Case studies

Protection in the event of a client’s default

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TCS Media

In brief:

TCS Media is financially liable for the advertising space it books for its clients. For 17 years, it has protected itself from the risk of non-payment with Coface credit insurance.

Business challenge

TCS Media is an independent advertising agency based in London which plans and implements media campaigns for household names such as AGA, JCB, Laura Ashley and Sudocrem. On behalf of its clients, the Agency negotiates the best possible rates and buys advertising space across a range of different channels, including print, TV and cinema.

This places TCS Media at considerable financial risk, according to Finance Director, John Hounsell. “As the agency, we are the principal contact and we are liable for the cost, whether or not the client pays us,” he says. “When you consider that a campaign might cost £1million and our return is typically a small agency commission, we obviously need protection in the event of a client’s default.”

Another consideration is that trade organisations representing the media, such as the News Media Association, also carry out financial due diligence on advertising firms before they can join agency recognition schemes and earn commission. John explains: “They check our credit worthiness and insist on credit insurance – but we would have a policy anyway because I need to sleep at night!”

Coface solution

In fact, TCS Media has had Coface credit insurance since 1999, and John has been delighted with the service, especially when it really counts. He comments: “It has been a while since we had to make a claim – the last one was for £250,000 about 10 years ago. However, one of the major reasons we have stuck with Coface all this time is that they always paid promptly after liability has been accepted, even with such big claims. That is obviously very important for our cash flow.”

When it comes to bad debt, John readily agrees that prevention is better than cure but in the fast-paced agency environment, credit decisions need to be made quickly to meet booking deadlines. This is where CofaNet, Coface’s online policy management tool, makes a real difference. “Credit limits are not always a top priority for staff when they go out to win clients,” says John. “It’s not unknown for someone to come into the office on Thursday to say we need to book some advertising space for that Sunday. In those situations, it is important that we can make credit limit requests to Coface and be sure of a quick response.”

TCS Media’s disciplined approach to credit risk is supported by the information they receive from Coface. “If a credit limit is refused, we always insist on pre-payment so we aren’t left holding the baby,” John explains. “Sometimes the client goes elsewhere and there may be other agencies that are prepared to take on the business. However, we know some small agencies have gone-under owing a lot of money and we don’t want to take that chance.”


“We would recommend Coface to other companies because of the great service we have received over the years. We have a good relationship with the underwriters and everything works very well”

John Hounsell, Finance Director

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