How to get money from reluctant client?

Question

I completed this website 4 months ago. (I would like to keep the website anonymous - if this post comes up on google search for his customers, it will have a negative impact on his business). We did several iterations, he was very demanding (and nosy), I complied with every single thing he wanted, including the font-size of the footer which destroyed the aesthetic looks by quite a bit. (and he messed with the colors too, making it look dangerously childish and unprofessional)

Anyway, he was very friendly during he whole process. After getting all the requirements I accepted to build the website for £950 and I charged him £150 in advance so he wouldn't want to bail out after I started the work. The requirements kept changing quite a lot, I made adjustments as and completed the website just 5 days late, w.r.t. the agreed date, in-spite all the changes in requirements.

That was four months ago. He has never returned my calls nor replied to my emails since then. How do I get the money back from him? I really need some advice on this, this is the second time someone has not payed me.

Points to be noted:

1) We did not sign any contract - he was a friend of a friend.
2) I still hold the passwords for ftp, cpanel and everything. I don't want to bring the site down. somehow it doesn't seem ethical to me.
3) I posted this on stackoverflow and it was closed, I was redirected here.

EDIT
Thank you everyone, for your enormous support. I thought I should include some more details: He is hosting the site. as in, I made him register and use his own debit card to buy the domain name, webspace and everything, I just have the passwords for his cpanel, and ftp (well, I have access to cpanel that pretty much gives me access to many things)

Now, if I give him a warning, he might change the password to cpanel, but I am fairly sure he doesn't know about ftp's.

UPDATE
I followed Anna Lear's advice and sent him the final invoice, on Saturday, with a warning that I will take the site down if he doesn't respond to my email before this Tuesday. He hasn't replied to my emails yet, but I will let you know how this goes. Thanks much for your support. I plan to put up a holding page as Darknight suggested after Tuesday.

Points
I dont have a server space of my own, however I have few web spaces of my clients but I dont want to use them for these kind of purpose.

RESULTS
After my follow up of final invoice and warning, the client refused to anything. workman's advice seemed to be the most sensible to me. I mirrored the site to my own webspace, logged into his CPanel and forwarded the website to my site. Once that was done, I put up a holding page on my site so anyone going to the website would see a holdup page (nothing fishy, just an Under Construction page). Of course, this was all very weak in the sense that if my client knew about CPanel he could just remove the redirection. But, I had this second chance to get back to him and I was relying on him not knowing anything.

Two hours later, I got a call from the said client, (and he was acting as if he did not get any of my voice mails or emails) and asked me to get the site back up. I, of-course, said I had to be paid and two days after that he made a bank transfer. His site's back up and running now.

Just wanted to say thank you all very much, I was very desperate when I had started this question. You guys are the best, not only you told me to learn the lesson (which I did) you also gave me a very very good solution that seemed to be very ethical (almost) to me.

A BIG thank you to workman!

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_{If I could choose more than once answer, I would have chosen Anna Lear too, but since I followed workman's advice I had to pick that up. People who made a point about not taking the site down without consulting a lawyer, thanks a lot.}

Answer 1

This is what I would do.

Mirror the site.

Any ability to take down the site may be hindered by the fact that you no longer host the site, so let's put it back into your complete control. So set up another account with the same domain as your client and have the domain forwarded from his Cpanel to your mirrored site. Once you've successfully forwarded web traffic to the mirrored site, remove ALL your content from his hosting platform. (Don't transfer the domain, as it may interupt email communications, just forward.) He won't be able to tell the difference from the frontend, but you will have complete control of the site and be able to carry out your shut down.
( Just noticed @Sam mentioned this option as well, it's a good way to put the ball back in your court )

Apply Pressure, but be flexible

@Walter Suggested the two best non-legal routes prior to an all out take down. Talk to your friend about the situation. Offer a payment plan for him to pay you back over a time period. If he resists or fails to pay in a reasonable amount of time (at this point) then...

Go Rambo in Court

Last resort, legal route. Starting with small claims @DanRay provides this step. Basically present your case and be sure to use email correspondence in your case. Off the premise that he does not own the materials that you provided and that he's using them, you'll be able to make the case that you've incurred damages as a result of non payment. You can claim that the site was not intended to be released until you were compensated and that the current site is not a legitimate use of your work.

I would always suggest having a lawyer present the case (even in small claims). Don't waste time trying to win and just win it. You've got a case, even without a contract. Make it clear to your representation that you intend to make it You're getting bullied, make it his loss.

