Advice to Wannabees about paying up front -Stickie
Guest
Posts: n/a
Advice to Wannabees about paying up front -Stickie
Dear Mods,
I love you all dearly and respect your higher beingness.
Do you think a warning to prospective PPL students about giving a lump of dosh up front to training providers carries with it an element of risk?
Trying to rise from genuflection
Sir George Cayley
I love you all dearly and respect your higher beingness.
Do you think a warning to prospective PPL students about giving a lump of dosh up front to training providers carries with it an element of risk?
Trying to rise from genuflection
Sir George Cayley
Join Date: Feb 2007
Location: Amsterdam
Posts: 4,598
Likes: 0
Received 0 Likes
on
0 Posts
On the other hand, this advice is probably more relevant and timely for this forum than Keygrips warning about traveling to the USA, the VWP and the ESTA site, which has been a closed sticky on here since 2008...
Join Date: Jan 2008
Location: UK
Posts: 1,515
Likes: 0
Received 0 Likes
on
0 Posts
In which case would be possible to include the following advice (rather than just bellowing out "don't pay up front")
Advice on...
Why many businesses (not just flying schools) place a premium on money paid in advice and therefore offer discounts (which may be substantial) on such payment methods.
How to research the "real" financial facts behind a business (flying schools included)
How to insure against loss of money if it has been paid upfront.
How to build a good picture of the quality (financial or otherwise) of a flying school. Including, but definitely not only, listening to sdvice on pprune.
Such a sticky both here and on the training forum would cut through a lot of the ill informed and often agenda-driven nonsense that is posted on this subject.
Advice on...
Why many businesses (not just flying schools) place a premium on money paid in advice and therefore offer discounts (which may be substantial) on such payment methods.
How to research the "real" financial facts behind a business (flying schools included)
How to insure against loss of money if it has been paid upfront.
How to build a good picture of the quality (financial or otherwise) of a flying school. Including, but definitely not only, listening to sdvice on pprune.
Such a sticky both here and on the training forum would cut through a lot of the ill informed and often agenda-driven nonsense that is posted on this subject.
Join Date: Jul 2011
Location: Duxford
Age: 45
Posts: 142
Likes: 0
Received 0 Likes
on
0 Posts
I would strongly recommend that anyone thinking of paying up front runs a credit report on the school in question before doing so, or at least the limited company that operates the school.
They can be obtained from the likes of Experian for what is a very nominal amount in comparison to what you risk to lose, and will show a lot of pertinent information such as whether the company has made a profit or loss in the last few accounting periods, what their net worth is, whether they've incurred any court judgements etc.
This will give you a very good indication of the future prospects of the school. For instance, I ran checks on a number of places I was considering and one in particular showed heavy losses and a net worth of minus £200k. Didn't stop me considering learning at that school, but I certainly wouldn't give them a penny until services or goods had been received.
If anyone wants any assistance interpreting a credit report then I'm more than happy to help!
They can be obtained from the likes of Experian for what is a very nominal amount in comparison to what you risk to lose, and will show a lot of pertinent information such as whether the company has made a profit or loss in the last few accounting periods, what their net worth is, whether they've incurred any court judgements etc.
This will give you a very good indication of the future prospects of the school. For instance, I ran checks on a number of places I was considering and one in particular showed heavy losses and a net worth of minus £200k. Didn't stop me considering learning at that school, but I certainly wouldn't give them a penny until services or goods had been received.
If anyone wants any assistance interpreting a credit report then I'm more than happy to help!
Join Date: Jun 2003
Location: EuroGA.org
Posts: 13,787
Likes: 0
Received 0 Likes
on
0 Posts
Credit reports are practically worthless.
I have seen so many.
Only idiotic companies attach much value to them. I have just had a case of one supplier refusing credit to my company (est. 1991 and paying all creditors on 30 day terms, on the dot) because Experian decided we are about to go bust. How did they work that out? Firstly, being under £4M (?) turnover I file only abbreviated accounts. (This is sure to be the case for nearly all flying schools). These show no turnover figure so Experian have to make wild extrapolations from almost no data. They show year-end assets, but those are prone to wild gyrations according to whether e.g. I happen to draw out a big dividend just before or just after the year end. In 2010, I drew one just before, depleting the cash position, hence all this hassle. I got onto Experian but the scammers want £75 to take the phone call. I wrote to them and got back a boilerplate bollox reply.
