My firm has noticed a sharp increase in the number of requests for the debt collection services of my team. One of these cases involves an unpaid invoice from a British company to a Korean wholesaler for over USD 700,000. The British company was duped by a small paid invoice which was quickly followed by an unpaid large invoice.
Of course, the Korean company (not a company –one guy and a personal bank account) was not capitalized and has few assets. The case shall be handled through a criminal filing. The other matters are for mainly low six-figure debts or claims based on faulty or non-delivered goods.
Some of the cases involved nothing more than scams to the less than careful foreign businesses. Others were caused by the squeeze that the liquidity crisis has put on local small businesses.
I have written articles on this in the past. Please conduct a little due diligence prior to engaging in any agreements with anyone that is not your mother. Please see and carefully follow the post below or you face the risk of needing to utilize us for the collection of your Korean debts.
I was a little curious about what caused the increase in the number of debt collection cases over the past few years. The answers by my clients are very revealing when you consider that many American and British buyers and sellers were struggling over the past few years to meet payroll. This led to many of these, normally, careful business people from being pressured by the economic climate to be less careful.
We always advise that it is, normally, better to lose an opportunity than to be not paid for work that you have completed. We often can quickly determine, by a brief company check and a talk with the local company if the deal is a fraud. Korean crooks are often obvious and a phone call from “your Korean law firm” will, often, cause jitters, fears and sometimes even tears.
Also, if the receiving party’s bank account is a company name and also a personal name under or above the company name, be aware that you may be dealing with an individual, not a company. The bank, if it sees one of the correct names as the name on the bank account will, in most cases, not deny the transfer.
- Debt Collection Cases in Korea on the Rise: Buyers and Sellers Beware
- How Foreign Companies and Individuals can Collect Debts from Debtors in South Korea?
- Debt Collection in Korea: Foreign Creditor vs. Bankrupt Korea Debtor
- Garnishing Wages in Korea: Collection of Debts in Korea
- Collecting a Debt in Korea: Payment Orders are your Friends
- Korean Tax Incentives for 2020: Korean Tax Law Updates
- Beware the Grey Market Trap in Korea: Due Diligence, Agreements and Street Smarts
- Finding a Korean Distributor: Top 10 Things to Know Before you Jump into Bed with an Agent in Korea
- The Korean Corporate Restructuring Promotion Act of 2018: Korean Insolvency Law Updates
- Entering into a Joint Venture/Partnership in South Korea?