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Fight Back

Getting out of a shady vendor contract

Nov. 23, 2020
Have you ever gotten caught in a less-than-honest vendor relationship? Dr. Chris Salierno found himself in that situation twice, and he fought back. Here's what he did and why it worked.

I love working with the various vendors who help support my practice. I consider many groups, such as laboratories and material distributors, to be strategic partners. These relationships are more cooperative than transactional. I enjoy seeing my local sales representative when he or she pays a visit and learning about new opportunities to evolve my practice.

However, there are some vendors who are definitely in the transactions business. There is a smaller subset of those who, unfortunately, are not very pleasant to deal with and who may engage in unsavory and manipulative sales tactics.

I found myself in one such relationship several years ago with a major name in the medical waste business. I had noticed my bills fluctuating without explanation and I was not able to set my preferred frequency of waste pickups. When their customer management department was unable to offer the service I was looking for, I requested termination of our business relationship. I was transferred to the business’s cancellation department and was informed about my “liquidation fees” for early termination of a contract. What was odd was that I didn’t recall ever signing a contract. A few days later, the company sent a copy of an email that had been sent by an employee and stated that this qualified as a digital signature and a contractual relationship.

Have you had a similar experience with a vendor? This kind of bullying makes me furious. Fortunately, there is hope for exiting these abusive relationships without having to pay the termination fees.

First, develop a firm understanding about how the company is claiming you entered into a contract. Depending on your state laws, the vendor’s tactics may not be legal. If they can produce a document with your actual signature, then you won’t have much ground to stand on. On the other hand, if they simply exchanged emails with an employee who does not have the authority to enter your business into a contract, then you may have some hope. Also, these emails may not make clear that a contract was being created, which further supports your argument.

Next, with your facts in hand, I recommend writing a letter explaining that you refuse to pay termination fees because you did not willingly or knowingly enter into a contract. State that, in your opinion, no such contract exists. Include a check in the amount of the most recent bill (but not including any termination fees) and write the words “Full and Final Payment” in the memo line. Your letter should also explain that if the check is cashed, the vendor agrees to this settlement and that no further action will be taken by either party. Make a copy of the letter and the check for your records.

Unfortunately, I have had to take this course of action twice with vendors. In both cases, I received urgent calls from them after they deposited the check and eventually read the letter. They said I was still under contract. I stated I was not and reminded them that since they deposited the check, the matter was now closed.

They may protest. They may threaten to send you to their collection agency. Let them. You have copies of the letter and the check that was deposited. One of the vendors I dealt with actually did send my business to their collection agency, but when I produced a copy of the letter and check, they immediately ceased pursuing the case.

In dentistry, we get to work with some wonderful businesses, both large and small. I treasure these relationships. But if you ever find that you’ve been the victim of an improper tactic like the ones I described, consider fighting back.

Chris Salierno, DDS, is the chief editor of Dental Economics and the editorial director of the Principles of Practice Management and Group Practice and DSO Digest e-newsletters. He is also a contributing author for DentistryIQ and Perio-Implant Advisory. He lectures and writes about practice management and clinical dentistry. Additional content is available on his blog for dentists at thecuriousdentist.com. Dr. Salierno maintains a private general practice in Melville, New York. You may contact him by e-mail at [email protected].