The only way to do this is to speak to the people behind the company and use your instinct to get a feel for them. If you are happy with that (and there are many many "no" indicators e.g. them pressing hard for a credit account) then you give them a small facility so if they go down you don't lose much.
Unfortunately just about everybody new to flight training isn't going to have such a business instinct, and most of the many young people doing PPLs won't be clued up at all.
Also nearly all flying schools are bound to look extremely dodgy on paper.
You could also have one school which has no assets (because they lease everything in, enabling them to weather downturns etc) which is run by smart decent people, and another school showing substantial assets which are just massively overvalued rotting aircraft hulls, which is run by crooks.
The only advice is to never pay up front.
I have seen so many.
Only idiotic companies attach much value to them. I have just had a case of one supplier refusing credit to my company (est. 1991 and paying all creditors on 30 day terms, on the dot) because Experian decided we are about to go bust. How did they work that out? Firstly, being under £4M (?) turnover I file only abbreviated accounts. (This is sure to be the case for nearly all flying schools). These show no turnover figure so Experian have to make wild extrapolations from almost no data. They show year-end assets, but those are prone to wild gyrations according to whether e.g. I happen to draw out a big dividend just before or just after the year end. In 2010, I drew one just before, depleting the cash position, hence all this hassle. I got onto Experian but the scammers want £75 to take the phone call. I wrote to them and got back a boilerplate bollox reply.
The only way to do this is to speak to the people behind the company and use your instinct to get a feel for them. If you are happy with that (and there are many many "no" indicators e.g. them pressing hard for a credit account) then you give them a small facility so if they go down you don't lose much.
Unfortunately just about everybody new to flight training isn't going to have such a business instinct, and most of the many young people doing PPLs won't be clued up at all.
Also nearly all flying schools are bound to look extremely dodgy on paper.
You could also have one school which has no assets (because they lease everything in, enabling them to weather downturns etc) which is run by smart decent people, and another school showing substantial assets which are just massively overvalued rotting aircraft hulls, which is run by crooks.
The only advice is to never pay up front.
Last edited by IO540; 2nd Sep 2011 at 09:01.
Join Date: Feb 2002
Location: Dublin
Posts: 2,547
Likes: 0
Received 0 Likes
on
0 Posts
Credit reports are practically worthless.
Any that I've seen have been based on very very little data, and where it's based on info in the companies office (companies house in the UK) it was never based on the most recently available financial statements. Often the data was years out of date. And in any case, thety try to put the information available into a standardised form which for small businesses, ends up being a square into a round hole.
I wouldn't waste my money on a credit report.
Go and get the most recent financial statements from the companies office/house if you wish. You might be lucky and there are fairly recently, but in all likelyhood they will be at least a year old, and in the current climate, that is achient history.
Join Date: Jul 2011
Location: N/W
Posts: 37
Likes: 0
Received 0 Likes
on
0 Posts
I pay for 10 hour blocks upfront.
Its £12 cheaper per lesson and I can stomach losing a grand worse case..but I've been running businesses since I was 17 and generally get a vibe if in dealing with a bad egg (touch wood)
I would never lay £7000-£8000 out for lesson, two reasons one of them is if they did go bust then it’s a lot of cash to loose, the other reason would be..they have all your money for the course..are they going to be that interested in getting you up/working with/around your diary!
Its £12 cheaper per lesson and I can stomach losing a grand worse case..but I've been running businesses since I was 17 and generally get a vibe if in dealing with a bad egg (touch wood)
I would never lay £7000-£8000 out for lesson, two reasons one of them is if they did go bust then it’s a lot of cash to loose, the other reason would be..they have all your money for the course..are they going to be that interested in getting you up/working with/around your diary!
Join Date: Dec 2010
Location: UK
Posts: 134
Likes: 0
Received 0 Likes
on
0 Posts
Giving anyone your money in advance for anything is a financial risk. If you've assessed the risk, against the reward for the advance payment, then all you're doing is making a judgement call, and that's for the individual to make.
