Problems with agencies that don't pay: What can a freelancer do? (Money matters)

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Problems with agencies that don't pay: What can a freelancer do?
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Problems with agencies that don't pay: What can a freelancer do?

Thread poster: Jillian Pandor

Jillian Pandor
United States
Local time: 18:28
Spanish to English
+ ...

Oct 23, 2013

Hi Everyone,

I am writing to all of you in hopes of some serious advice related to a topic that is incredibly important for all of us Freelancers.

Recently I started working with a translation agency here in Spain. I did my homework, and researched a bit to make sure everything was legit. I checked the ProZ.com feedback and checked out the company itself as much as I could, and everything seemed to be alright.

When I started working with them, they told me that they had a 60 day pay period. Although that is a little more than I would prefer, I obviously agreed to the terms and took on various translation projects.

When the first invoice was due, I waited a week or so and still no payment was made. I finally got in touch with a woman from the company's finance department who started telling me that the payment wasn't made because someone in their finance department was out on vacation (not an excuse...), and finally they made the payment 12 days late, on the 12th of the month.

Now, I have another invoice that's due for around 150€. When I first saw that the invoice was overdue I immediately got in touch with the company inquiring about the status of the payment. I didn't receive a response until weeks later, because apparently now the OTHER woman was on vacation (once again, not acceptable seeing as there is apparently no control of anyone's position when they are on vacation). She passed me on to the same person who apparently worked in the finance department, but this woman now told me that SHE would get in touch with the finance department (leading me to believe that she no longer formed part of that division of the company...again quite fishy!).

She then explained that they only make payments on the 15th of the month, which is obviously not true...seeing as this never formed part of our original agreement and seeing as the last payment that they made was the 12th of the month, NOT the 15th. Not to mention, if that were true about the 15th of the month, this payment would have to have been made on the 15th of LAST MONTH (September) since it was due on the 12th of September (only 2 days prior).

I was patient and waited until the 15th of October (which was now a 90 day pay period instead of 60 days). I got in touch with the woman on the 15th of October and she didn't respond until the next day, saying that yes the transfer had been processed, but it had been processed at the end of the day on the 15th...she of course sent no receipt of the transaction.

It is now a week later, the invoice is 40 DAYS OVERDUE and I have still not received anything in my bank account, leading me to believe that the bank transfer never took place. Last Friday I got in touch with this woman again, requesting the transaction receipt and she didn't respond. Yesterday, I finally got a response from her other coworker (the PM) who tells me now that the other woman is out of the office due to personal problems and she (the PM) isn't sure if she can help me seeing as she doesn't work with invoicing. Oh, and the best part, she asked for my patience with the matter because her work is accumulating (as if 40 days isn't having enough patience).

As you can imagine, I am incredibly dissatisfied with this situation. I would NEVER turn in a translation late, but for some reason they have no problem paying me 40 days beyond the established pay period (that might I remind everyone, the company itself established!).

Last night, after sending another email to this woman explaining my frustration and reiterating all that I have gone through with them and my expectation that they respect the pay period, I started to investigate this company yet again. I have found them as a vendor on ProZ.com and see that within the last 2 months or so they have received 3 negative comments stating that they do NOT pay on time. Some translators have waited between 2-3 months to receive their payment.

I obviously don't plan on working with this company ever again, but I do want to receive my payments, both this one that I am mentioning and another one that is technically due on the 30th of this month. I find it absurd that I am wasting more time and energy on trying to get paid than the time and energy that was required to do the translations.

I was wondering if there is ANYTHING I can do? Does anyone who works with agencies here in Spain know of anywhere I can go to report this company? It's absurd that just because someone is a freelance translator that they have to keep quiet and deal with such treatment. Is there anyway of going through ProZ.com and reporting this company so that they no longer are able to post jobs (especially since I am not the only person that is experiencing this)? I am not so much worried about myself (because let's face it...I'm in pretty deep at this point) but I am worried about other translators that don't know that this company doesn't pay and without knowing that, they accept translation work. I trust ProZ.com (as well as I am sure many other translators do) and use it a lot to assure myself that a company is legit...but in this case they are proving to be anything but legit.

