Glossary

Debt collection costs: “No cure, no charge”

“No cure, no charge”: Pay according to what you actually cash out of overdue receivables

The no cure no charge system entails that we follow your fortune, that we have common interests.  The debt collector is bound to book results and the creditor maximizes his chances to get paid.  Indeed, the creditor does not need to pay for debt collection actions but only for debt actually collected. TCM works under the no cure no fee system. This entails that you don’t need to bother about a subscription and even that we impose some minimum amount or exclusivity.

Avoid useless costs

Legal costs are stacked up on a per action basis by attorneys and bailiffs. The final combined total outgo can be significant.  Moreover, it needs to be paid by the creditor even when, as it happens, the debtor won’t pay.  Thanks to the no cure no pay principle, there is a commitment to success instead of a commitment to efforts (ie expenditure).  TCM guarantees that you have no added costs in case you don’t get your debtor’s payment.  This also allows creditors to act towards receivables even though they have little means to invest in such actions.

Don’t be fooled by legal action on a no cure no charge basis

This is on offer on the Belgian market. However, it is illegal, as legal costs and bailiff charges are of a Public Order nature. In a judgement of 24 June 2011 (district court of Leuven – 11/688/A), we learn that bailiffs worked on hospital claims on a no cure no charge basis.  The judge stated that this behaviour was illegal (against Public Order).  Years later, the client eventually had to pay the full costs, notwithstanding the contract that stipulated gratuity.

Be careful: participation in an illegal scheme can be cost saving to start with but is usually extremely expensive on the long term.

Reduced operating costs

For some creditors, companies or private individuals, the significant costs entailed by legal actions deters them from seeking justice. Thanks to the no cure no charge principle, these weaker actors can get what they’re entitled to. This is an important element of democracy and, as we speak about business, an essential feature for the economy.   Interestingly, it is not only the weaker actors who use debt collectors and the no cure no fee system.  Such system is used by most multinationals and large enterprises because it reduces their costs and offers them more margin for reinvestment and growth.  TCM is proud and happy to serve large creditors as well as the smallish ones.

Decide objectively

As no cure no fee doesn’t pay for useless actions, it entails that actions are taken only if they are expected to reasonably deliver reasonable results.  No useless letters, phone calls, court actions because these are costs that “a good housekeeper” would avoid unless deemed useful.

This is good news for the creditor but also good news for the debtor.  Neither of them has to focus on useless communication.  Both of them can rely on sound business practice.  Not all unpaid bills are just bad will. In fact less than 5% of what TCM is entrusted are for unpleasant debtors.  Other claims can be due to many reasons, including wrong delivery for instance or poor solvency.  In any event and for 100% of the claims, a reasonable and competent approach is what delivers the best results.

Conclusion

The no cure no charge system makes sure that expensive though sometimes useless procedures are avoided.  It focuses everyone on cost benefit assessment and sound business practice.  TCM staff sees to it that all claims get the best possible solution through timely and adequate movements.  We offer our clients a bespoke service and we operate discretely and transparently.

 

Updated 10/10/2016

 

 

Les définitions fournies dans cette section réfèrent à la situation belge ; sauf si autrement spécifié. Les textes résument des concepts en langage commun. Ces résumés ne se veulent ni complets ni définitifs. Merci d’envoyer vos suggestions de modifications ou ajouts à glossary@tcm.be.