In a recent new story, it’s been headlines that Middlesbrough council spent £17,000 on private investigators in an attempt to recover debt. Well, when I say headlines I mean the Northern Echo! Even so, it’s a reasonable amount of council cash and its right that people should ask questions, so here are some further facts:
- The £17,000 covers the period from 2010, in other words, around £3,500 a year
- It was spent on 56 investigations, or around £300 per case
- privatedetective.co.uk wasn’t involved in any of this! In other words, we have no axe to grind.
But we do know the kind of cases it was used for – recovery of outstanding debt.
Now we’ve done enough debtor tracing to know that every client weighs these issues very carefully – nobody wants to be out of pocket twice so most of the time private detectives get asked to recover debt only when there is a very high probability that they will be able to do so and that the amount recovered will be sufficient to make the fee worthwhile.
For local councils this can be a real issue; we’ve never been asked to recover debt by a local council unless:
- all other possible routes to debt recovery have failed
- the amount of the outstanding debt makes recovery of the funds a matter of public interest
- it’s clear that attempting debt recovery via private investigation is an attempt to safeguard public finance.
Debt Recovery and Bankruptcy
Debt recovery in other areas can be equally problematic, as is shown by the current case against Michael McIndoe, former footballer, current bankrupt and participant in a High Court case to establish if he engaged in fraud. The claim is that McIndoe took millions from other footballers and businessmen that he said he was investing so they could have up to a 20% return on their investment. One investor is said to have given him 2.5 million pounds with £1 million of it being handed over in cash. In fact McIndoe is alleged to have gambled the money away.
In such cases, it’s very common for private detectives to be hired by those who have an interest in recovering funds, to establish if assets owned by the bankrupt can reasonably be considered to be part of the bankruptcy estate and to try and discover a money trail that will prove that the investment they made was misapplied by the debtor which could lead to a criminal charge and maybe result in payments for damages.