Unable to collect payments for Musical Instrument rentals

[Charles_h]

What is the name of your state (only U.S. law)? Georgia

I own a music store and provide musical instruments for students in the school bands via a rental program where the parents sign a contract and agree to pay via an auto draft on their credit or debit cards each month. Every month we have a few where the payments are declined but we are usually able to collect eventually. However there are a few where the customer seems to have dropped off the face of the earth. Any attempt to contact the customer is not successful. I've been thinking for the extreme cases to file a police report against them for theft or I think the technical term will be petty larceny. I'm not sure if this is the best way to go. If nothing else if they ever get stopped by police they might find a warrant for their arrest. Then I would be happy to drop charges if they would just give us the instrument back.

Let me know if this is the right thing to do or is there another method that would be easier, better, etc.

Thanks

 

[not2cleverRed]

I would try small claims court first. (I am assuming that you are primarily renting out lower end instruments.)

 

[Zigner]

I've been thinking for the extreme cases to file a police report against them for theft or I think the technical term will be petty larceny. I'm not sure if this is the best way to go. If nothing else if they ever get stopped by police they might find a warrant for their arrest.

Filing a report does NOT guarantee any type of charges will be filed, much less a warrant issued.

As was noted above, pursue this in small claims court. In the future, collect a large enough deposit to cover the cost of the instrument should it not be returned.

 

[adjusterjack]

I've been thinking for the extreme cases to file a police report against them for theft or I think the technical term will be petty larceny.

You can try that but the police are likely to tell you it's a civil matter and won't take a report.

It's breach of contract

is there another method that would be easier, better, etc.

Yes, you locate the person and you sue in small claims court.

You might want to consider becoming a member of a credit bureau so you can report defaults like that and trash the credit of whoever defaults as well as being able to check their credit at the beginning.

Having access to their credit reports will also help in skip tracing.

 

[NIV]

http://law.justia.com/codes/georgia/2016/title-16/chapter-8/article-1/section-16-8-4/

GA Code § 16-8-4 (2016)
(a) A person commits the offense of theft by conversion when, having lawfully obtained funds or other property of another including, but not limited to, leased or rented personal property, under an agreement or other known legal obligation to make a specified application of such funds or a specified disposition of such property, he knowingly converts the funds or property to his own use in violation of the agreement or legal obligation. This Code section applies whether the application or disposition is to be made from the funds or property of another or from the accused's own funds or property in equivalent amount when the agreement contemplates that the accused may deal with the funds or property of another as his own.

(b) When, under subsection (a) of this Code section, an officer or employee of a government or of a financial institution fails to pay on an account, upon lawful demand, from the funds or property of another held by him, he is presumed to have intended to convert the funds or property to his own use.

(c)(1) As used in this subsection, the term "personal property" means personal property having a replacement cost value greater than $100.00, excluding any late fees and penalties, and includes heavy equipment as defined in paragraph (2) of Code Section 10-1-731 and tractors and farm equipment primarily designed for use in agriculture.

(2) Any person having any personal property in such person's possession or under such person's control by virtue of a lease or rental agreement who fails to return the personal property within five days, Saturdays, Sundays, and holidays excluded, after a letter demanding return of the personal property has been mailed to such person by certified or registered mail or statutory overnight delivery, return receipt requested, at such person's last known address by the owner of the personal property or by the owner's agent shall be presumed to have knowingly converted such personal property to such person's own use in violation of such lease or agreement.

(3) In the event that any personal property is not returned as provided for in the lease or rental agreement and the court orders the lessor or renter to pay replacement costs, replacement costs shall include but not be limited to:

(A) The market value of the personal property. The market value shall be established by the owner of the property by providing from a supplier of such or reasonably similar personal property a current quotation of the value of the personal property which is of like quality, make, and model of the personal property being replaced. The value to be awarded shall be the higher of:

(i) The value on the date when the conversion occurred; or

(ii) The value on the date of the trial;

(B) All rental charges from the date the rental agreement was executed until the date of the trial or the date that the property was recovered, if recovered; and

(C) Interest on the unpaid balance each month at the current legal rate from the date the court orders the lessor or renter to pay replacement costs until the date the judgment is satisfied in full.

(4) If as a part of the order of the court the lessor or renter is placed on probation, supervision of said probation shall not be terminated until all replacement costs, fees, charges, penalties, interest, and other charges are paid in full. All payments relative to this Code section shall be made to the appropriate court of jurisdiction and the court shall make distribution to the owner within 30 days of receipt thereof.

(5) In the event that the owner incurs any expenses in the process of locating a lessor or renter who did not return any personal property according to the lease or rental agreement, the court shall provide that the lessor or renter reimburse the owner for those expenses which may include, but not be limited to, credit reports, private detective fees, investigation fees, fees charged by a law enforcement agency for such services as police reports, background checks, fees involved with swearing out a warrant for incarceration, and any other bona fide expenses.

 

[Zigner]

http://law.justia.com/codes/georgia/2016/title-16/chapter-8/article-1/section-16-8-4/

So? As was said, there is no guarantee that any charges would be filed in a case such as this and it's much more likely that this will be treated as a civil matter.

 

[NIV]

So? As was said, there is no guarantee that any charges would be filed in a case such as this and it's much more likely that this will be treated as a civil matter.

It is obvious it is not just a civil matter. There is a specific statute to address the issue with specific acts recommended to prove the difficult element. As to if Georgia law enforcement is likely or unlikely to enforce state statutes, I have no knowledge.

 

[Mass_Shyster]

One of the more creative solutions I saw was a video store back in the 1980s. He would collect the member's social security number when they signed up. (Back then, your SSN was on your driver's license). After a few years of late fees, he would "forgive" the debt, and send a 1099 to the deadbeat, and the IRS for the value of the forgiven debt.

Around the same time, I did some work for a musical instrument rental store in Boston. They had a dedicated person for collections. They knew a certain number of instruments would never come back, and they figured it into the overall rental price.

Last note: I was in court Monday (In Massachusetts - not your state) and someone was charged with Failure to Return Leased Property from Rent-a-Center. The judge looked at the prosecutor and said "This court is not a collection agency for Rent-a-Center". Case dismissed.

 

[Zigner]

It is obvious it is not just a civil matter.

I don't believe that I stated otherwise.

 

[LdiJ]

Filing a report does NOT guarantee any type of charges will be filed, much less a warrant issued.

As was noted above, pursue this in small claims court. In the future, collect a large enough deposit to cover the cost of the instrument should it not be returned.

The bolded is probably not realistic. If he could charge enough to cover the cost of the instrument then they wouldn't need to rent.

I have just done some googling and I am a bit astonished at the cost of band instruments. A saxophone for example, can cost about 500.00 used at the very lowest end or anywhere up to 6000.00 new. The average seems to be around 3000.00.

 

[ShyCat]

I have just done some googling and I am a bit astonished at the cost of band instruments.

I'd be afraid to total up what I've spent on instruments though I consider it money well spent.

My daughter is a talented musician who can pick up just about any instrument and teach herself how to play it. In just the six years of middle and high school band/orchestra, I bought her a flute, piccolo, two oboes, two saxophones (alto and tenor), cello, acoustic guitar, and a drum set. I'm sure it's one of the reasons she got early acceptance into the three universities to which she applied. She has since bought herself an electric guitar, ukelele, and mandolin. Music brings her joy and I'm happy to have done my small part in making it possible.

 

[Dandy Don]

Ask for a deposit that covers 1 or 2 monthly payments, which will probably weed out the deadbeats who can't really afford to rent or who are not serious about wanting to continue paying for the rental.