Need Small Business Legal Advice About Problem Customer

[turnone]

Quick question/scenario I'm currently in that I would like to discuss with lawyer.

Summary: 

 

I have worked at customer off and on as subcontractor for a few years.

I severed ties with that distributor and continued to work with customer, like most of my customers, as direct bill.  Distributor knew this and didn't have a problem.

 

I went to customer 3 times, billed each time, never received payment.  At the end of the first visit, I gathered CC info just in case there was a payment problem.  Said I wasn't coming back in for visit #4 until payment was made in full via check.  They agreed and made payment via check.  Visits 4, 5, and 6 until all the issues on two printers and one PC were resolved.  Normal repairs don't take that many visits, but someone else had hacked it up before hand and it was a weird problem on one.  Very unlikely cable failure.

 

I sent the invoices at least 5 times no response, then finally billed their CC.

 

Now they threatening to file charges for fraud/theft since they say I was unathorized to charge, contact Amex and the printer mfg unless I come in again at my expense to fix more issues.  I have this all in email.

 

Before I respond, I wanted someone to review and advise. 

 

Thanks,

Chris

[Tpoppa]

When you gathered CC info after visit #1 what was the authorization agreement?

Edited July 17, 2013 by Tpoppa

[turnone]

Just verbal.  Nothing written down.  Took photo of CC info provided in writing from customer.  Didn't take paper with me, just photo. 

[Strictly Street]

Never leave with out a check, cc payment or service contract. If you do, never go back.

This movie ends with lawyers getting fees and everybody else being pissed off.

 

Small claims court for the deadbeat business owners doing the "We Won't Pay" shuffle.

To many small business owners will do this as a tactic. It's all about who they can rip off.

[Tpoppa]

If they threatening to sue, it would seem logical to threaten to counter sue over the missing payment(s). 

 

If they willingly provided CC info I don't know that they can claim it's fraud.  A signed authorization would be much cleaner tho.

[turnone]

Part of it seems like blackmail to me, your thoughts?

 

From their email

<<<<Here's what needs to happen:  Within 3 business days, the jv-160 needs to 

be running successfully at your expense.  If this arrangement is not acceptable

to you, I will assist Jack in taking the following steps:

 

1) Contact Amex and turn over all of your information.

2) Call the police and press charges for theft and fraud.

3) Send Mimaki and any other contacts I can come up with

    the police report.>>>>>

[Steve Butters]

I don't believe you had authorization to charge their card... They can sue you for that and you were in the wrong.. Just because you have the card doesn't mean you can use it without consent.

However, they are in the wrong as well by not paying you and now trying to blackmail you.

This doesn't look like a good outcome for either party involved and you may consider legal counsel from a real attorney because this could get ugly.

[snot]

How can they report fraud later if they suspect it now? I would think that they would need to do it now. I know they can complain about the service and request refund. You could report them to BBB for payment issues.

Need one of the lawyers on here to chime in.

Reverse charges and demand payment.

Edited July 18, 2013 by snot

[turnone]

I had verbal authorization, or feel that I did.  No set date, but they provided me info.

 

Looking for real legal advise.

Chris

[snot]

PM redkow97

[Steve Butters]

I had verbal authorization, or feel that I did. No set date, but they provided me info.

Looking for real legal advise.

Chris

You got authorization on visit 1, not visit 6.

No need to be a cock about it. If the advice you're getting here isn't good enough, call a real attorney instead of posting on a motorcycle website.

[turnone]

Sorry, wasn't trying to be a cock.  I enjoy the discussion.  Just agreeing, I need real legal advise.

[Steve Butters]

Sorry, wasn't trying to be a cock. I enjoy the discussion. Just agreeing, I need real legal advise.

No worries, guess I misunderstood. Cuddle?

[turnone]

I forwarded the situation to a lawyer I had used for a couple of collections I had a year or two ago. 

 

I give credit to very few people and this is exactly why.  But good customers expect to be billed and there is a balance.

 

I think at minimum I will create a CC authorization form and collect backup payment via CC with authorization to charge after invoice is 10 days past due (or something like that).

[turnone]

No worries, guess I misunderstood. Cuddle?

