Top Service News
Construction Red Flags
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When foresight is better than hindsight!
By Philip King
As we moved into 2026, I spent a morning chatting with members of the Member Support and Debt Recovery teams at Top Service. I wanted to know what they had seen in 2025 and what lessons they learned for the year ahead. Several key themes emerged.
Insolvency issues have always been the subject of many calls to the Member Support Team, but slightly less so in 2025. Perhaps members have built their knowledge, or they’re becoming better at dealing with it. The general impression was that, while insolvencies remain high, there have been fewer high-profile instances in construction over the past year, although Corbyn Construction Ltd and Sheen Lane Developments Ltd stood out as impacting a number of clients and involving sizeable amounts. In both cases, Top Service had issued warnings six months before their demise and had successfully collected £1.3m and £250,000 respectively on behalf of clients in the intervening period.
Fraud has replaced insolvency as the number one subject of calls. Long-firm and short-firm frauds are still frequently seen, and impersonation fraud is increasing exponentially. This often seems to be perpetrated by the same people or organisations who repeatedly target suppliers with a view to getting materials or equipment shipped using a genuine customer’s details. By the time the fraud is spotted, the supplies have disappeared, and the fraudulent party/ies cannot be traced.
All too often, members believe that, while they recognise the risks, they won’t get caught. They start to take preventative action only after they have been scammed and become a victim. Where the amounts are sizeable, for a small or micro business, this can be too late. Members are urged to look far more closely at the information they obtain. Checking for cloned websites and minor email inconsistencies can reveal and help avoid the risk.
While the changes being introduced by the Economic Crime and Corporate Transparency Act (ECCTA) 2023 are to be welcomed, especially the verification and validation of directors’ details, there remains a fear that fraudsters will find ways to circumvent the controls. Their ingenuity is breathtaking at times!
Debt Recovery specialists saw 2025 follow the pattern of previous years for the can’t pays. The inability to pay is often the result of the domino effect caused by a larger or main contractor delaying payment, or through difficulty in finding work or contracts to generate the cash flow needed to pay suppliers promptly or at all. The complexity of contracts signed without having been properly reviewed continued to be a problem. Sub-contractors only find out too late that non-compliance with a particular clause is preventing payment. The relevant clause might be considered unreasonable or even immoral, but that makes it no less effective. Sadly, and all too often, the excitement offered by landing a big new order or contract outweighs the need to be vigilant beforehand.
By far the biggest change in 2025 was the rising eminence of a new weapon for the won’t pays! The increasing use of Artificial Intelligence tools such as ChatGPT allows debtors to identify alleged reasons not to pay, even if those reasons are inappropriate, inapplicable or factually wrong. The use of such tactics, even when the grounds cited are without substance, causes delays while investigations have to be conducted and responses prepared, often leading to a repeated cycle of the process! This is where the Debt Recovery team comes into its own. They know the law, they know the Codes being quoted or misquoted and can have real conversations that cut through the noise being generated, and get back to the crucial issue of getting payment for unpaid invoices.
Interestingly, both teams had the same biggest wish for 2026. They wanted Top Service members to make more use of the payment experience and other shared information available to them. Better informed credit decisions would mean fewer regrets about supplying too much credit to the wrong customers, and fewer invoices being unpaid.
Foresight is so much more effective than hindsight!