I think that it’s fairly obvious that I am rather angry about the underhand way that I have been treated by Working Capital Partners Ltd and seeing that one of their other introducers left them a five star review on Trust Pilot I thought that I would leave my own views on there too.
My review generated the following response from Perry Burns:-
I’m am truly sorry Ian, that you feel like this and that you have chosen to air your grievance in this way. It is absolutely not standard practice as you state. Our broker agreement specifically anticipates and excludes this circumstance. Just as our clients pay no monthly administration, monthly minimums or termination fees, so our introducers’ entitlement to commission ends if or when the agreement terminates. It is interesting that after the client realised what he had lost by moving to another Factor – in terms of flexibility, personal service and bad debt protection; he came back to us directly and not to you. In fact when I spoke to him, he expressed surprise that you had continued to be paid commission (at very substantial levels) even though all you had done was to pass on a name and phone number two and a half years ago. It is important to realise that ultimately it is the client that pays the commission and while we think it is right and fair to compensate an introducer for putting us in touch with a potential client, we do not agree with you that this represents an automatic right for us to load a client’s fees once the introduction has lapsed and the agreement has been terminated.
I have several comments to make on Mr Burns’ response starting with his comment of me “choosing to air my grievance this way” I really don’t know what the company expected me to do as once they had said that they didn’t intend to pay me any further commission, dialogue with them was effectively over. I can’t respond on Trust Pilot so have chosen to use this blog to air my grievances.
Secondly Mr Burns claimed that the client said that “all you had done was to pass on a name and phone number two and a half years ago” which was effectively true although the client had never heard of spot factoring so I had to sell the concept to him. Furthermore Mr Burns seems to be ignoring the fact that I introduced this very lucrative prospect to his Working Capital Partners and not Creative Capital or Catalyst Finance or Interface Financial Group all of whom would have gladly accepted the business and probably wouldn’t have screwed me in the process.
Mr Burns states that paying commission on a client that leaves and swiftly returns is “absolutely not standard practice” which I believe shows how out of touch he is with the whole factoring market as not only is it very much standard practice but I have posted comments from directors of four separate factoring companies on my original blog post confirming that it is very much standard practice and if Mr Burns is not happy with those four I can easily get some more.
I’m intrigued to know why if Working Capital Partners didn’t intend to pay my commission on the return of the client did Andy Phillips the Director of Sales telephone me to give me the good news that they were returning?
Mr Burns states that their broker agreement “specifically anticipates and excludes this circumstance” but I will have to take his word for as I have never seen his agreement and as previously mentioned have always done business on the basis of mutual trust.
I do find it rather an odd clause to put in a broker agreement though and if true I can’t see the higher profile larger broking outfits signing it or even agreeing to it.
Two or three years ago when ABFA brought in some recommendations from their Professional Standards department many factoring companies did send out broker agreements and I checked back over some agreements that I received from other factoring companies and as expected none of them mention such an eventuality at all. Needless to say I didn’t receive one from Working Capital Partners at all.
Mr Burns further claims that “It is important to realise that ultimately it is the client that pays the commission and while we think it is right and fair to compensate an introducer for putting us in touch with a potential client, we do not agree with you that this represents an automatic right for us to load a client’s fees once the introduction has lapsed and the agreement has been terminated”
Yet again this is at odds with standard industry practice as introducer commission is a cost that is normally borne by the factoring company. There are a couple of large broking outfits that insist on introductory commissions far larger than the industry norm and if Mr Burns’ comment that their commissions are loaded onto the clients’ fees is true then they would never sign anyone as they would be hugely uncompetitive
Obviously I won’t introduce any further prospects to Working Capital Partners as if they are happy to screw their brokers I dread to think how they would treat their clients.
I was chatting to an old factoring friend who had moved over to a spot factoring company and told him that I was on the lookout for a new provider.
He seemed quite shocked when I told him what had happened and confirmed that if I introduced a client to them that went away and returned within a few weeks they would continue to pay the introductory commission.
I also asked him if they charged a higher rate to companies that came via a broker to those that came direct and he confirmed that they would not and that broker fees were an overhead that they absorbed.
The icing on the cake is that their standard fees factoring fees are actually lower than Working Capital Partners.
As an end piece to this post I received an email from a major factoring company last week telling me that an introduction of mine several years ago that went bust in October has now set up again and the newco will be marked as an introduction from myself.
I’m glad that there is still integrity in the majority of the factoring world.
Four comments from factoring company directors below showing just how far Mr Burns’s comment that to continue paying an introductory commission to a company that leaves and returns very quickly is “absolutely not standard practice” is not borne out by the factoring world in general.
(please see additional information in the form of comments here