Submitting overdue accounts and claims

You must be able to establish both of the following two facts:

• First, that the debt exists (that is, the customer owes you a specific amount of money)
• Second, that you shipped the goods or provided services to the customer according to the terms of the contract

Proving these points will be easier if you can provide the following documents and/or information:

• A contract or purchase order
• Credit information on the customer (unless the customer was formally approved by us)
• Proof of shipment, such as bills of lading, waybills or written acceptance by the customer
• Evidence of follow-up on slow payment

By keeping the proper documentation, you will have all the information you need to submit a claim if this is ever necessary.

Contracts and purchase orders 
The most effective way to prove that a debt exists is to have a legally binding contract or purchase order. Any changes to the terms or conditions of the contract or purchase order should be in writing.

Remember that, as a party to the contract, you must adhere to your contract obligations. If the goods cannot be delivered as ordered or on time, we suggest that you obtain written agreement from the customer to make partial shipments or a later shipment.

At a minimum, contracts and purchase orders should always:

• Be in writing, signed and dated by both parties
• Identify the full legal names of the seller and the buyer
• Clearly describe the goods or services being sold
• State the price, currency, payment terms and delivery schedule

Other ways of proving a debt exists
Other means of proving a debt include the following:

• The customer has sent a cheque for the full amount owing, but the cheque was returned due to non-sufficient funds.
• You have a signed draft or promissory note from your customer.
• The customer acknowledges the debt in writing and advises that payment will not be sent by the due date.
• The debt is confirmed by a trustee in bankruptcy.

Download our Claims Checklist for easy reference.

Early attention to overdue receivables is financially prudent and has proven to be effective in avoiding losses. Your follow-up will vary depending on the size of the receivable, as follows:

• If the overdue receivable is $100,000 or less 
  
  • Most policies do not require you to report overdue accounts of $100,000 or less and is considered a loss only once an amount has been outstanding for 120 days past the due date. Before submitting your claim, you can request that the account be placed with a collection agency at a preferential rate we have arranged. Refer to the “Claims and Overdues” section of your Coverage Certificate for the details of reporting overdue accounts and to determine the waiting period that applies to each insured event.
• If the overdue receivable is more than $100,000
  • All accounts more than $100,000 that are also more than 60 days past due must be reported to us. Refer to the “Claims and Overdues" section of your Coverage Certificate for the details of reporting overdue accounts under your policy.
    

Reporting an overdue 
Reporting an overdue can be done online using our credit insurance platform. We will then contact you to discuss loss mitigation options. You are also encouraged to contact us at any time to discuss additional courses of action. These options will vary depending on your customer’s country and industry, and may include:

• Sending a collection letter on the insurer's letterhead
• Engaging legal counsel
• Establishing a repayment schedule with the customer

Collection agencies and services 
As a loss mitigation measure, we suggest you consider placing overdue accounts with a collection agency. Using the services of a collection agency can be an efficient and cost-effective way to collect debts, particularly for smaller amounts.

To take advantage of the preferential rates we have arranged with various collection agencies, you can request this service online when reporting an overdue or when submitting a claim. The collection agency will deal directly with you while providing us with regular updates. The agencies work on a “no collection, no fee” basis and all amounts recovered (less the collection agency’s fee) will be forwarded directly to you until EDC pays a claim. If you have placed an account with a collection agency yourself, you will be asked to provide the collection details when you submit your claim.

Problem accounts
Problem accounts are those that are not yet due but may, based on information you have acquired, result in a loss. This information could be first-hand or from other sources—for example, hearing that the company is having financial troubles or that other suppliers have not been paid.

In these situations, you may wish to contact the company directly to discuss your concerns. You may also contact a claims and recoveries representative or your underwriter to discuss an appropriate course of action.

Bankrupt or insolvent customers
Typically, claims are admissible when a covered loss has occurred and the debt has remained unpaid for 120 days from the due date. One important exception is when a customer has been placed into receivership or has been declared bankrupt. In this case, a claim is admissible immediately.

Export Development Canada (EDC) has shortened the claim waiting period for all Portfolio Credit Insurance (PCI) policies (export and domestic) to 60 days from 120 days.

Going forward

• The Claims and Recoveries department will apply this change immediately (by applying the revised waiting period of applicable claims).
• At renewal, PCI policies will be updated with the new policy parameters (starting in March 2022).
• To ensure that you have the same amount of time to submit a claim, the “latest date to submit a claim” parameter will be increased to 210 days from 150. 

Questions? Email debtmanagement@edc.ca

Export Development Canada (EDC) has agreements with collection agencies to assist and expedite pre- and post-claim collections.  To ensure worldwide coverage we are using the following collection agencies:

• Collection Group of Canada (Canadian buyers)
• Receivables Control Corporation (U.S. buyers)
• International Advisors Group (any buyers outside Canada and the U.S.)

What’s changed? Demand letters for amounts owing <$100,000 will be a free service for all EDC Portfolio Credit Insurance (PCI) and Select Credit Insurance (SCI) customers. Upon request, the collection agency will send an EDC demand letter on your behalf. If you haven’t received a response from the buyer within 14 days, you’ll have the option to pursue collection, but may be responsible for any contingency-based fees from the collection agency.  

To request a demand letter, send an email to Debt Management with the following information:

• Your company’s name
• Currency and amount owed
• Your buyer’s name and all contact information (including email address and country)
• Your wire instructions (where you want the funds sent)

Once the details are received, we’ll forward the request to the appropriate collection agency.

What if I already work with a collection agency?

You can continue to use any collection agency you prefer. However, after a claim is approved, EDC will work with our partner agencies to collect the debt.

Questions? Email debtmanagement@edc.ca