Any success on recovering payment on undelivered tooling or machine parts?
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  1. #1
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    Default Any success on recovering payment on undelivered tooling or machine parts?

    Two things up front: 1. I don't want to get into the details of this (supplier, type of product, etc.) and 2. I would really prefer to stick to the subject at hand as I can't afford to waste much more time on this.

    I made a down-payment on a "machine add-on" system, about $3K for a $6K total. This was for a standard "brochure type" product, not custom (made-to-order). There were two "add ons" that you could consider custom but they quoted a fixed cost. Assuming they (might just be "he" as I think it's a very small company) are telling the truth (which is increasingly looking more like "lying"), they are having trouble with one of the add ons. Long story short, it's way over-due and there has been NO evidence that the item has even been built (I've asked for photos and videos). Response to emails and phone calls is getting slower and slower, I'm at the point where I'm thinking legal action if the only alternative.

    One other important detail: I'm in the US, they are in Canada.

    So, my one and basically only question is, has anyone been in a similar situation: made a downpayment (let's say for a less than $10K item), got nothing, took legal action and had any kind of success in at least getting part/most of the payment returned?

    I am not really looking for legal advice, more just "how did you do it?" (type of attorney,etc.) and "what was the outcome?", "was it worth it", "are there other alternatives?". For car insurance claims, some contractors, etc. they have mediators but I can't imagine there's one for this process. No, didn't pay with a VISA (dammit, I wanted to do it that way and it was an alert that I should have started to question the integrity more).

    I've had worse situations but they involved much higher investments. This one is on the lower end of balancing the outcome with further input.

    Thanks for any advice but also please don't spend too much of your time on something that's already become a learned lesson for me: do a bit more investigation on the business when you make an "over the airwaves" purchase on a company you don't know much about. I learned this for larger companies years ago and just didn't think it would be an issue for this smaller purchase.

    Thanks,
    The Dude

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    Nothing that has gone across borders, but i have had success getting things resolved by sending a registered letter to the owner / manger that clearly states the facts and your intentions in a non threatening but professional way. Phone calls and emails are fine, but they may not be getting to the right people.

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    Quote Originally Posted by RJT View Post
    Nothing that has gone across borders, but i have had success getting things resolved by sending a registered letter to the owner / manger that clearly states the facts and your intentions in a non threatening but professional way. Phone calls and emails are fine, but they may not be getting to the right people.
    Thanks, I thought that might be my next step. So far, I haven't done anything "disparaging" and kept it professional.

    The Dude

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    You can only sue them in a jurisdiction where they have a physical presence, so that means most likely in Canada. No idea how the Canadian court system works, but I assume that would not be worth the time and money to try to get $3k back. How about trying a collection agency in their neck of the woods? They don't charge if their isn't a recovery and I think the average fee is 25%. Do the research on the collection agency before hinting you will use one.

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    Quote Originally Posted by Dualkit View Post
    You can only sue them in a jurisdiction where they have a physical presence, so that means most likely in Canada. No idea how the Canadian court system works, but I assume that would not be worth the time and money to try to get $3k back. How about trying a collection agency in their neck of the woods? They don't charge if their isn't a recovery and I think the average fee is 25%. Do the research on the collection agency before hinting you will use one.
    Wow, totally forgot about that option. Probably because I've (thankfully!) never needed it in the past!

    Thanks,
    The Dude

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    My (US) company had a past due Canadian university. Waaaay past due. I got a spam call from a debt collection agency seeing if we had any business for them. I asked if they did Canadian customers and they said they did. I got the debt collection agency's name. Then sent an e-mail to the university saying we would be turning their past due account over to the debt collection agency in 7 days. Magically got a wire transfer a few days later. This was about a decade ago.

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    Quote Originally Posted by RJT View Post
    Nothing that has gone across borders, but i have had success getting things resolved by sending a registered letter to the owner / manger that clearly states the facts and your intentions in a non threatening but professional way. Phone calls and emails are fine, but they may not be getting to the right people.
    I would agree that sending a registered letter is a good suggestion. I was told by an attorney years ago that in the legal world phone calls "never happened" as conversations can be denied and I assume emails also not so great since they could claim they were accidentally deleted as spam. etc.

    Your job now is to document a timeline of events in case you need to go further. Also, I wonder what Canada's laws are regarding non-fulfillment of paid contracts. If they have something like an AG a complaint to their office might help if you can not resolve this by yourself.

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    I would go with the collection agency. I had a problem with a customer until I mentioned collections and magically things changed.

