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Is it standard for boiler installers to ask for payment up-front?

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Which? David

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17-Jan-14 12:45

Hi all. One of our members has informed me that they have been asked to make a payment (50%) to a business before installation of a new boiler. Does this sound OK to you? Is this something you would ask for or should they be wary of paying before any work has been started/completed?

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John Creasey - Boiler Installation & Service, Gas & Heating Maintenance

New Malden, Surrey

17-Jan-14 15:58

Hi - personally, on our contracts, we do now ask for an initial payment covering most of the materials a week before starting work on larger jobs only.

For the smaller business, to lay out 2k plus on boilers and radiators etc in advance can be difficult. All our clients are happy with this and understand (most clients are existing or recommendations anyway, so they know us)

I prefer also not to build up 'accounts' with suppliers and rather pay at the time of order - so cash flow is important.

Make sense?

John

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Which? David

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17-Jan-14 16:16

Thanks Muttley - that's a great help. I had heard traders saying the same thing precisely for the reasons you outline. It does sound reasonable - particularly on jobs where you are paying suppliers.

As you say, where customers know you/have used your services previously there's that pre-existing trust.

Can also fully understand the hesitation from customers in paying (even a small-ish installment upfront). Conundrum!

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Real boiler servicing & maintenance

Enfield, Middlesex

17-Jan-14 17:42

hi David,

I think its important how the payment is made, its not uncommon for traders to ask for payment upfront, and I do understand the need to protect the consumer but their are situations were the trader need as much protection too.

I don't like to deal in cash so avoid it at all cost, and often ask for bank transfer or Barclays Pingit service, even Paypal. this helps me regulate cash flow and offers the customer some protection, were the transaction is traceable.

As a last resort I have on some occasion offered customers to pay on delivery, were I turn up with parts sealed so they can be returned, collect deposit carry out works and collect final payment, but I would discourage any one making cash payments upfront, even if you have a estimate, receipt.

hope that helps.

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Patrice2009

Barnet, Hertfordshire

17-Jan-14 18:31

Many small businesses go out of business in this period of financial crisis. If a consumer pays a week before the job is supposed to start and the business goes to the wall, what protection is there for the consumer?

If the payment could be held by a third party and released to the trader/small business in instalments this would benefit both parties.

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Real boiler servicing & maintenance

Enfield, Middlesex

17-Jan-14 19:44

Originally posted by: Patrice2009 : View

Many small businesses go out of business in this period of financial crisis. If a consumer pays a week before the job is supposed to start and the business goes to the wall, what protection is there for the consumer?

If the payment could be held by a third party and released to the trader/small business in instalments this would benefit both parties.

Surely who ever this third party may be would incur costs (set up/running,etc), this would either be off set against the customer or the trader. And who would then regulate them, what if they hit financial problems too?

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John Creasey - Boiler Installation & Service, Gas & Heating Maintenance

New Malden, Surrey

17-Jan-14 20:30

Originally posted by: Patrice2009 : View

Many small businesses go out of business in this period of financial crisis. If a consumer pays a week before the job is supposed to start and the business goes to the wall, what protection is there for the consumer?

If the payment could be held by a third party and released to the trader/small business in instalments this would benefit both parties.

Hi Patrice - really do understand your concern, but you do have to look also from the point of a small sole trader who is like you trying to pay everyday bills, mortgage etc and being expected to finance the large purchases for a client.

One of the things we do is to allow clients to buy the materials direct from suppliers at our trade discount. We have zero mark up. We set up the deals for them. (Or they can purchase themselves at their own prices if they wish)

At least then the client has purchased the goods at a very good price, and the trader does not have to finance it. Not all people work this way though, and I certainly would not criticise them for marking up some sort of margin. It's just the way I work personally.

Hope that helps a little.

