Care Free Credit

Re: Care Free Credit

Braden Collins — Fri, 30 Jan 2015 09:20:56 GMT

I think if you make the surcharge a processing fee/fee relating to the time it takes to process the paperwork, then it's legal and legit.

To be honest, when we tell people what the extra charges are they will often pull out the credit card or "find the money" themselves. We probably use it twice per month on average.

Re: Care Free Credit

Bob Russell — Thu, 29 Jan 2015 12:31:35 GMT

[quote user="Braden Collins"]We use a similar company to this in oz and I reckon it has saved us so many headaches. We add a surcharge to cover the fees to us so we get the same amount. We've found payment a bit slower than promised but it has always come through. It has meant the legit people have been able to get credit when needed and the dodgies have been refused without us looking like mongrels. I was skeptical at first but would strongly recommend all clinics who get an occasional bad debt to have a look. For us this sort of thing works well, and if the client defaults then they chase them, not us.

[/quote]

I think one of the issues is the legality of charging extra as a surcharge. I cannot see the problem with a practice directing someone (perhaps employed but cash flow stretched) to a lender offering a 7% rate, for example, where the alternative is a 29% credit card. This can be sold as a special arrangement with the practice to help people out of a jam.

7% gets paid by client but grateful to be directed to someone able to help when something goes wrong. Would this require a credit licence if there were a leaflet available in the practice? Different from insurance leaflets?

Re: Care Free Credit

Braden Collins — Thu, 29 Jan 2015 02:00:31 GMT

We use a similar company to this in oz and I reckon it has saved us so many headaches. We add a surcharge to cover the fees to us so we get the same amount. We've found payment a bit slower than promised but it has always come through. It has meant the legit people have been able to get credit when needed and the dodgies have been refused without us looking like mongrels. I was skeptical at first but would strongly recommend all clinics who get an occasional bad debt to have a look. For us this sort of thing works well, and if the client defaults then they chase them, not us.

Re: Care Free Credit

Gillian Mostyn — Wed, 28 Jan 2015 19:49:44 GMT

Most vet practices offer (have no choice but to give) interest free credit all the time. Every time a client waits longer than 30 days to pay their bill, in fact. It still costs the practice money... It is simply harder to quantify. It is probably better to receive 90% now than 100% in 6 - 12 months!

Re: Care Free Credit

Arlo Guthrie — Wed, 28 Jan 2015 19:15:31 GMT

[quote user="Evelyn Barbour-Hill"]Arlo, you have misunderstood. Mr. H. was quite right to reply to my comments, which were truthful, but I do not think this open forum the place for he and I to then engage in a discussion over details. That is what I meant. [/quote]

I guess we'll have to agree to disagree about this. You've stated you're unimpressed by the difficulty in getting information - all Stewart has done is clarify what they replied to. That allows you the opportunity to check whether there is something they've missed.

Anyway, obviously some miscommunication going on there which would be nice to get rectified, not that it's really any of my business!

[quote user="Evelyn Barbour-Hill"](Suppose credit cards had just been invented, and the card acquisition company said they would charge the merchant 7.5% on each transaction. Would you sign up?)[/quote]

Am I right in saying that this is really your main bone of contention? In other words, like Michael, you're asking why should practices bear the cost of the credit given to the client?

That, I agree with you completely, is a point worthy of discussion.

As I understand it, that is the model on which the service is being marketed. But as Stewart has explained, the model is flexible so if you DON'T want to offer interest-free credit, you don't have to. You could just offer credit and pass all the costs onto the client. Or you could do a half-way house.

But would that be the best thing to do? I wonder.

Of course the immediate reaction to the question of who should pay the costs is that of course the client bloodywell should! They shouldn't own a pet if they can't afford the bill.

But the more pragmatic approach (I think, anyway) is to take the emotion out of it and simply ask what is going to have the most beneficial effect on the bottom line. Apologies in advance for teaching Granny to suck eggs here, I'm just trying to explain my thinking ...

So, in one scenario you offer the credit at cost and pass all the fees to the client: "Mr Hardup, there's a company that can offer you credit on your vet bills at x%".

For the sake of argument, lets say you have six clients over the course of a year that say they are unable to pay a £1000 bill immediately. If three of them accept the credit on the above terms, you get £3000 immediately. Let's say the rest default (or you end up chasing them at your cost).

Alternatively, you offer your clients interest-free credit. More of them will accept. Let's say four. But you only get £930 from each. Still, you now get £3720 immediately.

My point is that I think this needs to be looked at quite dispassionately, and considering only what will put more money in your bank account!