There is nothing special about flight training in this.
For every person who loses their money in this way through a flight school, countless others get exactly what they've paid for.
Making a blanket statement that you would be a fool to give you money in advance (based on the fact that some people lose it), is in many ways the same as saying as saying that only a fool would get into a light aircraft (based on the fact that some poeple crash).
There are many reputable companies who's business model relies on advance payments (by this I don't mean they would go bankrupt otherwise, I mean that their business model is designed for it), and they will be negatively affected if everyone just warns against giving your money in advance.
It would be a shame to destroy the good work of many successful and reputable businesses, just because a few unsavory / unsuccessful ones fail to deliver.
A more valuable solution would be a well conceived and managed league table / feedback system for flight schools to help people decide. But that carries with it it's own complications.
There is nothing special about flight training in this.
For every person who loses their money in this way through a flight school, countless others get exactly what they've paid for.
Making a blanket statement that you would be a fool to give you money in advance (based on the fact that some people lose it), is in many ways the same as saying as saying that only a fool would get into a light aircraft (based on the fact that some poeple crash).
There are many reputable companies who's business model relies on advance payments (by this I don't mean they would go bankrupt otherwise, I mean that their business model is designed for it), and they will be negatively affected if everyone just warns against giving your money in advance.
It would be a shame to destroy the good work of many successful and reputable businesses, just because a few unsavory / unsuccessful ones fail to deliver.
A more valuable solution would be a well conceived and managed league table / feedback system for flight schools to help people decide. But that carries with it it's own complications.
Join Date: Jun 2003
Location: EuroGA.org
Posts: 13,787
Likes: 0
Received 0 Likes
on
0 Posts
There is nothing special about flight training in this.
For every person who loses their money in this way through a flight school, countless others get exactly what they've paid for.
There are many reputable companies who's business model relies on advance payments (by this I don't mean they would go bankrupt otherwise, I mean that their business model is designed for it)
Join Date: Jul 2011
Location: Duxford
Age: 45
Posts: 142
Likes: 0
Received 0 Likes
on
0 Posts
Sorry but your comments about credit reports are completely unfounded. I work at a senior level in credit and risk management and therefore have a very in depth knowledge of the contents of such reports and their application.
They should never be used as a sole reference and are worthless if you do not know how to interpret the data correctly, but in the right hands they can still provide very valuable information and guidance. Small limited companies aren't a problem, they only really fall over when you're looking at sole traders. Abbreviated accounts are also fine you can still extract plenty from the information they provide - they don't show turnover or profit but you can still see net worth, working capital, acid test ratios etc, along with public data such as court judgements, winding up petitions, length of time in business etc.
Filed accounts can certainly be well out of date and obviously you take then in to account when reviewing the report, but even then if the trend in previous years is showing losses every year it's unlikely to have turned around massively in the current year and therefore still represents a higher risk. The remaining data will all be accurate to within a few days.
For instance, if you are looking at paying a school £6k up front and they come across as very professional and friendly, however you run a credit report that tells you they are losing vast sums of money each year and have recently incurred a number of county court judgements - are you really still going to risk your money with them? You're a fool if you do, and you can only get that sort of information from the credit report - they aren't going to tell you that when you go and visit!
Let me give you an example from one of the many schools I considered;
Oct 2007 - Net Worth - £(70,000)
Oct 2008 - Net Worth - £(125,000)
Oct 2009 - Net Worth - £(200,000)
Ok so the last accounts filed are nearly two years out of date. However, this shows two things. Firstly in recent years the company has been losing around £60/70k per year - this isn't a sustainable model therefore unless something does or has changed it's likely decisions will need to be made. Yes it may have turned around in the last year or so, but given the economy that's probably unlikely. It also tells me they are now a month late filing their accounts with Companies House therefore will be incurring fines and potentially a Notification to Strike Off will be issued if they do not file asap. I wouldn't provide this company any credit facilities, and I certainly wouldn't give them £6k of my own money, despite the fact the people are lovely and the school seemed excellent.
