Best of the ISP-Lists

Nonpaying Customers

Getting customers to pay their bills can be a constant headache for dialup-heavy ISPs. Members of the ISP-Lists offer wisdom on how to combat the problem.

[September 29, 1999]

In a thread on ISP-Tech in July 1999, PJ wrote:

"What you do with customers who won't pay. We have disabled their account and gone through the 'check is in the mail,' 'lost the bill,' etc. routine. Do you go to small claims court? Collection agency?"

Respondents suggested a wide range of approaches, including . . .

•  The collection agency route
•   Payment policy designed to minimize lateness
•   Progressively reducing service
•   Cut 'em off at the knees and forget 'em

Collections

[JL responded] " We do give all past due accounts to a collection agency, and it seems to work well. You probably won't get very much of your money back by the time they take their cut, but they will do all of the work. The key is that very often, just the threat of a collection agency is enough to get people to pay."

[BC added a suggestion] " If you do use a collection agency, you might want to add a line to your AUP stating that the customer is responsible for any collection procedures. We do this; our collection agency can collect their fees and we get our full share."

Policy

[JC took a different tack] "We're making it tougher for customers to get behind with us. Our payment options are:

1. Credit card
2. VCheck (we use OptiGold). This is basically a bank draft. They authorize us to print a check from them to us. Then we cash it.
3. Check with no monthly surcharge if we have a current CC on file
4. Check with a $5/mo surcharge for processing.

This really helps stop people from getting 30, 60, 90 days behind—and our having to 'write off' the revenue."

Service reduction

[AS was more tolerant] "I generally give 15 days grace. After that, if they don't pay, they can only access the internal network (send and receive email and see local web pages). After 30 days we cut access to receiving email only. Hardly any customers let this happen. Overall, we maintain very warm relations with our customers.

[JR observed] "We developed a module within our database that we run between 4:00 and 5:00 each afternoon. Any customer who was due that day but for whom no payment was recorded is automatically deactivated. When their payment is received, the account is reactivated.

We used to allow several days past the due date for mail delays and/or whatever and we found that the same few people would push it to the last day, each and every month. Those same people make certain, for the most part, to get their payment here by the due date now.

[BM had a clever solution] "We assign late payers a static IP address, which is filtered to disallow them any traffic except HTTP. (They can sill log in, but there's a session timeout of about 5 minutes.) Then all their HTTP traffic is redirected to a web page that tells them there's a problem with their account and asks them to call us to get it straightened out.

"This routine has brought in lots of customers to pay who ignored both the statements we mailed and the past-due email messages we sent."

Cut 'em off

[BW wrote] "This is how we do it:

• "Our bills are sent the 15th of the previous month, and are due on the 1st. (For example, July was sent June 15th, and was due July 1.)
• "If bills are not paid by the 5th - 7th, the accounts are suspended.
• "If the customer comes in to pay, they will be reactived, but not pro-rated. If they wish to be pro-rated, we charge another $10 setup fee. Their choice.
• "If the account is not paid by the next suspend dates, the accounts are cancelled, e-mail and homepages deleted.

"It's a tough policy, but it works."

[MT had a more simplistic approach] "We don't let are customers get behind! On the 15th of the month and the bill is not received we cut their access, final. We have been doing this for over three years now and have lost maybe five customers as a result. Frankly, I don't need that kind of customer in the first place."

[KR echoed these sentiments] "I would rather have fewer clients that pay their bills on time than twice the number that don't.

"Earlier this year we did some house cleaning and really clamped down on delinquent accounts. We literally lost hundreds of customers. But guess what? Our gross sales did not change much and we did not have to put in new phone lines for several months, which actually made our profits go up."

—End

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