As cuts to funding by local councils were announced yesterday, the Collect and Pay service recently rolled out nationwide by FCC Paragon to landlords and managing agents couldn't come at a better time as these changes are likely to have a knock-on effect on rental arrears.

Already proving to have more benefits than expected, in most cases allowing FCC Paragon to spot defaulting rent before it is even due, one of the first agents to use the product hailed it a success after FCC Paragon flagged up defaulting rent.

Designed to give managing agents and landlords complete peace of mind that they will receive their rent on time, every month for the duration of the tenancy regardless of whether the tenant pays or not, Darren Fawdry of TCG Residential in Cheshire was one of the first agents to use FCC Paragon's Collect and Pay product and his experience proved that it is not always tenants behind the burden of defaulting rents.

He said: "We put our first Collect and Pay application through FCC Paragon in November. The referencing was carried out quickly and the tenants moved in with no problems. The first rent was due at the end of the month. It was only when we received a call from FCC Paragon advising us that the rent hadn't actually been paid on time that we knew there was a problem. However, we still received the rent on the due date."

Managing Director, Bryn Cole said: "In this case, the payment was not set up correctly by the bank and we were able to pick this up very quickly at the point of default.

"Significantly, our system is also allowing us, in many Direct Debit cases, to see in advance if a payment is going to default.

"As proved here, the ide of the product is not only to ensure guaranteed and timely rent payment, but also for FCC Paragon to handle everything in order to reduce the administration time for the landlord or agent in dealing with arrears."

Mr Fawdry said: "FCC Paragon handled everything, they spoke with the tenant, arranged for the new Direct Debit to be set up, we didn't have to lift a finger and nor did the landlord. This situation really demonstrated that Collect and Pay is a worthwhile and valuable service to use.

"Our landlord was kept happy and we didn't have to waste our time contacting the tenant and dealing with the administration.

"Being kept up to date by FCC Paragon was a great help. I will definitely continue to use Collect and Pay and would recommend the product to any other letting agent or landlord having seen the benefits first hand."