They should never be used as a sole reference and are worthless if you do not know how to interpret the data correctly, but in the right hands they can still provide very valuable information and guidance. Small limited companies aren't a problem, they only really fall over when you're looking at sole traders. Abbreviated accounts are also fine you can still extract plenty from the information they provide - they don't show turnover or profit but you can still see net worth, working capital, acid test ratios etc, along with public data such as court judgements, winding up petitions, length of time in business etc.
Filed accounts can certainly be well out of date and obviously you take then in to account when reviewing the report, but even then if the trend in previous years is showing losses every year it's unlikely to have turned around massively in the current year and therefore still represents a higher risk. The remaining data will all be accurate to within a few days.
For instance, if you are looking at paying a school £6k up front and they come across as very professional and friendly, however you run a credit report that tells you they are losing vast sums of money each year and have recently incurred a number of county court judgements - are you really still going to risk your money with them? You're a fool if you do, and you can only get that sort of information from the credit report - they aren't going to tell you that when you go and visit!
Let me give you an example from one of the many schools I considered;
Oct 2007 - Net Worth - £(70,000)
Oct 2008 - Net Worth - £(125,000)
Oct 2009 - Net Worth - £(200,000)
Ok so the last accounts filed are nearly two years out of date. However, this shows two things. Firstly in recent years the company has been losing around £60/70k per year - this isn't a sustainable model therefore unless something does or has changed it's likely decisions will need to be made. Yes it may have turned around in the last year or so, but given the economy that's probably unlikely. It also tells me they are now a month late filing their accounts with Companies House therefore will be incurring fines and potentially a Notification to Strike Off will be issued if they do not file asap. I wouldn't provide this company any credit facilities, and I certainly wouldn't give them £6k of my own money, despite the fact the people are lovely and the school seemed excellent.
Last edited by Ds3; 2nd Sep 2011 at 10:53.
Join Date: Jul 2009
Location: London
Posts: 519
Likes: 0
Received 0 Likes
on
0 Posts
SGC,
It seems many threads descend into the toxicity of the paying up-front debate, so I can see why it could be benefitial to have a sticky for wannabee-PPLs. The most sensible thing would be to avoid excessive detail and just make the sticky informative so that the issue is raised and the wannabee can go away and do their own research or analysis on their chosen flying school. I don't think there should be a sticky with horror stories or reasons why flying schools are all cowboys for offering discounts or advice on how to research company accounts.
If you are going to include advice on how to protect monies paid to a flying school up-front, then you really need to research it thoroughly and make damn sure your advice is correct.
If you are just planning on making a sticky that says don't pay up-front, don't bother. There are plenty of posters on pprune that only come here to post "don't pay up-front" in big red letters at every opportunity!
P.S. I doubt the mods will give it a sticky when they didn't give this thread one!
It seems many threads descend into the toxicity of the paying up-front debate, so I can see why it could be benefitial to have a sticky for wannabee-PPLs. The most sensible thing would be to avoid excessive detail and just make the sticky informative so that the issue is raised and the wannabee can go away and do their own research or analysis on their chosen flying school. I don't think there should be a sticky with horror stories or reasons why flying schools are all cowboys for offering discounts or advice on how to research company accounts.
If you are going to include advice on how to protect monies paid to a flying school up-front, then you really need to research it thoroughly and make damn sure your advice is correct.
If you are just planning on making a sticky that says don't pay up-front, don't bother. There are plenty of posters on pprune that only come here to post "don't pay up-front" in big red letters at every opportunity!
P.S. I doubt the mods will give it a sticky when they didn't give this thread one!
Join Date: Nov 2006
Location: just to the left of the filing cabinet
Posts: 255
Likes: 0
Received 0 Likes
on
0 Posts
I'm with IO540 on this one. For the majority of 'newbies' starting their PPL, aviation is a totally alien environment. They won't be tapped into the pilot grapevine and will probably assume that any flying club/school will be a) good and b) financially secure. Otherwise they wouldn't be allowed to operate, right?
The only safe solution for Joe Bloggs is to either a) pay with a credit card and/or b) pay no more than they are prepared to lose if the company folds.