Any help that anyone could give me is MUCH appreciated!

I would like to thank you all in advance for your time...even though being a freelance translator can seem like you are on your own a lot of the time, it's SO nice to know that there are so many of you willing to help through these forums! It definitely reminds me that although the work may be independent, this is such a community!

Kind regards,
Jillian ▲ Collapse

Diana Coada (X)

United Kingdom
Local time: 23:28
Portuguese to English
+ ...

How I do it:

Oct 23, 2013

1. I send three reminders.

2. If they are not replied to or if the invoice is still not paid, I send an email detailing all the websites, payment lists, Facebook and LinkedIn groups that I will use to expose their behaviour. This usually does the trick.

3. However, if that doesn't work either, I use http://payontime.co.uk/ to calculate interest fees and compensation for late payment, and start sending the revised invoices. I make sure to tell them that the invoices will be revised and sent weekly, and that eventually a debt collection fee will also be applied to the invoice.

Last time I used step three, I got paid the following day.

Good luck and I hope this helps you.

PS: I guess this would only apply with agencies in the UK.

[Edited at 2013-10-23 10:52 GMT] ▲ Collapse

Marie-Helene Dubois

Spain
Local time: 00:28
Member (2011)
Spanish to English
+ ...

I hate to say this

Oct 23, 2013

but I have experienced very similar situations in the past and these have all been with Spanish agencies. There are of course some Spanish agencies that pay on time. A bad apple shouldn't spoil the whole bunch. However, I do now (where I can) try to avoid new Spanish agencies precisely because of these types of practices.

What I would do:

1) Write a message on the Blue Board. Keep it factual. Just say how many days the payment is overdue by and explain that no explanations have thus far been forthcoming as to the reason for the delay. I believe that if the points rating goes below a certain threshold, the company will be banned from posting jobs on Proz.
2) Send them a burofax. You can do this through the "correos" website and it's going to cost you about 4 euros or so. Explain on this burofax that the payment is overdue, let them know how much it is overdue by, reiterate that you have issued several reminders. Give them 7 working days to pay and explain that failing receipt of the payment on the date specified, you will take any legal action available to you. (I have some standard wording in Spanish. PM me if you'd like me to pass it on). You can also explain that you are keeping colleagues informed of your progress in obtaining payment from them.
Since a burofax is usually a precursor to legal action, this usually makes them sit up and take notice. (If you don't live in Spain and find you can't send a burofax, a registered letter should have the same effect).
3) Forget about it until the 7 days have elapsed.
4) Actively look for some new clients.

You will probably find that they pay you. I have always (touch wood) obtained payment -albeit at times extremely late - from all Spanish agencies I have dealt with. The thing that irks me the most are the oh-so-transparent lies/excuses. "August came along", "The person is on holiday", "The other person is on holiday", "The person is ill", "My boss isn't there", "We lost your invoice", "We don't have your account number (when it's on the invoice", "You haven't sent us X vital document required by Spanish law (when they've already paid me in the past)"etc. etc. These are all standard issue unfortunately.

Just don't take it personally or worry about it too much because if you do, they're costing you more money. I would advise you to go through the motions and wait for the money to come in. ▲ Collapse

Grace Martins

Sheila Wilson

Spain
Local time: 23:28
Member (2007)
English
+ ...

Show them you mean business - you have the law on your side

Oct 23, 2013

I'm sorry to hear of your problem, Jillian. It is a problem with some agencies, particularly those with longer payment terms, though fortunately there are still many good payers out there, too.

I think it's important to approach payments chasing in as business-like a way as translation delivery. You need to set yourself reminders and keep to them. I make sure I send the first, informal, reminder at due date +1-7 (+1 if they've let me down before). If no payment arrives I send another, rather more formal but still polite, at D+15-30, depending on whether there was any response at all to the first. The final reminder follows after a similar time-scale. That one is very formal, it's written on paper and sent through the mail by registered post to their registered address, with proof of delivery coming back to me. It talks of my firm intention to pursue the matter by any means available to me if payment isn't received by dd/mm/yy, and to charge all costs plus interest to their account. It isn't a threat, it's an absolute right, anywhere in the world I believe.

