where do I stand?

[June2009]

Dh and I run a Ltd company in the UK, one of our suppliers is in the USA, every month we pay them via international bank transfer.

They recently changed their bank details to a UK bank account set up with Bank of America.
We have tried to pay them twice so far using the details they have provided but both times the payment comes out of our account and then comes back in 4 days later and all it says it "BACS rejected".

The supplier insists that our bank should know why the payment has been rejected, our bank assures us that they can't tell us exactly and our supplier should ask their bank.
I am stuck in the middle being screamed at by the supplier. they do not take credit cards. I have offered several times to give a cheque to someone at their office in the UK but they have refused.

The supplier has said that other customers have had the same problem but managed eventually to get the payment through though she has not said how.
I have checked the details with her.
The problem looks like their "reference" (ie the actual account number the money should be allocated to once it is in the UK account( is too long to fit in the boxes provided, either online or at the branch.
and when i went to the branch I did point this problem out and that this was why I was at the branch and not setting it up online.

The situation now is that I went on holiday for a week. Before I left I went to the branch to set up a standing order to this supplier, the first payment covering the invoice that was due and the next one (paying a little bit early).

While on holiday I checked our bank accout and the money had come out.

Now it's my first day back at work and the money has been rejected AGAIN.
We've been on the phone to our bank this afternoon to chase this up, they will get back to us tomorrow. (with what... I don't know, they have not been helpful, the manager has had swine flu etc, we've been going round in circles).

The supplier has emailed me at 7pm tonight to tell me that they will suspend our services tomorrow morning at 9am because we're now two months late paying. (they charge in advance).

I have emailed the supplier again asking not to suspend the service as they can see that we have tried to pay (I have attached the bank statements showing the money coming out and back in twice, standing order form stamped by the bank etc) and at the end of the day it is THEIR bank rejecting it.

If they cut the services off tomorrow morning...where do I stand?

That very much depends on the terms of your contract with them.

Do you have a formal written agreement? If so you need to check the terms carefully. Look in particular for any dealing with the mechanics of payment, your obligations in relation to payment, their rights in the event of non-payment, what triggers their right to suspend services.

If you do not have a formal agreement then have you agreed (either orally or by email/writing) any specific terms in relation to these points?

There is a written agreement, I do not have it to hand but I would think that it says we have to pay on time or they charge us interest (this has happened once before when the payment was not done properly by my branch and got "lost").

I also noticed we're not actually 2 months late yet, next payment is due on 19th.

I am making the payments though, they're not getting them because their bank is rejecting them and sending it back.
What is stressing me out is that she's really not helping when she can see that I am trying everything I can.

Have you tried speaking direct to their bank?

I don't think we have, no. I'll try and call them tomorrow.
She has now emailed back to say that she will accept a cheque tomorrow if we pay 3 months but that she will not accept any other payments by cheque in the future and insists it's for us to figure out with our bank.

She's also grilling me about going on holiday!!! (my first week's holiday in over a year), that I should have given her someone else's contact details for her to chase up while we were away (there's only dh and I in the company, she knows this) besides that person who have told her that the payment had been made as that's what the bank acount showed until the 10/09 which is when I got back to the uk...
and why did it take 5 days for my bank to make a payment (how do I know??) and she wants me to show her the bank details I have used (I have sent her the forms already).

We have checked the bank details many times, I have douubled checked with her, sent her "print screens" of the online banking but she still says that they must be wrong when she can see it with her own eyes. .

Anyway, at least we're not getting cut off.

Tomorrow I will reply point by point and resend all the forms again to proove I have done all the things I said I did.

Glad to hear that they are not suspending your services (from what you have said it does not sound as if they would have the right to do that anyway - unless there is something specific in the contract). Legally I doubt that you are obliged to pay them 3 months because you are paying by cheque (unless there is such a requirement in the contract which would be unusual) but I'm guessing it is the safest option from a business perspective to ensure your supply continues.

I can see it must be infuriating to be doing what you can to get it paid and the supplier is being unhelpful (odd, you would have thought they would want to get paid!). Agree with cargirl that it is worth trying to speak to their bank however they may not talk to you (because of their security procedures). I'm assuming you've tried shortening the reference as you suggested that might be a problem? The only other thing I can think of is whether Bank of America does not accept BACS and that you would continue to need to do an international transfer even though it is supposed to be a UK bank account?