The Analysis News & Opinions
Factoring warning on GDPR contracts
Creditors in the factoring sector must be certain over their data permissions in the age of GDPR. Speaking at a round-table debate run by
CCRMagazine, in association with Else Solicitors, Perry Burns, director of Working Capital Partners, said: “We have been very concerned about this as, in the factoring industry, we have a client, with whom we have a relationship and we can manage our GDPR issues, but then they have a customer, and the question is whether we are entitled to hold that customer’s data, because we do not have a direct relationship with them. This has been exercising the industry and I do not think that we have a definite answer as yet. However, when GDPR first raised its head, we spoke to the ICO and, I have to say, they were extremely sympathetic and commercial, and insisted that GDPR is not there to stop business, rather it is there to stop the abuse of data. “If you have a legitimate interest, or are
retaining records to prevent actual or attempted crime, then you have every right to hold that data, and GDPR should never be used as an excuse not to carry out due diligence, or run your accounts properly.” Nick Woods, export credit control manager
at Marston Book Services, agreed: “It is an interesting point about factoring, because technically that is what we are doing – we distribute for 80 publishers and, for Orca, about 40. We do the invoicing on their behalf, and we collect the money. So we need to have access to much of their information through the exchange of files, so there is a constant interaction and changing circumstances. If they have, for example, a customer selling on consignment, then we need their sales reports so that we can process the invoices. Chris Else, partner at Else Solicitors,
added: “There is also a contractual nexus, so that if it is a factoring situation, then there is an agreement between your customer and you, and it is clear that is what is going on. It follows that there is a contractual right to pursue a claim, so there is an exemption in
April 2018 Opinion
Time to deliver on Brexit transition period
We welcome hearing the prime minister Theresa May saying, in her speech on the UK’s future relationship with the European Union (EU) at Mansion House last month, that the government is doing what it can to encourage more small businesses to export, not just to the EU, but also around the world. To make Brexit a success, small firms must be at the heart of negotiations on the future economic partnership. We welcomed her commitment to ensuring
that case. You can also tie things up in your terms and conditions, because, if you they have a customer with terms and conditions of payment, and so on, then that is a legitimate business interest, and the factoring company has a contract with the company. Then again, there is a legitimate business interest, there is no GDPR issue with that. The only issue would be that, if the account is closed, you should not really store the information longer than is necessary. You do have a right to hold on to the information if you feel that there is a risk of a crime or of breach of contract. Meanwhile, Mr Burns added customer
attitudes to debt from the consumer sector were starting to be seen in the commercial world. “In the consumer-credit world, of course, if a customer says that they have a problem, then the lender might freeze the interest, give time to pay and a payment plan; they bend over backwards,” he said. “I think it is part of that, which then leaks
across into the commercial sector because individuals say ‘if I can be treated like that in my personal life, why should my suppliers, in my professional life, not treat me in the same way?’ I think they make an extension that is not justifiable, but that is what they do. You find this attitude in several areas. “I have clients, who have clients who
complain that they cannot deliver the same day, so where do they get the ideas that this is even possible? They get it from Amazon. I can know I can put something on Amazon Prime right now and it will be waiting for me in the office when I get back!”
www.CCRMagazine.com
trade is low cost and “as frictionless as possible and with no hard border” in Ireland. The prime minister set out five pillars that
guide her in the negotiations. In response, there are five key questions small businesses need answered. The most pressing question is when will
an agreement on the terms of the transition period be reached? This is vital to allow trade, access to labour and skills to continue on current terms while new trade arrangements are finalised. Secondly, with the government’s call to
boost free trade, will small firms maintain as frictionless trade as possible with the EU27, whilst also benefiting from reaching out to new global growth markets? We cannot have a situation where small businesses are weighed down by additional burdensome paperwork, queues, and costs. Third, will small firms be able to have
easy and cost-effective access to the skills and talent they need to grow and innovate? Fourth, will small businesses and the self-
employed be able to easily travel across all the EU 27 member states, to win new contracts and do their day-to-day work? Finally, when powers are returned from
Europe, will government prioritise the needs of small businesses across all nations of the UK, and remove unnecessary barriers to growth?
Mike Cherry National chairman, the Federation of Small Businesses
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