Insurer Bupa receives warning for mistreatment of suppliers

Health insurance company Bupa has received a warning from the Small Business Commissioner for settling a supplier’s invoice late, and failing to provide statutory late payment interest to the company.

The supplier in question is Blacklight Advisory, which submitted a formal complaint to the Small Business Commissioner after Bupa failed to pay £29,403 for consultancy services within its 45-day contract.

Bupa paid up after being contacted by the payment watchdog, 75 days after it was invoiced. It claimed there was an error in the invoice approval process and “staffing inefficiencies”, while also blaming Blacklight for not following the recommended invoice submission process.

But the complaint report noted that Blacklight had submitted its invoice properly and was reassured on several occasions that the invoice had been received and authorised.

In addition to that, Bupa offered a late payment interest at 2% above the Bank of England base rate for the value of the invoice. But the Small Business Commissioner said 2% was not enough - the late payment interest should be 8% above the Bank of England base rate, according to the Late Payment of Commercial Debts (Interest) Act 1998.

Paul Uppal, the Small Business Commisioner, said larger firms “should not manipulate small suppliers into signing away their rights” by offering interest which is lower than required.

Bupa also said they offered 30-day payment terms to small businesses but this policy was only implemented after Blacklight complained against them. Blacklight requested a variation in payment terms to 30 days, but was rejected.

Paul Uppal said: “I am witnessing variations from the statutory defined value of late payment more frequently in contractual agreements. It seems that small businesses are being pressured into accepting these terms if they wish to supply large businesses as part of standard framework agreements."

Andy Lyon, partner at Blacklight Advisory, told ITV: “Throughout the life of the contract we endured issues with payments which greatly disrupted our advisory business. Bupa failed to provide us with any recommended processes to follow and the lack of accountability for the mistakes they have made shows little regard or empathy for small businesses.”