 

No way, I hate you now

[jporter12]

I forwarded the situation to a lawyer I had used for a couple of collections I had a year or two ago. 

 

I give credit to very few people and this is exactly why.  But good customers expect to be billed and there is a balance.

 

I think at minimum I will create a CC authorization form and collect backup payment via CC with authorization to charge after invoice is 10 days past due (or something like that).

 

This sounds like a very good idea for the future!  Although this makes me question why big companies can get away with this same stuff.  Directv is notorious for charging a credit card that you have used in the past, even if you don't have it saved and authorized for auto rebilling.  I've had it happen, and it seem that it's a common practice of theirs.

 

Now, from reading what you posted from their email, is there still a problem that you did not take care of, or is that something else?

 

No way, I hate you now

 

Butters just might even give you a reach-around...

[grapesmuggler27]

Everything you do needs to be in writing. My invoices for my job have signatures for permission for repair, acknowledging a diagnostic fee, and a signature tor them accepting once the work has been completed and they agree to said amount of invoice. Without thiat they could easily say you never explained the charges and just completed work without permission...gues what they win.

[turnone]

This sounds like a very good idea for the future!  Although this makes me question why big companies can get away with this same stuff.  Directv is notorious for charging a credit card that you have used in the past, even if you don't have it saved and authorized for auto rebilling.  I've had it happen, and it seem that it's a common practice of theirs.

 

Now, from reading what you posted from their email, is there still a problem that you did not take care of, or is that something else?

Great question.  I guess big companies can just bully people.

 

They have new problems that they seem to think I should fix for free.  This customer is a scammer and always has been.

 

Everything you do needs to be in writing. My invoices for my job have signatures for permission for repair, acknowledging a diagnostic fee, and a signature tor them accepting once the work has been completed and they agree to said amount of invoice. Without thiat they could easily say you never explained the charges and just completed work without permission...gues what they win.

 

I hate paperwork.  Normally not worth the hassle.  I just email people the work done and the bill.  If I collected payment at time of service, I attach a paid in full invoice.  If they have credit terms with me, I just attach an invoice with the payment terms.

 

Printing stuff out, getting it signed, etc. adds time and hassle.  Haven't had many issues, just one per year with payment issues.  I can usually guess ahead of time who will rip me off.  I have a lot of great customers and don't worry about payment from 99% of them.

[turnone]

 I also don't offer a warranty (express or implied).  Bill is for parts and labor.  Now, I always try to make it right at my expense if I make a mistake, but do not offer an official warranty.  Never on labor and 30 days on some parts.  I have under a very few circumstances provided a written warranty, but I priced accordingly.  In my line of work, there are too many ways for the customer to break the printer, so the risk is too high for me.  And since the market doesn't demand it, I don't offer.

[Tpoppa]

 

 

They have new problems that they seem to think I should fix for free.  This customer is a scammer and always has been.

 

 

On that same form you're going to create for billing authorization, you should include a space to document the scope of work to be completed.  Even if it's just a couple bullet points it will save you a ton of headaches down the road.

 

I implement software and modify existing software.  Clients are always trying to sneak in new requirements and claim they thought they part of the original estimate.  Documenting scope makes my life soooo  much easier.

Edited July 18, 2013 by Tpoppa

[Gump]

I'd let them sue. Screw them. On the other hand, you need to be more professional. Estimate, expected payment terms, and signature.

[turnone]

Lawyer buddy in FL told me I'm pretty much good to go.  He said I should have told them before I billed the CC.  I actually billed them then immediately sent paid in full invoices to them.  So I should have done that in the reverse order.

 

He also said theft is typically only applicable when it's not your money.  Processing a CC for money owed to you isn't theft or fraud.

 

Abuse of Process laws prevent someone from threatening legal action to coerce you, which is what they appear to be doing in this email to me.

 

And to Gump, I do provide estimates, when it is known issue.  I provide payment terms on the invoice (theirs was 'due upon receipt').  I don't do signatures as I hate printing stuff out, signing, taking home and scanning.  It adds a lot of work for just a few problems.  I hope I don't get to that point that I have to do it.  I always considered email was good enough.  If they have a question or problem, they just email me back.  Maybe I should ask them to reply that they agree.