Case study

Debt Collection Solutions

Multinational recovering funds from past employees


James T is head of payroll in a multinational company in the Chemical industry, SPC. He is looking for a solution to recover funds from past employees. These debts have occurred in different ways. James explained: “In some cases, HR simply omits to inform payroll that an employee has left and salaries continue to get paid for a number of months, or we realise that a bonus or holiday pay was miscalculated in their final salary. We also have a scheme whereby managers are given cash advances in order to buy their two-year-old company car at a very discounted price, when they are entitled to a new company car. Managers often like to buy their old car for a family member or a friend. These cash advances can be repaid in monthly instalments but some managers leave their jobs before they have fully paid for their cars…”

SPC always write to their former employees and clearly explain how the liability has occurred but such conversations are often difficult to have and SPC’s HR Department is ill-equipped to chase regularly and escalate appropriately. James adds: “when we have made a mistake, they think they can keep the money. We try to find the right tone and to be fair and we always suggest that the outstanding liability can be repaid in instalments. But I think our soft approach makes it very easy for our past employees to ignore the situation, and, as a result, many of these debts get old. Unfortunately, some people will keep what’s not theirs and try everything to avoid paying back.”

SPC aren’t always sure where their past employees are, and whether they are ignoring their letters or have moved address. When they have moved, they can’t easily locate them.

As a side issue, some of our top executives move to a job in another country leaving a Tax liability behind; when this happens, many Governments are entitled to recover the tax shortfall from the employer. When this happens, SPC never seem to manage to trace their former employees in another country.

Our Solution

CLI have been collecting similar debts for a number of years, acting on behalf of travel insurance or life insurance companies. When an insurance company makes a duplicate payment for a claim to one of their insured, they never seem to get their money back. Such is life! Many people won’t return overpayments. At that point, they become a debtor.

When we take on this kind of debt, we will initially carry out a trace to make sure we are writing to the debtor’s current address. We then use a specific workflow which explain in great detail that the situation is unacceptable and will escalate to legal action unless the debtor makes meaningful proposals to repay the debt. Courts have, in the past, accepted our claim for interest at the current Court rate of 8% per annum on this type of debts. But most debtors, thankfully, will avoid Court proceedings as they gradually come to realise that keeping what is not yours is theft, and most of the time, we will manage to reach an acceptable repayment agreement with them.


When James placed his first batch of debts with us, 48 debts totalling £756k, he was surprised how quickly things progressed. Over half of SPC’s past employees had moved address and thanks to our specialist tracing tools, we were able to reach debtors, many of whom claiming that they were not aware of the situation and had never received any of SPC’s letters. Within a month, we had collected £103k, and signed 17 monthly repayment agreements. The biggest liabilities were with the top Executives who had moved abroad and within 6 months, after our TCM Offices in Argentina, Dubai, The Netherlands Nigeria and Canada had caught up with some of them, a further £230k was collected.

At our 6 months review meting James said: “you guys are amazing! You took away from us a task that we were struggling to do, never enjoyed doing, never did regularly or well enough, and you have already collected over 50% of the cases we gave you to collect.”

Credit Limits International Ltd has a specific approach to each debt collection project. Our international tracing and debt collection capabilities really add value to our clients’ organisations and everyone can focus on their core business. James and his team can just do Payroll, and we just adjusted a few situations which were a bother for SPC.

Are you in a similar situation?

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