Factoring and double brokering, these are very sensitive and vast topics I doubt this forum is capable of covering in full. Moreover, throwing some partial information might result into further arguments, misinterpretation, confusion to some readers. On behalf of a factoring company I'd like to appeal to
KeyFactor to be very careful in choosing the words and expressing your thoughts, they might be wrongly interpreted. I would discourage you to continue expressing your knowledge publicly, and would rather encourage members/readers of this forum to address PM to KeyFactor or Economy or any other factoring operator on this forum with your questions or concerns. I'll be more than happy to provide our opinion on the issue. I choose word
OPINION because there is no manual to refer to that focuses and outlines factoring operations. Contrary to transportation industry where almost everything is prescribed and regulated.
Also, Factoring is not limited to transportation industry. There are many other industries Factoring companies serve. The operation mechanisms and principles are somewhat similar.
In some other thread of this forum
MikeJr said
"factoring it's partly about rates and partly about the breadth of services that they can offer and the fine details of the agreement. What else can they do for you and what else you need from them kinda thing". We totally agree with such statement. Besides A/P purchasing, all Factors do that, it is about other variety of expertise and services Factor has to offer.
if you signed the assignment letter, you are obviously bound by its terms.
There are no requirements to sign the Notification of Assignment (NOA), it is just a matter of whether the debtor was notified of Assignment.
All experienced transportation industry professionals, members of this forum, most likely familiar of factoring companies possession of a great leverage over all parties to the contract of carriage - transportation transaction. Factoring company is the very first party to a transaction who is out of money, the other words compensated their client/carrier for rendered services less discount (Factoring Fee). Client-Cargo Owner who requested the truck to move the goods is yet to pay for the services, broker is yet to pay for the services, but Factoring company already have. Now, here is the question:
WHAT IS THERE TO SUPPORT FACTORING EXISTENCE?
Statutory provisions, common laws, knowledge, experience and expertise of the industry are the elements that allow Factoring companies to structure the successful operations.
Notification of Assignment; if one received, READ IT, understand it, it contains crucial instructions. Instructions debtor has to follow. Instructions that were given to the debtor by the creditor. Now it is turn for debtor to pay, settle the indebtedness. It is not debtors' choice whether to accept Assignment (NOA) or not. Debtor simply is given instructions of whom to pay. If the debtor ignores the Assignment, he does so at his peril.
Uncertain or unfamiliar with the subject? Do not ignore NOA. Research the subject, take advise from someone with experience, seek legal advise, consult, consult, consult.
Our apologies for the long message, these topics would take a book to explore.