Of course, there can be telephone calls along the way, in fact they can be a very good idea. But never skip the written reminders as they're your proof that you've done everything right and the client is 100% in the wrong. I often find that the registered letter shakes them into paying. If it doesn't, you're looking at paying a little more to recover the debt. But first, do everything to check their solvency: nobody can help you get money out of a bankrupt company, all you can do is contact the receiver.

For a small amount, between the USA and the EU, you're limited. But would it be worth 30 minutes of a lawyer's time? A letter on official legal headed paper, setting out all the steps to come and the associated costs, shows that you're not going to give up. The other route is a debt recovery company - often they'll pay their own fees out of the sum collected. I imagine you've already registered your dis-satisfaction with this company here and elsewhere. Please leave such comments to stand for others to see, even if you do amend them slightly if payment is eventually received.

Good luck and let us know what happens. ▲ Collapse

Jillian Pandor
United States
Local time: 18:28
Spanish to English
+ ...

TOPIC STARTER

A few more things related to your replies...

Oct 23, 2013

Hi Ladies!

Thanks SO much for the great advice!

I do however have some questions. You all mention contacting the company via certified mail/burofax, etc. Up until this point I have been communicating with the company exclusively via email...I figured that by having everything in writing I was covering myself (whereas with a phone call if I ever needed to get a lawyer involved, it's my word against theirs). Is an email not considered enough proof that they received my messages? Does it absolutely need to be something more official?

What Sheila mentions is another interesting point. Is it legally within my rights to charge them all costs that are involved in pursuing this payment (ie. certified mail costs, or possibly lawyer fees)? Can these things legally be added in as line items in the invoice? I personally think it's only fair that they pay for the extraordinary measures that I need to take to get them to pay me.

What Diana mentions is also interesting...and this is my next question. Do any of you ladies know how to calculate late fees? Is it within my rights to charge late fees? Do agencies normally end up paying them?

What I was thinking is that from now on I need to start including a late fee policy in the terms and conditions listed on my invoices. Legally, if they accept the invoice does that mean they are automatically accepting to the terms and conditions set forth on it and they will be bound to them? Or...is it necessary to have each client sign the invoice stating that they agree to the late fee terms and conditions (which would be difficult). Do any of you have experience with such policies? Or advice??

I will definitely be leaving feedback about this company on ProZ.com as well as some other pages...like we have all said, it's so important that other people don't fall into this trap!

Thanks SO much ladies!!

Jillian ▲ Collapse

Marie-Helene Dubois

Spain
Local time: 00:28
Member (2011)
Spanish to English
+ ...

Hi Jillian

Oct 24, 2013

Certified letters do have more clout than e-mails. It shows you are serious and since these could potentially be used as proof in a court case, it also shows you mean business.

I have unfortunately had some court cases in Spain against companies who didn't pay me and, although e-mails can be accepted as evidence under certain circumstances, the trouble with e-mails is that they can so easily be amended after the fact and they can so easily be claimed not to have been seen by the other party.
The good thing about a burofax is that you can also certify the content, although this is taking things slightly to extremes. A registered letter with acknowledgement of receipt will do. The fact that it is on paper makes it harder to amend and means that the court will have less trouble accepting the information contained within it.

While you have to think about, and plan for, the worst (which would be taking legal action), it is important to remember that your primary goal is for the company to pay you. Sometimes, just showing you mean business and that you are going to pursue your payment is sufficient for this.

While late payment interest and legal fees and costs can be legally-enforceable if things get to court, hopefully things won't get to this. You do have a right to impose interest for late payments as any business does. Sometimes just mentioning this is enough of a deterrent for the company to pull their socks up.

You do have a right to charge late-payment interest and if a court finds in your favour, this interest will automatically be granted to you (unless there is an out-of-court settlement which companies often agree to, to avoid paying legal fees and interest).

You do not need to put this on your invoice or have it signed per se because it's the law but some colleagues do find, again, that mentioning this and reminding agencies of this is enough of a deterrent.