I was just looking at that facebook page mentioned in another thread where owners were all grumbling about money-grabbing vets refusing to give back ashes until payment was made. It does make me just a little uncomfortable with the message that offering credit at market rates sends to clients. In other words, you're pushing clients to take out credit to pay your exorbitant bills (I don't mean they are exorbitant, just that's what people say). Doesn't it send an altogether more positive message in keeping with a caring profession that you offer interest-free credit in cases of genuine need?

I dunno, if it were me, I think I would offer it interest free just to those clients who have got caught out by an unexpected bill (and for whom the alternative would be a likely default or a very protracted and time-consuming retrieval), and absorb the costs elsewhere.

Re: Care Free Credit

Evelyn Barbour-Hill — Wed, 28 Jan 2015 16:51:05 GMT

[quote user="Arlo Guthrie"]

[quote user="Evelyn Barbour-Hill"]Of course you are right to defend your enterprise. [/quote]

[quote user="Evelyn Barbour-Hill"]However this open forum is not the place to pursue a private discussion.[/quote]

Evelyn, you've just contradicted yourself there. I mean, you can't have it both ways. Either Stewart is right to defend his enterprise or he is not!

From where I am sitting, it is wrong of you to take a pop at his enterprise, and then argue that this is not the place to reply. What, so you think he should just leave your comment unreplied to in this forum, so any subsequent reader would go away with just your side of the story?

Hardly fair.

[/quote]

Arlo, you have misunderstood. Mr. H. was quite right to reply to my comments, which were truthful, but I do not think this open forum the place for him and me to then engage in a discussion over details. That is what I meant. Thus I am not going to recount my experience in any greater detail. I shall wear my red star with pride.

The original poster asked if anyone would share their experience or opinion.That is what I did. I said I was not impressed and offered some good reasons why. I doubt if anyone seriously interested would abandon the idea just because of my opinion.

(Suppose credit cards had just been invented, and the card acquisition company said they would charge the merchant 7.5% on each transaction. Would you sign up?)

Re: Care Free Credit

peter chalkley — Wed, 28 Jan 2015 15:51:31 GMT

Our practice has been looking at this, we are very much looking from the point of view that getting 90% of the money is better than 10% of the money, as we are only the vets, we don't need paying!!

has anyone had clients using this service who have missed payments/failed to pay?? if so, what happened to them?

not that we have clients who might fail to pay.....................but..........

Re: Care Free Credit

Bob Russell — Wed, 28 Jan 2015 14:09:26 GMT

I would find it preferable for a company to offer reasonable interest rates to owners at short notice (subject to credit worthiness). I would happily refer clients to a contact number or numbers where I believe they would get a fair hearing and response quickly.

Most introducers get a fee from the credit company, I would do it FOC but I would not pay for the privilege of my clients getting interest free credit!

Re: Care Free Credit

Arlo Guthrie — Wed, 28 Jan 2015 14:09:21 GMT

[quote user="Evelyn Barbour-Hill"]Of course you are right to defend your enterprise. [/quote]

[quote user="Evelyn Barbour-Hill"]However this open forum is not the place to pursue a private discussion.[/quote]

Evelyn, you've just contradicted yourself there. I mean, you can't have it both ways. Either Stewart is right to defend his enterprise or he is not!

Hardly fair.

[quote user="Evelyn Barbour-Hill"]My head nurse commented immediately that it was like saying to the client "Take out a loan to pay us, Mrs. Bloggs, and we will pay the interest for you".[/quote]

That's one way of looking at it, I suppose.

Another might be that it is like saying to your client Mr Hardup, who owes you £1000 BUT HAS NO WAY OF PAYING: "We can offer you a interest-free solution to make things easier", and then to your bank: "Here's £930 immediately, which is pretty good when you consider that Mr Hardup was looking like he might default completely. At best, we'd have incurred costs of more than £100 chasing the debt, at worst we'd have got nothing"

Must say, when I found out about Carefree Credit, I thought (and continue to think), it is a SUPERB idea. That's why I've promoted it in our newsletter and in banners on the site (I am not taking any payment from them for it).

My impression is that there are too many pet owners who try to avoid their financial obligations, and this is a really good tool to have in the armoury. It may not be suitable in every case, but it doesn't have to prevent very much bad debt before it has paid for itself (i.e. if it means you get one £1000 bill per annum paid when it would otherwise have defaulted, you've wiped your backside, so to speak).

