We have seen that banks and trade associations will usually only give brief references. Business associates may give more information, but see below at 8.7. An Enquiry Agency will give much more detail about a firm's activities, and for a fee, will research the firm's financial background, its standing, credit-worthiness and ability to repay loans or fulfil obligations. When writing to an Enquiry Agency, therefore, you can ask for more.
We have been asked by D.F. Rowlands Ltd. of Milton Trading Estate, Peterborough, to allow them a credit of up to £5,000 in allowing them to settle by quarterly statements. As we have no knowledge of this firm, would it be possible for you to give us detailed information of their trading activities over, say, the past three years?
The firm named on the enclosed slip has written to us asking if we would allow them to settle by 60-day bill of exchange. Our trading with them so far has only been up to £500.00. But as we know nothing about them or their credit-worthiness, would it be possible for you to investigate their business activities over the past few years and give us a detailed report?
Replying to enquiries about credit rating
In most countries there are laws which protect a firm from having its reputation damaged by another company saying or writing things that could harm the firm's good name, and this should be considered when giving details of a company's credit-worthiness, or commenting on its standing.
Refusing to reply
There are a number of reasons why you may not wish to reply to an enquiry about one of your customers. If, for example, the company writing to you does not state that you have been named as a referee by their customer, and you do not want to risk offending them, it would be better not to make any comment.
Thank you for your letter concerning our customer, but we cannot give you any information until we get permission from the customer himself. So if you can get the person mentioned in your letter to write to us asking us to act as referees we will give you the necessary information.
As we have not been asked by the person mentioned in your letter to write a reference on their behalf we cannot supply any information about them.
If you do not know enough about the company to comment, then it is better to say so.
With reference to the company you mentioned in your letter of 9 October, we are sorry to say we know little about them as we have only supplied them on a couple of occasions. Therefore we cannot give you any details of their trading record or credit standing.
Thank you for your letter which we received today. Unfortunately, we know nothing about the firm you are enquiring about as our only dealings with them have been on a cash basis. We are sorry that we cannot be of help to you in this matter.
Sometimes you may simply not want to give any information about a customer whether you know their reputation or not. In this case a polite refusal, generalizing your statements, is the best course of action.
With reference to your letter of October 16 in which you asked about the credit standing of one of our customers, we are sorry to say that we never give any information about customers to inquirers, and as business associates of ours we are sure you will appreciate that confidence. Perhaps an enquiry agency could be of more help to you in this.