Future Prospects

For the future, contracts are fantastic -- but understandably awkward for 'friend' contacts. Good call on letting him have his own hosting platform, but do the development on your hosting and push it to your client's platform when you're done (and paid) and not a moment sooner ;]

GOOD LUCK!

Answer 2

Take it down ¹

It's your work and it's unpaid. What happens if you take a car off the lot and fail to pay? They take it back. Better do it now while you can then regret it later. Why would it not be ethical to take back something that is yours?

Hopefully a down site will motivate them to pay you. Otherwise you are in a bit of a bind. No matter who you work for get a contract or something in writing. Friends, family, the only exclusion would be your mother because honestly you probably won't be charging her anyways.

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I'm opposed to warning him only because that will prompt him to remove your access, and prevent you from taking any action. What good is the warning if you can't follow through?

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^{1: Please be aware of the possible legal consequences that may present themselves in following this course of action. This information is provided "as-is". The author cannot not be held liable for the results of following any part of the above stated recommendation. By reading this you are affixing an assumed electronic signature that you agree to all terms, as stated, without reservation. If any part of this agreement is found unlawful, I don't really care. Just adding fine print for fine prints sake.}

Answer 3

Send a final invoice with a cover letter threatening to initiate action in small claims court (or the English equivalent).

A little googling later, there IS an English equivalent: http://blogs.mirror.co.uk/investigations/howto/sue-small-claims-court.html

Note that you probably don't even have to DO the court claim. Hopefully just the threat will show him you mean business.

Answer 4

Send him a final invoice with a note that you will be shutting down the site on such and such date/time until payment is made. That should get his attention.

I agree that shutting it down out of the blue would be a bit unethical (no matter how obvious it may be to us that he should pay up), but with a clear warning, all bets are off.

Beyond that... I don't think there's much you can do without a contract.

As for advice on preventing this kind of thing in the future, always sign a contract. It's not optional. Sign a contract and take them to court for non-payment if that's what it takes.

Answer 5

Either you consult with a lawyer, who will tell you what you can and should do, or you just write it off. IMO there is no middle ground.

Answer 6

You don't have a lot you can do. In the US most districts have "small-claims" courts where you can represent yourself so you could try legal action but be prepared to invest a lot of time into and still lose. Verbal contracts are enforceable but not always practical, which leads to your most likely solution: Write it off.

Next time, use an escrow service that includes arbitration provisions. A written contract by itself won't be of much help if the amount of money is too little to justify taking it to court but you should still use one.

ETA: I already commented on this but I would absolutely NOT take the site down without speaking to a lawyer. While you do have an implicit contract it is not clear that you own the site or can repossess the code except by going through the courts.

Answer 7

There are a couple of non-legal paths you can take.

You mentioned that your client is a friend of a friend. You could start there. Tell your mutual friend about the situation. Perhaps they can get in contact with your client and apply some pressure.

And excluding some sort of legal action your last resort is taking down the site. Send your client another email asking for a response and that if you don't hear from him by X date that the site will be taken down. My guess is that you will hear from him after that.

Answer 8

Before I get in to anything else or in details, I will start by saying - DO NOT PULL THE SITE, but if possible, encrypt / obfuscate / similar to the original source code. If you have the ability to, but this is risky, put in a fail safe / on application start that simply looks for a web service / xml feed or whatever is quickest in webspace that you control and make it that if this feed is not found and / or a "special" code is returned, the application fails to start.

If they specifically said they want a site that does xxx - but do not actually mention source code or the ability to extend in the future without you, technically there is nothing forcing you to give the source code as long as the site lives up and does what was originally agreed upon.

There was a verbal contract to provide a service (Website Creation) in return for payment (£950).

If you were late or not by a few days, that does not really matter unless it was part of the original contract e.g. penalty clause. "I will not pay you / I will give you a reduced rate if you finish by xx/xx/2010".

Remember that a contract has two sides Pulling the content may mean you are £150 up, but it would also mean breaking your side of the contract for supplying the service - even if he has not lived up to his side of paying for it.

(This is unless either of you discussed any sort of cancellation agreement in advance... Remember)

Also, pulling content will mean very risky ground, I guarantee that any legal body (lawyer, judge, arbiter etc.) will not look favourably at you and it may affect getting any money in the future.

What I have said here is to protect you, if you were to pull the content, you should not get in to any further trouble, but it certainly would not advance your case anywhere. At worst, he may try to sue you (for either money or an action of restoring the site) - in which case you can issue a counter claim for the amount owed.... but again, any legal body will probably think you are being petty for taking it down.

