There has been a 123% increase in the level of bad debt recruiters are chasing in Q1 2009 vs Q1 2008, according to debt recovery law firm Lovetts.

In Q1 2009 the time between a letter before action (LBA) and claim was cut by over five days on Q1 2008. The figures also show a 66% increase in the value of debt being chased through LBAs.

LBAs are used to secure payment or to get a response from a customer before the start of a legal proceedings.   
                                  
Charles Wilson, chairman and managing director of Lovetts, says: “Our findings demonstrate just how active recruitment agencies have become in tackling bad debt. These businesses appreciate the risks of allowing late payments to become major debt issues.

“As such, they are acting on both longer-term arrears, and current outstanding payments which is dramatically increasing the level of debt chased.  This proactive approach to credit management is essential for businesses to survive during these tough economic times.”