All of the factoring companies that we deal with are committed to the new ABFA code of conduct with training sessions being held to ensure that all staff members fully understand the Code.
The factoring companies are contacting their introducers to confirm that they are fully compliant with the code and outlining the terms on which they will do business with the brokers. We have already seen and responded to a fairly lengthy agreement from one of our panel of factoring companies and have today received a much shorter version from another factor which I thought I would reproduce in part so that those sceptical onlookers could see how seriously this matter is being taken:-
“As a member of the Asset Based Finance Association (ABFA), XYZ Factors is committed to implementing the new Code of Conduct which comes into effect from 1st July 2013.
The aim of the Code is to ensure that clients are treated with honesty and fairness with all facilities operated in a professional and transparent manner.
With these principles in mind the code requires that:
All terminology relating to notice periods, termination fees and collect out fees must be clear and transparent. All collect out fees will need to be justifiable and the ABFA Member may have to provide confirmation of how the collect out fee was calculated.
Furthermore the Code does not allow for any payment to a third party of any portion of a collect out fee.”
Needless to say Factoring Solutions is more than happy to subscribe to those ideals and will in fact only deal with factoring companies who are fully committed too