In my view, any company which predominantly bases its 'business model' on assumed block pre-payment income is precisely the sort which I would avoid like the plague. That's not a business model - it's a forlorn hope that things will work out OK.
The sticky idea is an excellent one, but it absolutely must contain a reasonable financial-risk health warning, otherwise it is entirely pointless!
The only safe solution for Joe Bloggs is to either a) pay with a credit card and/or b) pay no more than they are prepared to lose if the company folds.
In my view, any company which predominantly bases its 'business model' on assumed block pre-payment income is precisely the sort which I would avoid like the plague. That's not a business model - it's a forlorn hope that things will work out OK.
The sticky idea is an excellent one, but it absolutely must contain a reasonable financial-risk health warning, otherwise it is entirely pointless!
Join Date: Jun 2003
Location: EuroGA.org
Posts: 13,787
Likes: 0
Received 0 Likes
on
0 Posts
DS3 - I think you, like so many in the accountancy profession, do not understand that that more or less the only thing which really matters in business is cash. Cash is king, everything else is conjecture (as they say). All the various ratios etc are just fancy figures. Of course what really matters are the intentions and competence of the people behind it all, but you won't get that from abbreviated (or any other) accounts.
Obviously if there are CCJs then you don't touch the company with a 20ft bargepole (unless the CCJ record is a mistake, which is easily done; in fact my company got one of those some years ago as a result of some illiterate court employee mis-spelling the company name and then looking up the co. reg # from the mis-spelt version; took me 6 months to sort that out with the credit ref agency morons).
But all the smart crooks avoid CCJs. You always pay up just before
Also there are many smart honest businessmen who run very lean companies which generate loads of cash but always look terrible on paper (mine sure does).
It is anyway a sensible strategy to run a bleak asset position because it protects you from frivolous litigation
The companies which fatten up their accounts are ones who have borrowed money from dimwits (banks) who like to see pretty accounts, but one ends up paying a ton of extra corporation tax by retaining profits, overvaluing assets, etc. Aviation is a prime area for overvalued assets, with most aircraft owners being in total denial as to how much their hardware is really worth.
Not paying up front also prevents being tied to a bad school. When I started (2000) I had been in business for 22 years but was totally clue-less about aviation. I ended up in a school which ran such poor maintenance practices that I walked out after 20hrs. I did not pay up front but the change of aircraft type still cost me a big packet.
in which case why not use that school but not give them money up front?
Obviously if there are CCJs then you don't touch the company with a 20ft bargepole (unless the CCJ record is a mistake, which is easily done; in fact my company got one of those some years ago as a result of some illiterate court employee mis-spelling the company name and then looking up the co. reg # from the mis-spelt version; took me 6 months to sort that out with the credit ref agency morons).
But all the smart crooks avoid CCJs. You always pay up just before
Also there are many smart honest businessmen who run very lean companies which generate loads of cash but always look terrible on paper (mine sure does).
It is anyway a sensible strategy to run a bleak asset position because it protects you from frivolous litigation
The companies which fatten up their accounts are ones who have borrowed money from dimwits (banks) who like to see pretty accounts, but one ends up paying a ton of extra corporation tax by retaining profits, overvaluing assets, etc. Aviation is a prime area for overvalued assets, with most aircraft owners being in total denial as to how much their hardware is really worth.Not paying up front also prevents being tied to a bad school. When I started (2000) I had been in business for 22 years but was totally clue-less about aviation. I ended up in a school which ran such poor maintenance practices that I walked out after 20hrs. I did not pay up front but the change of aircraft type still cost me a big packet.
despite the fact the people are lovely and the school seemed excellent.
Join Date: Jul 2011
Location: Duxford
Age: 45
Posts: 142
Likes: 0
Received 0 Likes
on
0 Posts
IO, please don't associate me with accountants Credit management is a far cry from bean counting and has a far more commercial view point. My department are responsible for around 4,000 accounts covering approximately £20m at any one point, so I am very familiar with the phrase 'cash is king'!
Certainly the intentions and competency of the individuals involved are very pertinent, however if their accounts show they are losing money each year the business cannot be sustainable regardless, and therefore despite the best intentions remains high risk.
