Late payment claims rise by 114%

Rising pressures on cash flow this year have driven more businesses than ever to exercise their right to charge late payment interest (LPI) on bad debt, according to data released by debt recovery law firm Lovetts.

In the second quarter of this year there has been a 114% increase in the number of firms that added LPI on to their debts compared to the same quarter in 2008.

This rise comes as more companies choose to use LPI, and infrequent users are now employing it more vigorously. Furthermore, the actual LPI amounts claimed by businesses have seen a 37% increase year on year.

"While these figures are hugely encouraging, Late Payment Legislation is still not used as much as it could be, nor are businesses recovering the compensation to which they are entitled," said Charles Wilson of Lovetts.

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