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  1. #1
    SitePoint Zealot jrickards's Avatar
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    List of Bad Customers

    A friend (a plumber) contacted me the other day to see if I could create a web database for the plumbers in town. Technically, this is a rather simple job but the legal ramifications have me a bit worried although there is a call out right now to a lawyer to try to clarify this.

    The plumbers in town are getting more and more upset by customers that don't pay (either some or all of the bill). Some of these customers make a habit of not paying a bill and then moving on to another plumber when they need service and not pay that one (and so on). I am sure that this issue is not restricted to just plumbing services, electrical and others may also be affected, perhaps by the same bad customers.

    My friend's wife, who runs the business side, keeps a list of these bad customers that they encounter and in conversation with other plumbers in town, they all like the idea of a list of bad customers: until they have been stiffed, they don't know the payment habit of the customer.

    From a web site point of view, this would simply be a password protected list so that part of the design/development would be pretty basic.

    Any thoughts?

  2. #2
    ☆★☆★ silver trophy vgarcia's Avatar
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    That sounds like collusion to me.

  3. #3
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    I'm no laywer, but I don't think that would be considered collusion. So long as the the database of non-payers was made equally available to all plumbers, there wouldn't be any kind of monopolization of information or market access. There also wouldn't be any price-fixing etc.

    There could be a legal concern, however, because the database owner is assuming some liability for the information, even if it's submitted by others. Dessimating information that could negatively impact the business interests of others can get tricky - such as if a restaurant had to close early because they couldn't get a plumber due to being on the list.

    I would check this one with an attorney, for sure..
    The fewer our wants, the nearer we resemble the gods. Socrates

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  4. #4
    SitePoint Zealot jrickards's Avatar
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    It may be that the Wikipedia definition of collusion focussed on price-fixing because that may be the most common application of collusion or that it was an easy example to follow but as Sagewing has stated, price-fixing is not the intended agenda and therefore, it might not be considered collusion. Again, as Sagewing has so <em>sagely</em> indicated, whether or not it is collusion, it may be illegal or verging into that territory. A lawyer is being consulted but it may be a few days before we hear the verdict.

  5. #5
    busy Steelsun's Avatar
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    The biggest concern to me would be creating a "blacklist" like that is considered a covered service by the FCRA as a credit reporting agency. The people maintaining the database would be subject to the same laws, rules, and problems that credit reporting agencies have.
    Also with no possibility of disputing and awareness from the consumers point would make it illegal.

    Just my 2 cents from experience and I am not a lawyer.

    But in general "Blacklists" of this type have been upheld by the court as illegal if they don't have all kinds of stringent conditions in place. Like any person placed in the list/DB would have to be contacted by the reporting party and informed of the fact with rights to dispute it.

    It'll probably cost $10-20K in lawyer fees to get set up right.
    Brian Poirier
    SunStockPhoto: Stock Photos, Fine Art Photos, Event Photography

  6. #6
    _ silver trophy ses5909's Avatar
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    Interesting thread. I know you can go to your local mom & pop store and they have rturned checks in plain view of everyone with a sign saying: "Don't take money from these people. They bounce checks!" and it seems they can get away with it. I've seen it for years.
    Sara

  7. #7
    SitePoint Wizard samsm's Avatar
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    Would this site serve a Canadian audience?
    Using your unpaid time to add free content to SitePoint Pty Ltd's portfolio?

  8. #8
    SitePoint Zealot jrickards's Avatar
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    Yes, this is intended for a Canadian audience but more specifically, just the local "bad customers", not Canada-wide or even Ontario-wide.

    Although no one participating in this discussion seems to be a lawyer, it would nevertheless appear that there are enough reasons why this project should not be done. Although furthering this discussion would move away from web design/development per se, has anyone had a similar experience with their clients? If you heard from another web agency in your area that Mr. X stiffed them and an agency before them, would you take them on? What avenues might you pursue to ensure that you get paid?

  9. #9
    ☆★☆★ silver trophy vgarcia's Avatar
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    Quote Originally Posted by ses5909
    Interesting thread. I know you can go to your local mom & pop store and they have rturned checks in plain view of everyone with a sign saying: "Don't take money from these people. They bounce checks!" and it seems they can get away with it. I've seen it for years.
    But you don't see the same list of people at every store in town, which is the issue here.

