Some good news just got a little better: the organisation that sets and enforces best practices for the UK’s invoice finance industry released an updated set of rules for its members on 1st July 2013.
The new rules deepen the commitment of factoring companies and other invoice finance providers to treat their clients fairly and responsibly.
The new self-regulatory framework from the Asset Based Finance Association (ABFA) consists of three key components:
- A revised ABFA code
- An independent complaints process
- A Professional Standards Council (PSC)
New reasons to trust your factor
Approximately 95 percent of invoice finance companies in the UK and Ireland claim ABFA membership, which requires compliance with the ABFA code. The code sets out the commitments that members must meet in their relationships with clients, prospective clients and guarantors.
The new complaints process provides a forum for clients who believe they have been treated unfairly by a member of the ABFA. The process offers free access to air complaints before an independent third-party organisation, and the costs associated with adjudicating complaints are paid by the ABFA member involved.
The Professional Standards Council – which is composed of individuals from both inside and outside the industry – oversees the ABFA code and complaints process and also considers and approves applications for ABFA membership. The PSC has the authority to impose sanctions and in some cases may even expel a member for misconduct.
Factoring and invoice discounting provide a reliable source of cash flow for SMEs. And with a newly strengthened code of conduct applicable to virtually all invoice finance companies, businesses seeking finance can rest assured that they are dealing with quality providers. The only catch? Make sure your invoice finance company is an ABFA member.