There are definite benefits to running a lean business and keeping the cash away from the tax man, however if you chose to operate like that you have to accept that you will struggle to get credit facilities with companies who do not have a trading history with you.
I work in the construction industry so most of the credit reports I look at show very poor figures and £0 credit limits, yet with careful analysis and consideration we still extend considerable credit facilities, manage a profitable turnover of £70m and have very, very minimal bad debt in comparison to turnover and industry averages.
Absolutely, no reason at all not to use them if you aren't paying any money up front - worst case is you will have to transfer your training elsewhere if they do go under. My reference to credit reports and the associated implications was purely related to making large up front payments.
Credit management is a far cry from bean counting and has a far more commercial view point. My department are responsible for around 4,000 accounts covering approximately £20m at any one point, so I am very familiar with the phrase 'cash is king'! Certainly the intentions and competency of the individuals involved are very pertinent, however if their accounts show they are losing money each year the business cannot be sustainable regardless, and therefore despite the best intentions remains high risk.
There are definite benefits to running a lean business and keeping the cash away from the tax man, however if you chose to operate like that you have to accept that you will struggle to get credit facilities with companies who do not have a trading history with you.
I work in the construction industry so most of the credit reports I look at show very poor figures and £0 credit limits, yet with careful analysis and consideration we still extend considerable credit facilities, manage a profitable turnover of £70m and have very, very minimal bad debt in comparison to turnover and industry averages.
in which case why not use that school but not give them money up front?
Join Date: Feb 2002
Location: Dublin
Posts: 2,547
Likes: 0
Received 0 Likes
on
0 Posts
Let me give you an example from one of the many schools I considered;
Oct 2007 - Net Worth - £(70,000)
Oct 2008 - Net Worth - £(125,000)
Oct 2009 - Net Worth - £(200,000)
Oct 2007 - Net Worth - £(70,000)
Oct 2008 - Net Worth - £(125,000)
Oct 2009 - Net Worth - £(200,000)
Certainly the intentions and competency of the individuals involved are very pertinent, however if their accounts show they are losing money each year the business cannot be sustainable regardless, and therefore despite the best intentions remains high risk.
But what if each of those years showed a steady "balance sheet total" of £125K or there abouts? (I didn't use the term "Net Worth" because financial statements are not designed to give a company's net worth. The assumptions and conventions in them are not designed to show a net worth.)
Such a business could be making a profit of £500K pa, with the directors taking it all out as salary (as most small businesses in that position would do to avoid paying Corp Tax as well as Income Tax).
Or it could be the case, that the directors haven't take a salary for the past two years, the aircraft are included in inflated values, and there is little chance of the company surviving very long at all.
A good bet is much harder to find through such reports, but I accept a hopeless case is much easier to find.
Join Date: Dec 2010
Location: UK
Posts: 134
Likes: 0
Received 0 Likes
on
0 Posts
Come on IO540.
Is this another case of "what I personally perceive is what the world is" syndrome?
For example. What IS the "avereage % of dodgy businesses" that you are referncing? And what is the percentage of aviation businesses that are dodgy? Have you normalised these statistics by region, sector, age of business, turnover, etc, etc? Have you also refernced credit reports and normalised your statistics against those results?
Unless you have some actual facts to share about this, it's important not to make over-confident statements which may affect people's judgement.
Again.. when you say "a whole load", what statistics is this based on, and how does this refute or counter the point that more people get what they paid for than don't? And finally how does that statement differentiate the aviation industry / flying schools from countless other businesses?
Not at all. Your above quote is the equivelant to saying "Always give your money to flying schools in advance", which I haven't said AT ALL.
Sure. Any business model which uses the benefit of positive cash-flow to make their USP work. For instance a company which competes in a difficult marketplace by offering discounts to customers who pay in advance. They are effectively passing on the cash-flow savings (capital costs / finance / whatever your business uses as a metric).
This is one of the many reasons why drop-ship-based online shops are able to beat the highstreet as they don't need to keep stock, or arrange credit.
