The problem
You run a restaurant or hotel and occasionally experience problems with customers making off without payment. How do you ensure that people pay for their meal or room?
Expert Advice
On a practical level, you should examine the layout of your restaurant or hotel reception in order to minimise the opportunities for bilking.
Restaurants may choose to take details, including telephone numbers or addresses, when taking bookings for tables. Some hotels now take the precaution of getting credit card details when guests check in.
If a group of customers arrives at a restaurant without a booking, ask for details or a credit card number before seating the group. This may be particularly advisable with large groups.
There are limits to what can be done to ascertain the identity of customers, and there is nothing to stop them giving false details. This is why tracing people after the event will always be difficult.
Suing for bills of less than £100 is probably not going to be worth the effort involved or the cost of issuing proceedings in the small claims court. The court fee is currently £120. Where a customer has failed to pay for a lengthy stay in a hotel and the bill is several hundred pounds or more, it may well be worth suing them if they can be found. Proceedings can be issued in the small claims court for any amount up to a maximum of £5,000.
According to the Financial Ombudsman Service and Trading Standards, if you have the credit-card details of a person who has failed to pay, you can use these details to charge the outstanding amount to the card. You have the implied authority of the cardholder to do this, as they knew that payment would be due when they entered into the contract. However, bear in mind that the card could have been stolen and may not belong to the person who gave you the details.
Having card details could also be useful when trying to trace a person who has made off without payment.
The law
Under Section 3 of the Theft Act 1978, making off without payment, or bilking, is a criminal offence. It is an offence to make off with the intention of not paying, knowing that a payment is required on the spot for goods or services.
In such situations you may decide to contact the police, and they may be able to trace the customer and press criminal charges.
If there is a dispute over service or cost in which the customer refuses to pay but leaves their details with you after you accept their offer to do so, then the situation is not a criminal matter. However, if a person leaves false details with the intention of not paying, then they may have committed a criminal offence.
In addition, it is possible to sue the customer for breach of contract: the business had an agreement with the customer to provide a meal or a room in return for payment; the customer has breached the agreement by not paying.
Suing the customer for the price of the meal might be difficult, not least because you have to find them and identify them first. It is more practical to try to avoid bilking happening in the first place.
Check list
- Take details of customers where possible and do not accept mobile phone numbers.
- Take credit-card details in advance, if you are able to.
- Make sure that the opportunities for bilking are reduced by the layout of your premises.
- If appropriate, install closed-circuit television cameras.
- Issue proceedings in the small claims court.
- Report the matter to the police.
Beware!
People who make bookings at hotels or restaurants with no intention of paying are the sort of people who will give false information. Avoid having to pursue customers who have failed to pay by training your staff to be vigilant.
Contacts
Sarah Squires at Rooks Rider
020 7689 7000
ssquires@rooksrider.co.uk
www.rooksrider.co.uk
The Commercial Court
020 7210 2266
www.commercialcourt.gov.uk