How do I report someone to a credit bureau?

July 6, 2007 8:27 AM

How do I report someone to a credit agency?

My spouse runs a fledgling LLC with her partner creating custom silver jewelry. A recent transaction has resulted in a gentleman ordering a piece for his wife and despite several calls to his cell he has not responded and I suspect has no intention of paying.

We're well aware that it was stupid to have delivered material in advance of payment - chalk it up to naievete and that this guy was a decent con artist, very smooth, sincere, and persuasive. But I feel incredibly pissed that this dickhead is likely laughing off the fact that he humiliated two people who are busting their asses to make their business venture a success.

I don't want to harrass this guy and turn things ugly, but was wondering, as an LLC, can we/they report him to a credit bureau? The cost [within reason] is not an issue, as I'm happy to take this wherever necessary on principle.

If it matters, I have his cell and home address via reverse lookup, and live in Oregon.

posted by anonymous to law & government (13 answers total)

The first step is to get the debt qualified by suing the customer. If you sue him, your court may file the judgment automatically (check with your circuit court clerk). Since he purchased from you, you can sue him in your local court (IANAL, check with an attorney).

As well, once you have a judgment, you can file a lien against his house (if he has one) or levy his bank accounts. It's fairly trivial to do so if you can track down his bank (getting that info can be easy -- have a friend at a local bank call him and ask him if he's interested in moving his accounts to a new bank. When he says no, ask "Well, what bank are you using now, I'm certain we can beat their services and fees!").

Otherwise, you need to be a subscriber to the credit bureau to make a report, something that costs significantly more than you make selling custom silver jewelry. :(
posted by Merdryn at 8:44 AM on July 6, 2007

I operate a small LLC and I had great success with WGC (http://www.wcgcollects.com/) They were friendly, trustworthy, and they collected on relatively small amounts. It also felt REALLY good to be able to follow through with threats to send a collection agency after someone.
posted by cmicali at 8:44 AM on July 6, 2007

At my last job, we would hand over our bad debt to a collection agency, and they would take care of all the credit reporting. I imagine that they would buy the debt from you, so it shouldn't cost you anything, although you might have to pay something to establish a relationship with them.

I would send him a letter (registered letter?) and say "Your account is seriously in arrears, etc. etc., will be transferred to a collection agency." Give him a few weeks, then send it to them.

If you do this, make sure you sit down with the collection agency and get the rules for how you act - for instance, AFAIK you can't accept payment from the guy once you've given the debt over to them. He'll probably be pretty mad, so make sure you follow the letter of the law.
posted by pocams at 8:45 AM on July 6, 2007

I'm happy to take this wherever necessary on principle.

Reporting him to a credit bureau isn't likely to bother him too much if he's the kind of guy who has a habit of not paying his bills... Why not sue him in small claims court instead?
posted by amyms at 8:46 AM on July 6, 2007

Oh I forgot to mention, we had great success with Elizabeth there (800-398-0830 x165) Say Chris from Reversible Records referred you.
posted by cmicali at 8:46 AM on July 6, 2007

Check with your state's Secretary of State or small business administration who are likely to have guidelines publications. You can even try asking the credit bureaus if they have a publication for small businesses who need to report a debt. The local SBA or your Secretary of State should be able to refer you to sliding-scale-fee attorneys groups that work with small businesses or entrepreneurs. Most pro bono credit attorneys are consumer-side, but there are a few that work with small businesses.

You don't have to sue before you try to collect a debt. That's wholly inaccurate, says the woman whose law firm has a substantial debt collection practice. A lawsuit is usually a later stage in the attempt to collect a debt. But debt collection is a heavily-regulated practice so be careful with any self-help you start.
posted by crush-onastick at 8:49 AM on July 6, 2007

(Should this be in a "law & government" category? Clearing that up with the submitter may prove as enlightening as other answers.)
posted by cmiller at 8:52 AM on July 6, 2007

Yeah, you're skipping a step by going straight for the credit report; call up a collections agent first. In fact, tell him that you're going to on date X (~ 2 weeks in the future), and see if that scares him into paying. If not, follow up on cmicali's suggestions.
posted by rkent at 9:04 AM on July 6, 2007

A collections agent will not pay you the full price. If you sue him, you can recover the full price plus court costs (depending on laws in your area, IANAL, etc., etc.). For this type of thing, a little online or bookstore research will give you all you need to file a suit in small claims court. Chances are, he won't show up, and you'll get a summary judgment which will be MUCH easier (and more cathartic) to enforce. As well, from my experience, collections companies will pay more for a judgment debt.
posted by Merdryn at 9:47 AM on July 6, 2007

and you'll get a summary judgment which will be MUCH easier (and more cathartic) to enforce.

A default judgment, and one which I'm sure the defendant will rush to pay with a skip in his step and a twinkle in his eye. Or not, in which case you'll have to go down with the sheriff to seize things and resell them, or sell off the debt to a collections agent anyway.

As well, from my experience, collections companies will pay more for a judgment debt.

Possibly, but again you have to go through more hassle to get there. Would be easier just to sell at a discount right now; it's worth calling a collections agent to find out, at any rate.
posted by rkent at 10:04 AM on July 6, 2007

We may need more detail to advise here. Remember you can email mathowie to add detail. The crucial question would be whether you have documentation that he ordered, and you delivered, this jewelry in exchange for a specific price.

If so, small claims court is ideal for this situation -- and he is betting you don't know this. You can tell him (via registered mail and keeping copies of everything) that you will take that step if he doesn't settle his debt within x days. This is very likely to produce a full payment without the help (or cost) of a collection agency.

(If not, your official remedies are limited and he definitely knows it.)
posted by lorimer at 11:30 AM on July 6, 2007

IANAL.

You say he ordered the piece, but did he receive it? You don't explicitly say. Did you have a contract for work? If he didn't take possession of it, I wonder how difficult the suing and legal steps would be: his natural claim would simply be "I went with someone else".
posted by boo_radley at 11:51 AM on July 6, 2007

But I feel incredibly pissed that this dickhead is likely laughing off the fact that he humiliated two people who are busting their asses to make their business venture a success.

For what it's worth, he didn't humiliate you; other than you, your wife, and people that you choose to tell, who knows about this?

You have learned a valuable business lesson (also important in this vein: have insurance, keep proper books, pay appropriate taxes, get everything in writing...) and that's embarrasing to you, but unless you tell everyone, nobody's going to know and there's no humiliation to be had.

As for the credit score, etc., there's lots of good advice above, and you should take it. :)
posted by davejay at 2:46 PM on July 6, 2007