    Tom

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    Most cost effective option would be a small claims court,do some research on the system.....my experience of debt collectors is they send off one demand,thats it,no more action......they are looking for easy pickins........ive cracked some tough nuts by going with bikies...they charge 50%,but never failed to collect........before you cry about 50%,thats after all else has failed..............and the court system isnt straightforward,neither,......Canada is likely like here ....you get a judgement ,woohoo,then you have to apply to another court for an enforcement order ,generally against a specific item or asset......then you can apply to have the respondent made bankrupt.....still no money in your pocket ,tho,and lots to lawyers..........However ,be sure to sell the debt to the bikies,then you arent an accessory to GBH,or MS.

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    Quote Originally Posted by john.k View Post
    Most cost effective option would be a small claims court,do some research on the system...

    ...Canada is likely like here ....you get a judgement ,woohoo,then you have to apply to another court for an enforcement
    order...still no money in your pocket ,tho,and lots to lawyers...
    The Small Claims Court system in Canada is pretty user friendly and there's no need for lawyers. In fact, the courts tend
    to frown on people who get lawyers involved. They try and keep it as simple and straightforward as possible.

    You would have to appear at least once in the jurisdiction where you are suing. In most cases there will be a "settlement
    conference" where you sit down face to face with the opposing party and an adjudicator. From what I remember--it's been
    quite a few years since I had anything to do with the system--the adjudicators ruling carries the weight of law and has the
    same status as a court order issued by a judge.

    And yes, you would have to enforce the order but there are steps you can take. However, we Canadians being the meek
    and humble souls that we are most people will pay up once a judgement is rendered.

    As far as I know all the forms and information you need are available online. There are documents which explain which forms
    you need and how to fill them out and file and/or serve them. Definitely an option to consider and, except for the time and cost
    required for your appearance, your costs would be minimal...

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    Hey thanks guys. I am going to do some further checking but here's the #1 issue: trying to recover $3K is very time sensitive. There are a lot of other things I could do with my time if I were to go to Canada (at least two full days considering the travel). But, as I said, I don't want anyone to feel I've wasted their time in reading & replying, I will do some investigation.

    Follow-up question: this is "reverse" of the usual collection agency scenario. I have paid money I'd like returned rather than delivered something and not gotten paid. Is this an issue at all, can anyone vouch that this process works in reverse (customer wanting funds from supplier than supplier from customer).

    Thanks all!
    The Dude

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    I have successfully used a polite but firmly worded letter from an attorney delivered via certified mail to each of the owners of the company. Took about 60 days.

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    Quote Originally Posted by john.k View Post
    Most cost effective option would be a small claims court,do some research on the system.....my experience of debt collectors is they send off one demand,thats it,no more action......they are looking for easy pickins........ive cracked some tough nuts by going with bikies...they charge 50%,but never failed to collect........before you cry about 50%,thats after all else has failed..............and the court system isnt straightforward,neither,......Canada is likely like here ....you get a judgement ,woohoo,then you have to apply to another court for an enforcement order ,generally against a specific item or asset......then you can apply to have the respondent made bankrupt.....still no money in your pocket ,tho,and lots to lawyers..........However ,be sure to sell the debt to the bikies,then you arent an accessory to GBH,or MS.
    Bikies... You're not talking about those weirdos from Mad Max, are you?

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    I would not think a letter from a lawyer would do any good in this circumstance. No lawyer is going to take a case against a business out of the country of this amount on a contingency. Also only a person made of money that wants justice is going to spend $200+ an hour trying to recover $3,000.

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    Hate to add to the discouragement but this is representative of just about every failed manufacturing enterprise. Somebody gets an idea but has no clue how to operate a business. Probably he ran out of operating capital when he discovered he owed taxes. Or spent your prepayment as well as everybody else's and now has no ability or motivation to deliver. Lost cause; write it off as just an expensive lesson. It should keep you from making any more expensive ones.

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    OW is correct......except the sympathy.......most of these guys are pros at stealing money.......they are too dumb to run internet scams,so they do plain old cons........ammounts too small to interest the cops,but big enough to for them to enjoy the lifestyle they want........and I doubt any lawyer would go further than a letter......because without a written contract you have the makins of a breach of verbal agreement lawsuit.

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    Have you considered possibly filing fraud charges against the company. If you have a receipt, proof that you paid, etc. and they have not delivered you may be able to contact the local constabulary and their fraud division, if they have one. A visit from the the local PD might get them interested in compliance.

    JMHO

    -Ron

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    Boxcar pete....not mad max......more like "sons of anarchy"....

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    Did you buy a Canadian SwissMak?

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    My neighbour at the last shop had an installer who had been a neo-nazi skinhead, had the tattoes (swastikas etc) up and down his arms and neck, also quite large.

    The neighbour used to send him to ask politely when he was going to get paid if it was passed due. He never had to be sent a second time.

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