I don't mean to be rude, but in the future, have a contract - it does not need to be legally written or have technical terms, it can be on a napkin - just make sure you write in plain English - I <their name / company> agree to pay <your name/company> for a website. All content of the website remains <your name/company>'s property until it is paid in full.

People always try to write cancellation clauses, extra stuff that just confuses matters - just remember, a contract is for products/services, and you don't have to have a cancellation clause or anything complicated (when B2B).

At this point, there may be a perfectly reasonable explanation for what is happening - ask your friend, or try going around/asking this person. If it fails, send one recorded letter (about 50p) stating - I have tried to contact you many times for the money owed on completion of the website. Please pay either cash, cheque or money transfer **within** one week of receipt of this letter and contact immediately upon doing it, otherwise I will have no choice other than to proceed with legal action.

Again, remember, there is no sort of clause that protects you from non payment, therefore if you delete the site, you are also in breach of contract and a few judges may just throw it out as a deal that went wrong for both sides.

If he does not respond to the letter, you have to follow it up. As long as you have a bit of history - emails, phone records (if not full recordings), your friend, etc, take him to court. It is not complicated or scary - you can do it yourself. The website is www.moneyclaim.gov.uk (Money Claim Online (MCOL)), it is part of Her Majesty's Courts Service (HMCS) and they will set the claim up, forward it to your local court and everything. - It does cost, but it is not a lot.

I have only used the service twice, one time the person just ignored me - it was only over something costing £50 and I got a default judgement against him - he never paid so in total I was £80 out of pocket (£30 fee), but I never chased it up as bailiffs would of cost a lot more. The next was a lying, dishonest company (would say a lot more and wondering if I should hyperlink to their website!) that basically took £1468.75 from me and refused to provide me with the product I bought (Opposite to you!) I am an email hoarded and was able to produce messages going back 5 years previous to the date but they kept refusing to either give the product or pay up. The even filed a counter claim against me, but then I sent one last email stating my point and the day before documents had to be filled for trial, they paid out every penny including my legal fees (around £300)

Again, contract for supply of product/services in return for money - I lived up to my point, they didn't... if they provided the service the contract would of been completed, if they returned the money, officially they are still in breach - I could of got compensation, but I really just wanted it to be over with.

When it all comes to an end - do not mess around with their site, it will just make you look petty - you are safe in the knowledge that you have a "kill switch", but right now they will have a site that does what they wanted, but can not be improved / changed without you (If you followed my advise).

P.S. As you can guess, I am in England as well - I have access to a few excellent legal resources through my business, if you want to talk to a lawyer, email me and I will happily send you the details of someone who will be willing to talk to you/give you advise for free.

Written a lot here and taken longer than I thought it would! I have edited it over and over again - if any spelling/grammar or flow problems, feel free to edit.

Answer 9

Speak with your solicitor about this, as soon as you possibly can. £800 is a bit too much money to let it slide. (The FIRST thing your solicitor will say will likely be "Next time, put it in writing.")

Speak with your tax advisors, and make certain that you are not liable for taxes on the full £950, even though it has not been paid.

Someone else suggested talking with your mutual friend. I second this advice. If they attend the same church (yes, it is a long shot), you might consider speaking with the pastor of the church, and asking him to speak with the two of them.

If the hosting company is run by friends of yours, you MIGHT be able to get some traction by talking with them about the issue. Officially, they won't be able to do anything, since he is paying them, not you, but they MIGHT be able to put some pressure on him.

If there is a formal or informal professional association of web designers in your area, by all means put the word out about him. Sooner or later, he's going to need a modification to the site. You of course are going to refuse to touch it, until he pays you the disputed amount, and then you will negotiate a written contract. It would really help if everyone else he contacts says "I heard from Miss Understood about her problem with you, and, under the circumstances, I'm sure you will understand that I have to insist on a written, enforceable contract" or, better yet, "I heard from Miss Understood about her problem with you, and, under the circumstances, I'm sure you will understand when I suggest you go see her for maintenance."

Answer 10

You mentioned "After getting all the requirements I accepted to build the website for £950 ". Did you exchange requirements discussions and the number 950 in EMails? Do you have Emails of the constant changing requirements requests? In absence of a contract, I think (please check with a lawyer) these represent an agreement to do the work from both sides, since the client can not deny asking you to do the work. If you can reproduce the ongoing "negotiation" of requirements and delivery through an EMail trail, a lawyer might be able to prove intent. I realize the lawyer may cost more than the payment, but this may be your only foundation for the case.

