Factoring Company Rules
There are many reasons why one would want to change their factoring company with the main one being that the facility isn’t performing as well as expected. In times of old the ABFA published the rules and regulations that their members agreed to abide by and one of those rules was that a factoring company wouldn’t put undue obstacles in the way of an unhappy client that wanted to leave.
Historically the factoring company would ask that the balance of any minimum annual fee that hadn’t been paid would be paid as a penalty and the company would be allowed to transfer to a different factoring company as it was deemed fruitless to try to hang on to a client where the relationship had broken down.
Those rules and regulations that used to be on the ABFA’s website for all to read have long since disappeared but what is equally worrying is that in these difficult economic times where factoring companies are struggling to increase their client base one of the major bank owned factoring companies has taken to refusing to allow their clients to terminate early and are forcing them to “work their notice” in the hope that they can be persuaded to stay.