I don’t like repeating invoices for large amounts. They are bad enough when they are for £40 a month with the need to cancel one week before the repeating date (a system operated by many internet retailers), but when they are for £3000 a year and that hits you in one go without further warning, I think that is going too far.
Are they legal? Well, I think they could be challenged – although you will appreciate that I am certainly not a lawyer.
Transactions between businesses are covered by the Unfair Contract Terms Act 1977 (UCTA) and what follows is taken from the government’s web site on the matter http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1074405689&type=RESOURCES
In general, businesses are assumed to be free to enter into whatever contracts they agree between themselves, but UCTA places a number of restrictions on the contract terms businesses can agree to and it introduces reasonableness as a condition of the validity of a contract.
UCTA doesn’t define precisely what is meant by reasonable, but the County Court will usually take into account the information available to both parties when the contract was drawn up and whether the contract was negotiated or in standard form.
My non-lawyers view is that if you have been caught by a repeating contract you might want to consider two points.
First, in my experience companies that are bent tend to be very aggressive in trying to collect unpaid bills but rarely take you to court, for fear of losing the case which would give you the chance to put the whole thing on the internet.
Second, if they were to take you to court and you lost then yes you would have to pay the bill, but you would only also have to pay the normal county court costs (not lawyers’ fees).
I must repeat however that a) I am not a lawyer and b) repeating invoices are not necessarily evil. My own company undertakes marketing work for a number of firms on a month by month basis. Our contract says that our clients have to give us one month’s notice to stop work, and we would argue that is reasonable since it is well publicised, and we need to wind down the company’s work if they do want to stop.
This is the third article in this series – the first article appeared at http://www.blog.educationmarketing.org.uk/2010/07/26/selling-into-schools-all-the-con-tricks/
Tony Attwood