I would agree with the other posters recommending against shutting down the site. While you have some rights to the software, that doesn't give you the right to directly access his site/servers (since he pays the bill for them) to get your software back. This would be similar to someone stealing something from me and then I break into their house to get it back.

Answer 11

You could send notice of pending legal action. If that doesn't make him pay, you would have to follow through and hire a lawyer. You could try debt collection or putting a lien on his business as well, but those might be difficult absent a contract.

If your friend was unable to appeal to him, they might know members of his family that you could contact to see if they could persuade him to pay.

To prevent this from happening again in the future, I'd suggest the following:

1. Always use a contract, even for close friends or family members.
2. Require a deposit (usually 50% up front).
3. Set the finished website up on your test server so that they can use it live and suggest any changes. Once they approve of everything, send them a final invoice. Once the remainder of the money has been received, transfer everything to their server.

Answer 12

I would suggest that you leave it alone - totally. No support whatsoever. Software has this strange tendency to require something called maintenance and support. The day will come, sooner or later. When he comes back - and he will - then you have some more leverage.

Answer 13

You're hosting his site - doesn't this incur some sort of continuing cost to you?

That said - I think you need to issue him a final invoice and, if he does not pay, turn the site off.

Past that, if you cannot get in contact with the customer, you should find a good laywer and talk about your legal options.

EDIT: Given that he's paying for the hosting, my answer becomes send him a final invoice. If he doesn't pay it, go talk to a good lawyer about your legal options. Discuss whether or not you can take the site down, should he not pay.

Answer 14

somehow it doesnt seem ethical to me

Neither is not paying you, or answering your calls.

I'm amazed you have waited this long. I kick up a fuss if my client doesn't pay me within one month - and I'm on a long term contract.

Answer 15

Miss Understood, if i were you i would hold something behind your hand.

Since he has appeared to be such a louzy, verbal contract breaker, and much more than that, such an un-ethically abusive client who raises the demands ( changes the verbal contracts ) while lowers the payment, there is unfortunately no reason to think he will quickly become a very honest person overnight.

So, here is what to do:

 1. dont care the empty webspace, anybody
    can host that empty space.

 2. pull everything YOU have designed to another
    webspace and redirect his webspace
    in full secrecy towards your own
    webspace (if you have the webspace
    for this, would be great)

 3. THEN send a warning signal and give him a term to fulfil the
    payment, or else you will rais the
    charges for the raised requirements.

The world is filled with such kind people like yourself Miss Understood. Such a pity louzy clients abused the kindness. They don't deserve the title client. He is not a client, just a clouzy. they are two different kinds, and you should deal with them differently.

Leave your kindness for good clients, who not only appreaciate your vision, but also will never abuse them. I have seen such things so many times i can spot such case right from the start nowadays and dont fall into the old traps anymore. Furthermore i would advise AGAINST any kinds of lawers you have to hire, those advising you have never done it i guesse. Most of them just want your money and you will end up paying them, after that person has payed you, no way that can be called EVEN.

Above all this, i hope you have not lost your creative passion and will move on after this somewhat-bitter experience, knowing that the world is filled with good, honest people, and navigate your sensors from now on more strongly towards them. Cheers, Sam

Answer 16

Many laywers offer free consultations, where they will explain what you will expect to pay and what you might be able to gain. Google "Intellectual Property Lawyer" and ask until you find one who will give you a free consultation.

Answer 17

Miss Understood, I would call this "school money". Leave the site as is. Next time you undertake this kind of project, ask for half now half later. At least this will allow for a smaller loss in future. By doing the ethical thing and moving on, you will keep your side clean. Your client will not be able to knock on your door next time he needs something, the world has a strange way of correcting itself. He will have to face that some day.

Answer 18

One thing to consider asking a lawyer is if there's any potential legal liability for the hosting company. You can always complain about your client to the hosting company, but they're very unlikely to do anything unless there's potential liability. At least in the US, some companies are liability-averse. In the UK, I don't know. There isn't a DMCA takedown notice you can send them, and I don't know if there's a credible threat.

Answer 19

Learn from your lesson and sign a contract!

Contracts are great. They put everyone on the same page and cover all the nitty gritty details that "feeling someone out" can't.

My contracts include provisions for the following things that may be helpful in your case:

Ownership: This specifies that until the client pays for the site in full as indicated on the final invoice, I own the code. Having a signed document for this leaves you with the power to pull the site and the client with little power to pursue you for damages.