  10. #10
    SitePoint Guru hifigrafix's Avatar
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    wow.. I had exactly this same idea but for designers in my town. I wouldn't even take the first step before sitting in with a lawyer and the site-owner on this one. It's a good idea and I think plumbers would be glad to pay a subscription fee for this one.

  11. #11
    Non-Member demosfen's Avatar
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    So is any professional association/union for benefit of industry considered collusion? Say, American Medical Association (can't think of a better example at the moment). If this is the case, then apparently not all forms of collusion are illegal

  12. #12
    SitePoint Wizard samsm's Avatar
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    Quote Originally Posted by vgarcia
    But you don't see the same list of people at every store in town, which is the issue here.
    I thought the issue was more that the list was private.

    If you are telling the truth, you could take out an ad in the New York Times shaming a deadbeat customer, what would be legally wrong with that?

    Of course, I would think that after four or five plumbers hand their bills over to debt collectors, the deadbeats involved will be suitably hounded and get their comeuppance.
    Using your unpaid time to add free content to SitePoint Pty Ltd's portfolio?

  13. #13
    SitePoint Zealot jrickards's Avatar
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    Quote Originally Posted by samsm
    Of course, I would think that after four or five plumbers hand their bills over to debt collectors, the deadbeats involved will be suitably hounded and get their comeuppance.
    Therein may lie the solution: if there was an association to which they all belonged, perhaps the association, on behalf of the stiffed members (hmmm, that could be misconstrued) could approach the customer with a collection of bills or take the customer to small claims court (although it is possible that the total may exceed the limit that small claims court allows).

  14. #14
    SitePoint Wizard silver trophy
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    The credit card companies keep lists of people who do chargebacks. If you've done a chargeback at one company, and try to order from another that uses the same list they won't take your credit card. If that's not collusion, I don't see how this could be.

    However, I do see a lot of gray legal areas here, and IANAL. Definitely talk to one before proceeding. Don't rely on their lawyer either... they will only be looking out for their client. You need to hire your own.

    Also, why don't they just employ some kind of credit checking/reporting function to these people? There are legal processes in place to help avoid and solve these types of problems, including small claims court which can both blemish someone's credit and garnish their wages if you win the suit. As long as the plumbers had signed work orders they would have no problem pursuing the matter legally.

    I understand why they want a list of deadbeat clients, but in all honesty I don't know how much I would trust such a list. What if one plumber put someone on the list because they took a while to pay - but they paid. What if someone was unhappy with the service they received from a plumber and refused to pay - and was put on the list? There is a question of checks and balances to a list such as this that makes me wonder if it would be truly effective even if it was legal to put into use.

  15. #15
    SitePoint Zealot jrickards's Avatar
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    Excellent points, many thanks.

    By the way, what is IANAL?

  16. #16
    SitePoint Wizard silver trophy
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    Quote Originally Posted by jrickards
    Excellent points, many thanks.

    By the way, what is IANAL?
    I Am Not A Lawyer

  17. #17
    SitePoint Addict smittenbite's Avatar
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    wouldnt it only be illegal if everyone who had access to the list had an agreement not to take any business orders from the bad customers? if not then i dont think this would be any different from sharing and looking at reviews of products, it could be like looking at 'reviews' of customers , if that makes any sense
    nothing.

  18. #18
    SitePoint Evangelist Unit7285's Avatar
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    Quote Originally Posted by beley
    What if one plumber put someone on the list because they took a while to pay - but they paid. What if someone was unhappy with the service they received from a plumber and refused to pay - and was put on the list? There is a question of checks and balances to a list such as this that makes me wonder if it would be truly effective even if it was legal to put into use.
    Or what if a plumber put his biggest and best customers (who pay with no problems) on the list so others will not try to approach them?

    Rather less likely, I agree, but I see so many paranoid conspiracy theories in SitePoint threads now that it's starting to affect me.

    Paul

  19. #19
    Life is short. Be happy today! silver trophybronze trophy Sagewing's Avatar
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    Quote Originally Posted by Unit7285
    ...but I see so many paranoid conspiracy theories in SitePoint threads now that it's starting to affect me.
    I'm glad I'm not the only one who notices it. I have never seen so much talk about 'getting screwed by clients', non-payers, and of course legal actions over things that haven't happened yet.
    The fewer our wants, the nearer we resemble the gods. Socrates

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