Ex Officio assessment in debt collection

In the world of debt collection, there is one term every entrepreneur should know: ex officio assessment. This legal principle can mean the difference between a successful collection and coming up empty-handed. But what exactly does an ex officio assessment entail? And why is it so crucial in debt collection procedures? In this blog, we dive deep into this topic, provide concrete examples, and offer valuable tips for business owners.

What is an Ex Officio Assessment?

An ex officio assessment is a principle where a judge evaluates aspects of a case on their own initiative, even if the parties involved have not explicitly raised these points.

In the collection industry, this means the judge critically examines the claim and all accompanying documentation, regardless of the information provided by the claimant. Therefore, it is vital that you inform your customers extensively in advance about all aspects of the agreement.

For agreements and terms regarding private consumers, you must mention and explain at least the following components:

• The products or services delivered (including key characteristics).
• Your company’s name and address details.
• Total price (including any additional costs).
• Costs for using a means of communication (e.g., extra telephone charges for customer service).
• Payment method(s).
• Information regarding delivery, execution, and the delivery timeframe.
• Right of withdrawal (the consumer's right to cancel a purchase).
• Return shipping costs.
• The liability for reasonable costs (for example, when canceling a course; you may not charge for the entire course, only reasonable expenses incurred).
• The duration of the agreement and conditions for termination.
• Minimum duration of the agreement.
• The payment obligation.

The Importance of Ex Officio Assessment in Collection Procedures

This form of assessment plays a protective role, particularly for debtors. It ensures that collection demands are fair and based on complete and accurate information. Furthermore, it protects the integrity of the legal process by preventing the awarding of unfounded or exaggerated claims.

Challenges for Entrepreneurs

Many business owners encounter issues in debt collection cases because they cannot provide all the necessary documentation and evidence. This can range from contracts and agreements to correspondence and proof of payment. Without these documents, there is a high probability that the judge will reduce the claim or even dismiss it entirely, regardless of the claim's validity.

Practical Example

Suppose you are an entrepreneur and your customer hasn't paid the invoice for your services. You decide to hire a debt collection agency to enforce payment. Unfortunately, you do not have the agreements in writing because they were discussed verbally. Even if you delivered the services exactly as agreed, you run the risk of the judge not recognizing the claim simply because you cannot provide the necessary evidence.

Another example is a situation where your customer (the opposing party) claims that the services rendered did not meet the agreement. Without detailed documentation and proof, the judge may decide there are insufficient grounds for the claim, even if the debt truly exists.

Tips for Entrepreneurs!

Prevent a rejection by the judge during the ex officio assessment by always keeping the following tips in mind:

1. Document everything!
   Ensure that you accurately track and safely store all agreements, communication, invoices, and proof of delivery or service. These documents form the foundation of your claim in the event of a collection procedure.
   
   
2. Record everything in advance
   Avoid future problems by drafting clear agreements and recording arrangements in writing beforehand. Include all twelve points mentioned above. This makes it easier to defend your position if disputes arise later.
   
   
3. Customer confirmation
   Have your customer confirm all purchase information before the transaction. Communicate all details of the purchase and the general terms and conditions in advance, and have the customer confirm this with a signature or a checkbox in the ordering process.
   
   
4. Consult an expert
   Consider seeking legal advice when drafting contracts or general terms and conditions. You can always contact your representative at Ultimoo to make your case as strong as possible.
   
   
5. Use effective technological solutions
   Various software solutions can help you securely store all documents and information. This can be invaluable when you need to provide evidence in a collection case.
   
   
6. Know your rights and obligations!
   Immerse yourself in the laws and regulations surrounding debt collection or seek expert advice. This ensures you are not caught off guard and are better protected if problems with non-paying customers arise.

Are You Dealing with Non-Paying Customers?

Whether you deal with unpaid invoices occasionally or regularly, it is vital to be well-prepared for an ex officio assessment. This strengthens your position in debt collection cases and prevents surprises. Contact the experts at Ultimoo Incasso for further advice and support.