Payment: I spell it out in the contract that the price quoted is not always the final price. Changes in scope add to the billed hours, and this will be reflected on the final invoice. Payments are due in 30 days of contract signing and every month late the client pays incurs a %5 of balance fee plus $50 (charging for the time it takes to send emails an deal with nasty clients who don't want to pay).

Liability: If the client does decide to hire a lawyer when you pull the site the contract stipulates that any legal action surrounding the transaction will be limited to the price of the contract. Essentially you will never have to give a client who sues you more money than they have paid you.

Do some research on contracts and don't ever start a project without one.

Good luck!

Answer 20

Miss Understood, this isn't really an answer to your question, but some advice for the future.

You may have just paid £800 for a course in dishonest business practices. It's cheaper than it might have been, and it's up to you to make the most of that fee.

We all "know" that if we go into business, we might run into dishonest people. But if you're like me, you don't take it seriously until it happens to you.

Even when you're on guard, there are many ways for people to be dishonest, and many dishonest people are very good at seeming honest. So you may get "taken" several times in the course of a career. I certainly have - since I began freelance programming in 1990, I can total up $40,000 in direct cash losses due to dishonest clients, $5,000 paid to a subcontractor who didn't deliver, thousands more I only received due to legal arm-twisting, and a $400,000 contract lost because a multi-billion dollar company gave my proposal to a competitor to undercut.

Here are a few things I've learned from all this:

• Always have a contract. Honest clients don't mind them, and dishonest ones need them. Especially the ones blather about "handshake deals".
• If the client provides a contract, and you don't like it, demand changes. If you can't get a contract that suits you, don't do the project. Remarks about "standard contracts we have to use" are just hot air.
• Get everything important in writing. Summarize verbal conversations in a confirming email. If you have to go to court, it's really useful. People who might be inclined toward dishonesty are often aware of that, so it can prevent problems.
• Always have a way out, and be willing to use it. The first rule of business deals is: the person who can afford to walk away from the table first wins.
• Structure your payments so that you don't deliver final work until all your costs have been covered. That way, if they take your work and stiff you on the final payment, it's just profit and you haven't lost money.
• As soon as there's a payment problem, stop work and don't deliver anything.
• If your customer is a pain, sack them. Life is short, stress and worry suck, and there are other customers out there.

I've quit doing fixed-price projects because they're too prone to problems. Many clients who want fixed-price also want free changes, and I hate arguing about that. Even if the client is great, it's far too easy to underestimate a project and lose money. My income and profitability have skyrocketed since I went to hourly-only work.

My final advice is, don't be afraid to publicize the fact that your client stiffed you. If you can back it up with evidence, it's wonderful leverage. Why should you worry about damaging the business of some scumbag who stole from you?

I just went through that myself. I'm doing a programming project through an agency that started talking about paying me late. I sent them a stiff email this morning, and was just talking to my wife about calling the principal and telling them I was stopping work, when the agency said I'd have a wire transfer in a few days.

Answer 21

Don't do anything.

Just let it slide, and learn the lesson.

Also, don't let your personal feelings of fairness get in the way.

Answer 22

Put up a holding page.

and remove the content, until he pays you.

And I would do this fast, because if he is smart, he may simply move the hosting else were.

Answer 23

DO NOT TAKE DOWN THE SITE

Not if he's paying for the hosting and its under his name. That might be construed as illegal access or hacking - resulting in the possibility of YOU facing criminal charges.

You sent a final invoice. If he doesnt pay, take him to small claims court (or your country's equivalent).

These things happen... next time require payment upon delivery and have a written contract.

Answer 24

I think a call to an attorney may be premature. You may want to consult with a collection agency.

They may not be able to help you with your current case, unless you have documentary evidence to support your claim (invoices and account statements may work for some agencies; signed contracts plus invoice history may be required for others). However, even if you can't find one who will help you with this one, they'll probably tell you what kind of documentation you'd need to engage them for future projects, should that ever become necessary again.

If you do engage a collection agency, they'll probably take a cut of whatever they recover; some will simply purchase the debt at a (substantial) discount. Some of them simply add a fee that they bill to the recipient, and they may even recover interest charges. Most likely they will be meaner than you, and they'll probably be more persistent than you if they do take on the case. They're likely to be as effective as an attorney, and the cost burden will be pretty clear to you up front, whereas an attorney is more likely to bill as many hours as it takes until you give up.