Screw-overs are getting easier and easier

Forbes România
8 septembrie 2009

The communication industry today is no exception to smaller or larger screw-overs. The funny thing is that they reach such low levels that everything becomes downright hilarious. It’s like stealing a pack of cigarettes from a gas station. A small amount of money compared to the value and the reputation of the ”thief”. Whether we are talking about marketing consulting, branding, online or classic advertising, media-buying or events, these practices are becoming a common thing and in some cases even threaten the very existence of agencies. Shortly, what these screw-overs involve is the acquisition of a good or a service with partial or total avoidance of the final payment. Best case scenario, we encounter the postponement of the sine die (without arranging a future date) payment. We usually encounter four types of screw overs: unpaid, deferred payment, projects that are ”abandoned” and pitches ”left in the air”.

The first case is simple. A contract is signed, some obligations and deadlines are determined and the advertising or branding company carries out the object of the contract. Best case scenario, it receives a small sum of money in advance. Then the client disappears into nothingness, he/she can no longer be reached on the phone, any type of communication is blocked and the company never receives its money. The client misappropriates the result of the contract; something that is, in fact, a type of theft. This kind of screw-over is based on the fact that law and justice are not clear enough in regards to the commercial clauses, the procedures take a great amount of time, and the deadlines can be postponed indefinitely. This way the unpaid sums of money will never reach the accounts of the company. There is another trick of postponing the courts (and it is used very often): they invoke the exception of unconstitutionality which automatically blocks the file and sends it to the Constitutional Court – where it remains indefinitely because the Constitutional Court is assailed by these types of demands all the time. The last way in which they can escape or they can receive a postponement of any debtor in Romania is the exception of unconstitutionality.

The deferred payment is almost the same thing as the non-payment, only that, in this case, here intervene in personal deferral requests and occasional payments of very small amounts. Eventually, you end up in court, usually in vain, because the payer does not actually intend to pay in the end.

The ”neglected” project is the result of a contract in which most of the work related to it and a small part of the payments were usually already carried out. The postponement occurs at a key point in the performance of the contract when the client has to give feedback and his/hers final acceptance, after which the payment of the largest instalment stipulated in the contract has to be done. These people are knowingly doing this in order to avoid as much as possible the payments. Thus, the contract unresolved, being neither concluded nor having the possibility to request its termination.

The pitch ”left in the air” seems to be the most treacherous method because it involves the efforts of several agencies, usually without paying a minimum participation fee to cover some expenses. The mechanism is simple, a company invites as many agencies as possible to the pitch, and it sends a brief. After that, it invokes a ”crisis” and the company avoids all requests for signing a pitching contract that would involve the payment of a minimum fee and an explicit agreement which would not allow them to use the ideas and the results of the project’ from the presentations. Presentations are given by the agencies on the scheduled dates, hoping that they will receive, as promised, a response within a week or two. However, the answer never comes, even when the agencies specifically ask for a written or verbal one.

Regardless of their form or reason, these practices mainly involve theft. Failure to pay any obligations is theft. Misappropriating certain ideas without paying your obligations also means theft. Personally, in the last year, I was screwed over more than I ever was in the last 15 years. Mainly, I can mention a list that includes: a television station, a well-known cannery, an equally well-known cold cuts producer, a manufacturer of adhesives and building materials, a software company and a large juice producer. That’s right, I also have customers who encounter certain problems, just like everyone else has today, but they do pay. They ask for a postponement, but in the end, they obey the gentleman’s agreement.
The multiplication of these screw-overs has become a phenomenon especially for the companies that work honestly and which are not involved in arranged contracts with the state or ”friendly” contracts. These two types of contracts do not involve risks because they are concluded from the beginning between the parties who agree on the way money will be received. Those who work honestly and sign a contract in good faith are also those who are hit the hardest from the beginning. In their case, the chance of them remaining with unpaid sums of money is very high.

I always have to pay a fee when I go to the lawyer. Notary fees are mandatory – without paying them, the documents are not concluded. The same thing happens when you go to the doctor or to the clinic. You have to pay money for the medication you receive. When I buy a loaf of bread or a pack of cigarettes, I put the money on the counter. If I do not pay my loan, the bank executes my accounts and guarantees. When I get into a ”business” agreement, although an unfulfilled contract cannot be called a business, I am free to do whatever I want. The laws help me, the courts are difficult to be reached, the economic environment stimulates me, the general attitude favours the screw-overs – beautiful, shiny and presented under a cover of honourability and ethical business practices. This leads me to conclude that it is not the companies that are to blame, but the system that favours fraud.

Somewhere, sometime, the shell of respectability will crack when the agencies will start to massively sue the debtors and will write press releases with their names, warning about the risks of working with those clients.