Re: Care Free Credit

Evelyn Barbour-Hill — Wed, 28 Jan 2015 13:42:15 GMT

Dear Mr Halperin

Of course you are right to defend your enterprise. I stand by everything that I wrote. However this open forum is not the place to pursue a private discussion.

My head nurse commented immediately that it was like saying to the client "Take out a loan to pay us, Mrs. Bloggs, and we will pay the interest for you".

As I said, it wouldn't suit me. It may suit other practices very well.

Re: Care Free Credit

Stewart Halperin — Wed, 28 Jan 2015 12:15:34 GMT

[quote user="Evelyn Barbour-Hill"]Looked into it, was not impressed. It took a lot of effort to get accurate information from the company.[/quote]

Dear Evelyn,

I'm sorry if you felt it took a lot of effort to get information from us. Our content management system tells us that you first made an inquiry via our website on Oct 29th 2014 and had contact with our office via 4 emails from the 30th October. We additionally then had another 5 emails by way of correspondence between us directly on the 18th and 19th of November.

Reviewing these emails, I do believe that all your questions were answered in a timely and accurate fashion and that you were just waiting on rates from your buying group. In your particular case, your buying group has had rates provided to them, and will be making these known shortly.

[quote user="Evelyn Barbour-Hill"]You need to register with Financial Conduct Authority or whatever it's called, which will cost you at least £145 per year.[/quote]

All practices offering finance facilities do need to be registered with the Financial Conduct Authority (FCA). There is a fee of £145.00 for this initially and then an annual fee of £100. This is entirely an FCA issue and we have no control over their fees. We do however offer extensive phone and online help with every practices application for which we do not charge a fee.

[quote user="Evelyn Barbour-Hill"]The fee they take from you varies a good deal, but the least was 7.25% and that was for a loan period a good deal less than a year: 3 months I think, could have been 6 months.[/quote]

Regarding the percentage of the loan that CFC charges, we say the average is 7% simply because we have a large offering of interest rates to owners as well as length of loan times and the percentage that we need to charge the surgery varies depending on these parameters. We are very happy to send you a complete list of these but as you say, it may be better to wait now for your buying group rates. I would add that our rates to practices are far better that similar systems offered in the US or Australia.

[quote user="Evelyn Barbour-Hill"]Then there's the effect of VAT. Suppose their fee was 7.25%. They charge that on the whole sum due, which of course includes the 20% VAT you are collecting for the government. So really you are paying 8.7% to collect your money. If that's not the position, I'd be very happy to hear so, but that is what I was informed was correct.[/quote]

As far as VAT is concerned, hopefully you received the comprehensive breakdown of how this is dealt with in practice but I am happy to send this again together with an example of a loan say where the client fee is £1000 plus VAT and how the VAT element is dealt with.

Again if I can be of any help whatsoever, I'm very happy to have a chat on the telephone.

Re: Care Free Credit

Stewart Halperin — Wed, 28 Jan 2015 11:22:39 GMT

[quote user="Michael Woodhouse"]I don't understand why this isn't set up to put the extra fees onto the owner? Offering credit is fine, but why the hell should the practice pay?[/quote]

Dear Michael,

FCA regulations stipulate that when offering 0% finance to patients you cannot then add a fee as it wouldnt be 0%!. However we have many practices offering low interest credit - 4.9%, 9.9% and so on to thier cients and for these the practice can charge an admin fee which you can make equivalent to the fee that the practice pays to Carefreecredit if you so wish.

I hope that makes sense, happy to answer all questions and happy to have a chat on the 'phone or in person

Re: Care Free Credit

Michael Woodhouse — Wed, 21 Jan 2015 20:36:19 GMT

I don't understand why this isn't set up to put the extra fees onto the owner? Offering credit is fine, but why the hell should the practice pay?

Re: Care Free Credit

Evelyn Barbour-Hill — Wed, 21 Jan 2015 19:07:53 GMT

Looked into it, was not impressed. It took a lot of effort to get accurate information from the company.

You need to register with Financial Conduct Authority or whatever it's called, which will cost you at least £145 per year.

The fee they take from you varies a good deal, but the least was 7.25% and that was for a loan period a good deal less than a year: 3 months I think, could have been 6 months.

Then there's the effect of VAT. Suppose their fee was 7.25%. They charge that on the whole sum due, which of course includes the 20% VAT you are collecting for the government. So really you are paying 8.7% to collect your money. If that's not the position, I'd be very happy to hear so, but that is what I was informed was correct.

I'm waiting to hear what terms my buying group can secure. Have been waiting some time.

It might suit you. It wouldn't suit me.