Financial Times gets in on the “regulation of factoring companies” act

The Financial Times has now got in on the act by reporting on the campaign for regulation of factoring companies but unfortunately they do themselves no favours as the one newspaper that is supposed to understand corporate finance has managed to get it all wrong.

The first paragraph starts off with “A group of business owners pushing for regulation of lenders that provide funding based on company order books has admitted that it is likely to be a more difficult process than first imagined.”

How can one be expected to take an article seriously when they don’t even appear to understand what factoring is.

The next section deals with the comments made by one particular insolvency practitioner who is trying to convince people that regulation isn’t necessarily a good idea – well shock, horror turkeys are against Christmas. Obviously insolvency practitioners aren’t keen on regulation as many of their more outrageous money spinning activities will be severely curtailed.

The final segment of the article homes in on one particular case where the company owner blames a specific factoring company for putting his company down but only factoring insiders will understand from what sketchy details have been given that the company was involved in fresh air invoicing. Perhaps he read the Financial Times article and thought that it was acceptable to factor his order book.

I am all for regulation and for much greater tranparency in the relationship between certain factoring companies and the insolvency profession but come on, this company was defrauding his factors and deserves everything he gets

1 thought on “Financial Times gets in on the “regulation of factoring companies” act”

  1. According to Leasing Life the Asset Based Finance Association (ABFA) is ‘frustrated’ by lobbyists meeting with government and implying poor practice within the industry.

    “ABFA head of government affairs Matthew Davies said that there was no ‘inquiry’ into the industry and pointed out that so far only one complaint had been made public, referring to the FT article which mentions ABFA member Bibby Financial Services”

    Matthew Davies obviously has a very short memory as he has already forgotten about Brian Moore’s company which is very surprising seeing as it’s Brian that has set this whole regulation of the factoring industry movement in motion due to the way that he was treated by his factoring company.

    If anyone in authority wishes to find out the extent of the malpractices I am quite happy to give them the name of one particular factoring company and one particular insolvency firm and they can then plough through the official records to find the names and addresses of quite a few people who might have something interesting to them 🙂

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