John

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Patrice2009

Barnet, Hertfordshire

19-Jan-14 14:31

All tradesmen I have used in the past 30 years have not asked to be paid until the work was complete. The funny thing is I knew or was known to all of them and would have been happy to pay most upfront with staged payments for larger jobs. Things have changed due to retirements and selling of a business and I now will have to employ unknown tradespeople. It looks like Which? local will be my pool of tradespeople in the future. It would be useful if we could pay an upfront payment to a bank with the money to be released to the tradesman at an agreed time.

I have watched so many 'rip off' type programmes where a member of the public paid thousands to a builder only for the 'builder' to start a botched job and then refuse to rectify it or return the money if they could be found. Most of these 'builders' only have a mobile phone number and the poor gullible consumer is left trying to track down the 'builder' who has moved on to the next victim. There needs to be protection for the consumer also.

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Patrice2009

Barnet, Hertfordshire

19-Jan-14 14:44

Originally posted by: Patrice2009 : View

Many small businesses go out of business in this period of financial crisis. If a consumer pays a week before the job is supposed to... Read more »

Originally posted by: John Creasey - Boiler Installation & Service, Gas & Heating Maintenance : View

Hi Patrice - really do understand your concern, but you do have to look also from the point of a small sole trader who is like you trying to pay everyday bills, mortgage etc and being expected to finance the large purchases for a client.

One of the things we do is to allow clients to buy the materials direct from suppliers at our trade discount. We have zero mark up. We set up the deals for them. (Or they can purchase themselves at their own prices if they wish)

At least then the client has purchased the goods at a very good price, and the trader does not have to finance it. Not all people work this way though, and I certainly would not criticise them for marking up some sort of margin. It's just the way I work personally.

Hope that helps a little.

John

I suppose I'm worried about two types of tradesmen. The first just getting by and existing from one job to another. If I pay a couple of weeks in advance and another customer lets him down that may be enough to end his business. I would then have paid my money without getting the job done. The second type I fear is the botcher. He will demand his money upfront, then start the job and disappear or even worse complete the job to such a poor standard that your house becomes unsaleable. You have paid for a decent job and have been left with an unsafe job that has to be undone to bring you back to pre builder state.

Paying upfront just leaves no place to go.

I hope by using Which? Local to avoid all of this.

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John Creasey - Boiler Installation & Service, Gas & Heating Maintenance

New Malden, Surrey

19-Jan-14 16:11

Originally posted by: Patrice2009 : View

Many small businesses go out of business in this period of financial crisis. If a consumer pays a week before the... Read more »

Originally posted by: John Creasey - Boiler Installation & Service, Gas & Heating Maintenance : View

Hi Patrice - really do understand your concern, but you do have to look also from the point of a small sole trader who is like you trying... Read more »

Originally posted by: Patrice2009 : View

I suppose I'm worried about two types of tradesmen. The first just getting by and existing from one job to another. If I pay a couple of weeks in advance and another customer lets him down that may be enough to end his business. I would then have paid my money without getting the job done. The second type I fear is the botcher. He will demand his money upfront, then start the job and disappear or even worse complete the job to such a poor standard that your house becomes unsaleable. You have paid for a decent job and have been left with an unsafe job that has to be undone to bring you back to pre builder state.

Paying upfront just leaves no place to go.

I hope by using Which? Local to avoid all of this.

Hi Patrice - Hopefully using Which local will give you a little more faith.

Less likely to find the botcher on here.

I cannot deny that there are builders who will disappear with your money, but by the same token, there are rogue consumers out there.

You just have to ask yourself if you would be happy to buy in a few thousand pounds worth of materials, fit them into somebody's house (who you don't know), work for a week or two with no money coming in, and hope to get paid for everything in the end.

Bear in mind that at the end of that job, you are about to start another (which you also have to finance yourself), and may still be waiting for payment on the first job.

Add to that, things like your end of year tax demand etc which you will be penalised for late payment.

You would be surprised at how often clients will take a week or so to settle final invoices. And don't get me started on how long Estate/Letting Agents take to pay for work done..........

It can be a minefield out there, but if you are reading Which Local, you are heading in the right direction.

Good Luck.

John

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