Just to end on a positive note, I think we've all experienced what you're experiencing at some point and it's easy to think that you have to do all sorts of things to avoid this happening again because it does kind of seem like the end of the world when you are having difficulties obtaining payment from a company but (although you do have to manage risks in your business), these tend to be isolated cases and most clients do pay without any trouble.
The trick is to weed the dodgy ones out as soon as possible and build up a reliable client base. Once you have, it's likely you won't have to go through this again!

Good luck!! ▲ Collapse

Christel Zipfel

Local time: 00:28
Member (2004)
Italian to German
+ ...

Late fees

Oct 24, 2013

Jillian Prevost wrote:

What Diana mentions is also interesting...and this is my next question. Do any of you ladies know how to calculate late fees? Is it within my rights to charge late fees? Do agencies normally end up paying them?

What I was thinking is that from now on I need to start including a late fee policy in the terms and conditions listed on my invoices. Legally, if they accept the invoice does that mean they are automatically accepting to the terms and conditions set forth on it and they will be bound to them? Or...is it necessary to have each client sign the invoice stating that they agree to the late fee terms and conditions (which would be difficult). Do any of you have experience with such policies? Or advice??

Thanks SO much ladies!!

Jillian

Yes, you are absolutely entitled to charge late fees within the EU. There are late fee calculators on the web, no need to calculate them manually. You can even claim a lump-sum of 40 Euro as collecting fees, unless higher expenses are envolved.

You don't need to mention this explicitly in your invoice, as this is European law, but it is always better in my opinion.

So at this point, I would send them another invoice with late fees plus 40 Euro.

Good luck!

Jillian Pandor
United States
Local time: 18:28
Spanish to English
+ ...

TOPIC STARTER

Thanks SO much!

Oct 24, 2013

Hi Ladies!

Thanks SO much for your information! I am definitely going to go ahead with the certified mail or burofax (haven't quite decided).

I just received another email basically giving me the run around saying that the payment will be made with there next batch due to errors x y and z...! Of course, none of this is true.

I sincerely appreciate the info as far as the 40€ that can be charged! Thanks so much Christel! Do you happen to have any sources on this? Just to be able to read more about it.

I have opened a new forum since we changed topics a little bit, if you ladies have any other comments or if you want to follow the topic you can find it here:

http://www.proz.com/forum/money_matters/258418-late_fees_on_invoices:_what_are_freelancers_rights.html

Thanks again SO much!

Kind regards,
Jillian ▲ Collapse

Attila Piróth

France
Local time: 00:28
Member
English to Hungarian
+ ...

Info on late payment

Oct 24, 2013

Here is an interesting article, which you may quote to your client: Europe cracks down on late payment. Just two snippets:

Around 25 percent of all bankruptcies in Europe are due to late payments
...
If all European businesses, public authorities and consumers paid their bills and invoices in full and on time, the money saved from written-off bad debt would equate to a €312 billion cash injection for businesses throughout Europe. That is more than the Greek, Irish and Portuguese EU/IMF bailouts combined!

A campaign article from the European Commission is available here. The Directive 2011/7/EU on combating late payment itself is available here in multiple languages.

Best,
Attila

[Edited at 2013-10-24 09:30 GMT]

Jillian Pandor
United States
Local time: 18:28
Spanish to English
+ ...

TOPIC STARTER

Are there loopholes?

Oct 24, 2013

Attila Piróth wrote:

A campaign article from the European Commission is available here. The Directive 2011/7/EU on combating late payment itself is available [http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32011L0007:EN:NOT]here[/url] in multiple languages.

Best,
Attila

Thanks so much Attila! Can I still quote this law if on my invoice I have my American address?? I did this project over the summer when I was in the US and now I am back in Spain dealing with this problem. What I don't want is for them to find a loophole and try to tell me that the EU laws don't apply to me because my invoice states I am living in the US.

Thanks again so much!
Jillian

Jillian Pandor
United States
Local time: 18:28
Spanish to English
+ ...

