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subscriber default - sue or not?  collection issues
April 20, 2017
subscriber default - sue or not?  collection issues
    Subscribers have a number of obligations once the contract is signed; paying the charges for installation and the recurring services one of them, and the focus of today's article.
    Contracts are entered into after negotiations and each party has a right to expect the other to fulfill their end of the bargain.  In your case you are expected to install or provide the equipment and provide the continuing services, such as monitoring, inspection and repair service.  
    What should you do when your subscriber fails to pay you as expected?  How long do you wait before you need to consider the subscriber's default is imminent and likely permanent?
    When you should start to be concerned is the easier question.  The answer is, when the subscriber breaks routine or practice in paying you.  One subscriber may routinely pay 60 to 90 days late; another by the 10th of the month.  Once you know their practice you need to take your first step in the collection process, which is reminding the subscriber that you haven't received payment.  The response will tell you all you need to know.  Either payment will be made or you'll get the reason payment hasn't been made.  That reason may be something you've done that you can correct, or, something that has caused an irretrievable break in the relationship.
    Whether you should start collection proceedings is the next consideration.  There are a bunch of factors you should consider:

  • what was your investment in the account
  • how much have you recovered prior to the subscriber breach
  • do you have staff assigned to the collection process or will your attention be required
  • do you have sufficient number of collection matters to warrant getting involved
  • a factor you should try and ignore is your personal emotion or visceral feelings - be objective
  • how much money is involved
  • do you have a lawyer to process the collection proceeding, at what cost, and how time consuming is it going to be

    Attrition is a factor of life in all businesses, but not one you have to accept without recourse.  All the factors should be considered, and once you are committed to the process and pursue your subscribers on a regular basis the analysis will be intuitive.
    What was the investment in the account and how much have you already recovered and what's left on the contract?  If you've gotten your investment back and moved into the black, how much is left?  If not enough to justify a day of your staff's [or your] time, probably not worth it.  If under $1000, after expenses you're not likely to end up with enough unless you have many accounts that in the aggregate make it worthwhile.  My office processes cases in any amount because we treat the entire alarm industry as a single client, all given priority in the office.  But if you send over one case for $500 don't expect to end up in the black; you may end up spending good money after bad.  If your internal collection staff has enough accounts to work with then the analysis should be based on how much is recovered monthly from all the accounts.  
    Of course we process accounts owing tens of thousands and sometimes more than a hundred thousand dollars.  These accounts are obviously worth pursuing, especially if the subscriber default is not justified and the subscriber has "deep" enough pockets that the judgment will be recoverable.
    If you use our updated Standard Form Agreements we will represent you in the collection process.  You can get information from our head collection paralegal Kathleen Lampert by calling her at 516 747 6700 x 319 or emailing her at  You can learn more about our collection department here
    Tomorrow I will address how the collection process starts when you engage us.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
516 747 6700
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