How can you resolve a dispute with your factor?

What can you do if you have a dispute with your factor? 

The ABFA, the industry’s main watchdog organization, has clearly established rules for managing disputes between invoice finance providers and their clients.

As part of a new self-regulatory framework for the asset based finance industry, the Asset Based Finance Association (ABFA) implemented a complaints process relating to disputes between its members and their clients. The new procedures apply to actions taken on or after 1 July 2013. The ABFA represents the  asset-based lending, factoring, and invoice discounting industries in the UK and Ireland.

Under the ABFA’s complaints process, complaints must first go through the members’ own complaints processes before being eligible for the ABFA process, which is available once the member declares itself unable to resolve the complaint or once 12 weeks have passed since the complaint was first registered with the ABFA member. The ABFA Complaints Process is open to any client or prospective client of an ABFA member if that client has an annual turnover of up to £6.5 million.

As a first step, the client must formally submit their complaint in writing to the member involved. The complaint should clearly indicate what is being complained about and, if possible, provide an indication of what they believe the member must to do to rectify the problem. If the member confirms its inability to resolve the problem then the complainant should contact the ABFA, which will ensure that all necessary information is available before passing the complaint file on to the independent ombudsman.

Who pays for factor-client dispute resolution?

There is no cost to a complainant for making a complaint regardless of whether it is upheld or not. The objective is to make the dispute resolution process as accessible as possible and to ensure that any costs associated with the complaints process are borne by the ABFA members and not heir clients.