red flag warning

Red Flag Warnings For Collection Issues

The most common excuse we hear from debtors that do not want to pay a recruitment fee is, “We already knew the candidate.” ...Wilson Cole


After making a successful placement for a client company and submitting your direct-hire or contract invoice you may be faced with the dilemma of a non-payment issue. How can you protect yourself when hearing “we are not going to pay you because…” We spoke with Wilson Cole, President of Adams, Evens & Ross (AER) to gain insight into the strategy to use in this circumstance.

Wilson said the most common excuses client companies give include:

  • We already had their contact information in our system.
  • We already knew the person from somewhere else.

Wilson points out that having a candidate’s contact information is not the same as knowing they are actively looking for a job or are willing to make a professional move. The hiring company could have had the candidate’s name and contact information in their ATS but that does not mean they knew the person was an active candidate seeking professional opportunities. Unless the hiring company can show the hired person was under active consideration, odds are strong that collections can be made.

In the second instance, just knowing the person from somewhere else is insufficient. The debtor must understand that knowing the candidate and knowing they are looking for a job are two very different things. That they were “planning to meet with the person,” or “just happened to go out for drinks,” does not support their contention that they were actively recruiting the candidate.

Samantha Cole Vinsant, General Counsel of AER noted that it is important to remain silent after hearing the red flag words “we’re not going to pay you because” so that the staffing firm does not weaken its position. Don’t offer to hold (but not process) the payment for the candidate or offer a pro-rated amount if the candidate doesn’t work out. Samantha points out that there is a big difference between networking in general and actively recruiting a candidate to become an employee. When the red flag drops the matter should be escalated to collections, assuming the staffing firm actually wants to get paid. Unfortunately, a lot of staffing companies will give up on their claim at this point. In this situation, unless the hiring company can show the hired person was under active consideration, odds are strong that collections can be made on a claim.

The best way to avoid any payment conflict is to have a signed agreement in place before any placements are made, no matter how big or small the client is.

For more information on collection issues contact AER at 800-452-5287 or by email at


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Staff Writer