TOPIC STARTER

@Attila

Oct 24, 2013

Another interesting point:

"Article 6
Compensation for recovery costs
1. MemberStatesshallensurethat,whereinterestforlate payment becomes payable in commercial transactions in accordance with Article 3 or 4, the creditor is entitled to obtain from the debtor, as a minimum, a fixed sum of EUR 40.
2. Member States shall ensure that the fixed sum referred to in paragraph 1 is payable without the necessity of a reminder and as compensation for the creditor’s own recovery costs.
3. Thecreditorshall,inadditiontothefixedsumreferredto in paragraph 1, be entitled to obtain reasonable compensation from the debtor for any recovery costs exceeding that fixed sum and incurred due to the debtor’s late payment. This could include expenses incurred, inter alia, in instructing a lawyer or employing a debt collection agency."

They mention the 40€ recovery fee that we are entitled to, but they do not mention interests. Is this instead of the interests or would the interests be applied in addition to these 40€?

Thanks! ▲ Collapse

Attila Piróth

France
Local time: 00:28
Member
English to Hungarian
+ ...

The article gives sound advice

Oct 24, 2013

BUT I’M NOT A EUROPEAN!

If you’re operating a business outside of the European Union, the laws of the land you’re a citizen of apply, UNLESS you add a clause to your contract stating that your client will submit to the legislation of the court where they are located. Of course your client needs to agree to that.

Should you run into contractual or payment problems with European clients, let them know that you’re aware of the new EU legislation. Should they try to cut you a different deal, tell them it’s not fair to apply one set of rules for contractors inside the EU zone and another for those outside the European Union.

But it seems to me that your client may not react if you do not go beyond reminders. So, I think you have to apply Diana's second step, and involve third parties.

As for the interest: you are entitled to an annual interest rate of ECB's main refinancing rate + 8%. ECB's main refinancing rate stands at 0.50-1.0%, so when you add 8%, you are slightly below 10%. For €150, this would mean €15 over a year – so it is less than €2 for 40 days. Instead of adding it, you may waive that and keep only the 40€ admin fee.

Best
Attila

[Edited at 2013-10-24 09:47 GMT]

Samuel Murray

Netherlands
Local time: 00:28
Member (2006)
English to Afrikaans
+ ...

The address on your invoice

Oct 24, 2013

Jillian Prevost wrote:
Can I still quote this law if on my invoice I have my American address? I did this project over the summer when I was in the US and now I am back in Spain dealing with this problem.

Surely the address on your invoice should be the address of your business, regardless of where you may find yourself personally at the time that you send the invoice...?

I suspect the invoice law that would apply is the law of the country where you pay tax on the money that you get from that invoice.

Samuel Murray

Netherlands
Local time: 00:28
Member (2006)
English to Afrikaans
+ ...

Who decides what is reasonable?

Oct 24, 2013

Jillian Prevost wrote:
"Article 6
Compensation for recovery costs
3. The creditor shall, in addition to the fixed sum referred to in paragraph 1, be entitled to obtain reasonable compensation from the debtor for any recovery costs exceeding that fixed sum and incurred due to the debtor’s late payment. This could include expenses incurred, inter alia, in instructing a lawyer or employing a debt collection agency."

I just wonder who decides what is reasonable? Probably a judge at some court somewhere.

sailingshoes
Local time: 00:28
Spanish to English

There's not a lot you can do but...

Oct 24, 2013

I have worked as a freelancer for thirty years and I've never not been paid, although sometimes payment requires effort.

Obviously you should try to vet new agencies in advance by getting a third party opinion on them. I only work for a handful of trusted agencies who always pay on time and always consider new agencies a risk.

Methods I have used to get paid:

a) Threaten to contact the agency client and complain to them.
b) Threaten to sell of the contents of the translation to the highest bidder (not legal, but scary).
c) When these ploys didn't work with one agency I visited their offices accompanied by a large Colombian pal of mine who simply sat there staring at the secretary (he's the nicest person in the world, but I told him not to speak). I was written a cheque within 15 minutes.

The bottom line is, if not paying is more trouble than paying, people pay. ▲ Collapse

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