Using a Debt Collection Agency for Deferred Payments
The Consumer Credit Act of 1974 states that a credit agreement is an agreement between an individual, the debtor, and any other party, the creditor, by which the creditor provides the debtor with credit of any amount.
We know that in most circumstances, school fees are paid in a prompt manner. However, should a parent delay payment or ask for a reduced instalment plan, this could fall under the Consumer Credit Act as they are effectively requesting credit. If this is the case, then the creditor, in this case the school, will need to be authorised by the Financial Conduct Authority in order to agree such a proposal and recover their monies.
Most schools usually have a pre-made agreement for fees to be paid, either within the same school year to which the fees relate or payable by the end of each term. Anything over the agreed timeframe could mean that you need full authorisation by the FCA but doing so for such a few specific cases may not be commercially viable. In these circumstances, it may be best to appoint a debt collection agency to deal with deferred payments while schools can focus on more pressing matters.
To see if this will be something that we can assist you with, please give us a call on 01883 212121 or email us at enquiries@tclsllp.com.