By Dan Berthiaume
When it comes to disputes between call center outsourcing providers based in India and the Philippines and their US, UK, Canadian, and Australian clients, there is basically one root cause. “The biggest, and really the only, dispute is regarding payment,” says Bhagesh Nair, proprietor at Plan B Enterprise Consultants, a Mumbai-based firm specializing in offshore call center services. “Even if everything is place, once the work is done, sometimes call centers don’t get paid. As a result, the consultant who referred the call center to the client may get badmouthed in the market.”
No NDA, No Pay
According to Nair, the failure of call centers to produce a signed non-disclosure agreement (NDA) is a major reason for non-payment. “The client may tell the call center they are not in a position to pay due to the lack of a signed NDA,” he says. “And if quality parameters are not met, the client may refuse to pay.”
While these types of disputes may provide a legitimate reason for a call center client to withhold payment, Nair says refusal to pay does not always have legitimate motivation. “When a small organization or individual [in the case of a consultant withholding payment] is involved, sometimes they don’t pay intentionally. Even if a client pays a consultant, sometimes the consultant doesn’t pay the call center. They may try to cheat a few call centers.”
In addition, in many instances consultants based in India or the Philippines may charge call centers an up-front fee to connect them with clients looking to outsource services, although Nair says this practice is becoming less common as the call center market matures.
However, Nair clarifies that with well-known companies, non-payment situations do not typically happen. “If the client is established, everything is transparent,” he says.
Nair also adds that problems with accents may arise with Indian centers, and much more rarely with Filipino centers, while Indian providers generally have fewer problems than their Filipino counterparts with call center programs that include a selling component.
We’ll See You in Court
Unfortunately, when a dispute about payment arises between a call center and a client, generally it winds up going through the court system to get resolved. “In 90% of cases, clients and call centers never meet, everything is done via e-mail,” says Nair. “It makes out-of-court dispute settlement hard.”
Nair cites the example of a payment dispute he was involved in that was ultimately decided by the British legal system. “I worked with a client in the UK who owed an Indian call center 2,000 pounds [roughly $3,100 at current exchange rates] for generating between 50-60 leads, but refused to pay. The call center had a contract and signed NDA in place. Plan B contacted a UK solicitor and gave them all the data from the transaction, including e-mails and notes from conversations.”
The courts eventually ruled in favor of the call center, and the UK client had to pay a total of 5,000 pounds (about $7,800), which included compensation for damages and lawyer fees.
Take Action to Avoid Disputes
Naturally, the best way to avoid this type of legal scenario is to avoid disputes before they occur. Nair advises parties on both sides of the client/call center relationship to do a little homework prior to entering into a services contract.
“On the client side, look for a good call center with an NDA and agent qualification and training before going forward,” he says. “Look for centers that have been in the market for a long time. Follow this procedure in every case.”
And for call centers, Nair’s advice is succinct but complete. “Make sure you are dealing with a genuine client,” he says. “Get lots of references.”
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