Any robust, credit-based economy requires trust for the system to work. While most people pay their bills, there is also an active group who attempt to evade those who they owe money. Since, everyone who pays their bills is essentially paying the way for those who do not, it seems “freeloader” is an appropriate description. Curious about the origin of the word I did some research but was not able to locate any attractive synonyms. Merriam- Webster’s thesaurus lists: bloodsucker, leech, free rider, hanger-on, moocher, parasite, sponge, and sponger. Just like in consumer collections, there are businesses with the ability to pay that try to evade payment.
As soon as the account is past due it is necessary to send weekly letters of advancing severity. After the third week it is necessary to notify the old customer you will be referring the account to a collection agency or law firm. Also give them a phone call to make sure they received the letters. Here is where the evasion begins. Evasion Tactic Number 1 is, “We never received the bill.” Now you must fax the bill and send it certified in addition to regular mail. Evaders may never retrieve certified mail. Now, everyone else must pay more for your services because the freeloader requires additional service and expense.
Fortunately, collection agencies and attorneys work on contingency but both require court costs advanced before a court case may proceed. Freeloaders may not respond seriously until they receive a letter from an attorney in their county, which leads to Evasion Tactic Number 2: “We are not a corporation in this state.” Your attorney may need to file suit in the claimed state of incorporation knowing the case is likely to come back. You may need to pay for court costs of about $500 to file suit and visit your bank to obtain notarization of any affidavit.
Evasion Tactic Number 3: “We never authorized this contract.” While casting the blame on an employee or subcontractor, the freeloader may offer a ridiculously low settlement because they are the victim. Evasion Tactic Number 4: vigorous intimidation tactics by the opposing attorney about your notification and collection procedures. Now this freeloader must pay an attorney to defend the vacuous evasive tactics rather than acknowledge he does not pay for services. His attorney’s job is to throw everything in your way to avoid coming to terms with the truth.
This saber rattling may be styled as Evasion Tactic Number 5: an affirmative defense. These defenses are sometimes referred to as unclean hands or laches. “Unclean hands” refers to something you did in providing services that may have exacerbated the liability of the ex-customer. You fulfilled the terms of the contract while they hoped you would not. Laches indicates some form of delay on your part. There are several forms such as, “inexcusable delay,” “failure to assert rights,” “lack of diligence,” and “neglect or omission to assert a right.” They are put forth in thin hope by the ex-customer to dissuade you from entering a protracted legal battle. If you performed as expected, according to agreement and invoiced timely, these are sad ploys by defending attorneys who are trying to justify an untenable situation.
Now you are in a full-fledged legal battle, which leads to Evasion Tactic Number 6: discovery and interrogatories. This is a package of questions and demands to again provide all the things you already provided: the invoices, statements, the contract of proof of providing service. There is no reason to give up yet just because the opposing attorney is now receiving the money the freeloader should have paid your company.
Now is where the fun begins, Evasion Tactic Number 7: depositions. You are compelled to be questioned by opposing counsel while a court reporter records every word. Prepare as if you were going to court on the day of the deposition. Since you filed in the ex-customer’s county and state, find someone or something fascinating to visit when you arrive. Opposing counsel hopes you will not arrive.
Evasion Tactic Number 8: “new business” freeloader will offer new business if you will settle for a lesser amount for the prior debt.
Evasion Tactic Number 9: expect a settlement conference before depositions begin or before the actual trial begins, even in the judge’s chambers. The rattling of sabers is over. The weight of your case makes an actual trial absurd. Oddly enough it is rare for judges to award attorneys fees.
Evasion Tactic Number 10: depositions have determined there are no fact questions in question. There may be a decision needed by a judge to apply a question of law. For example, are written contracts enforceable across state lines, hmmm, yes. Or, does the concept of agency, whereby employees or subcontractors bind companies, hmmm, yes. But applying law is not absolutely certain. The judge at trial may be very sympathetic to all debtors and may not understand the harm freeloading causes to all other consumers and businesses. The evasive tactics applied here are attempted and sometimes successful. Such attempts can include an effort to reschedule attorney conferences based on illness or death in the family. The opposing attorney’s client may attempt bankruptcy and incorporate in another state nearby.
Happy Ending: When any old freeloading customer provides payment, which may be over a year later, they are redeemed. It is wise to obtain a credit card to guarantee payment and test it for validity or obtain payment for any new business in advance. They are no longer in freeloader status. Although they put you through the ringer, if the customer makes payment, all is forgiven.