Do you ever buy anything online? Do you know the statistics of online fraud / bankrupcy? How do you mitigate against that when you buy online? Are you a fool for parting with your cash in advance? Do you recomend to the world that they would be nuts to do it? If not, how do you justify slating one without the other?
Actually there is: a well above average % of aviation businesses are dodgy. The business seems to attract all kinds of characters. You find them running schools, maintenance companies, you name it.
For example. What IS the "avereage % of dodgy businesses" that you are referncing? And what is the percentage of aviation businesses that are dodgy? Have you normalised these statistics by region, sector, age of business, turnover, etc, etc? Have you also refernced credit reports and normalised your statistics against those results?
Unless you have some actual facts to share about this, it's important not to make over-confident statements which may affect people's judgement.
True but when a school goes down, a whole load of students lose their money all in one go.
It's a bit like saying it's OK to give all customers credit for £20k because, on average, most won't go bust right away.
Can you please elaborate on the "business model" which relies on borrowing large sums from customers? I am quite interested.
This is one of the many reasons why drop-ship-based online shops are able to beat the highstreet as they don't need to keep stock, or arrange credit.
Do you ever buy anything online? Do you know the statistics of online fraud / bankrupcy? How do you mitigate against that when you buy online? Are you a fool for parting with your cash in advance? Do you recomend to the world that they would be nuts to do it? If not, how do you justify slating one without the other?
Join Date: Jul 2011
Location: Duxford
Age: 45
Posts: 142
Likes: 0
Received 0 Likes
on
0 Posts
dublinpilot
If a company's balance sheet has remained steady for a number of years I wouldn't have any issues with that. Obviously there's still a risk, but my recommendation of viewing a credit report was more designed to spot the obvious hopeless cases.
If a school is on the brink of going under, there's a good chance (although obviously not in every case) that it will be reflected in the credit report. Assuming your average PPL takes a year to obtain which is quite a short time in terms of business, checking for obvious indicators of financial hardship is a no-brainer for me.
If a company's balance sheet has remained steady for a number of years I wouldn't have any issues with that. Obviously there's still a risk, but my recommendation of viewing a credit report was more designed to spot the obvious hopeless cases.
If a school is on the brink of going under, there's a good chance (although obviously not in every case) that it will be reflected in the credit report. Assuming your average PPL takes a year to obtain which is quite a short time in terms of business, checking for obvious indicators of financial hardship is a no-brainer for me.
Join Date: Dec 2010
Location: UK
Posts: 134
Likes: 0
Received 0 Likes
on
0 Posts
Totally agree with DS3
I don't think anyone would say that a credit report is ever a reliable way of assessing that there is no risk. But they're sometimes a very good indication that there is high risk.
This, along with some of the more sensitive research you can do - such as the one suggested by IO540 - should be used whenever paying in advance, should you personally decide that you are borderline on the risk you're taking.
Each case has to be taken on its own merit. Blanket "don't pay in advance" statements are just as worthless as blanket "pay in advance" statements - it all depends on the individual circumstance.
I don't think anyone would say that a credit report is ever a reliable way of assessing that there is no risk. But they're sometimes a very good indication that there is high risk.
This, along with some of the more sensitive research you can do - such as the one suggested by IO540 - should be used whenever paying in advance, should you personally decide that you are borderline on the risk you're taking.
Each case has to be taken on its own merit. Blanket "don't pay in advance" statements are just as worthless as blanket "pay in advance" statements - it all depends on the individual circumstance.
Join Date: Nov 2000
Location: Cambridge, England, EU
Posts: 3,443
Likes: 0
Received 1 Like
on
1 Post
Do you ever buy anything online? Do you know the statistics of online fraud / bankrupcy? How do you mitigate against that when you buy online? Are you a fool for parting with your cash in advance? Do you recomend to the world that they would be nuts to do it? If not, how do you justify slating one without the other?
Personally I will buy online from Amazon using a credit card[#], but I will touch neither eBay nor PayPal with any sort of barge pole.
[#] Unless and until they start demanding Verified by Visa, which puts all the risk of fraud onto the punter (as explained on Light Blue Touchpaper for anyone who doesn't believe this).