Fair Debt in the News
Collection News
The FTC will distribute $1.6 million to thousands of consumers who were scammed into paying money they did not owe by con artists who threatened, harassed and lied to them.
In 2003, the FTC sued three companies, operating under the name National Check Control, charging them with harassing and abusing consumers, falsely threatening criminal prosecution, illegally communicating with third parties, collecting amounts that were not due, and other violations of federal laws. In 2005, the court ordered a permanent halt to their operations and ordered them to pay redress to the consumers they had bilked. The defendants, including Check Investors, Inc., Check Enforcement, Inc., Jaredco, Inc., the companies’ owner, Barry Sussman, and their corporate counsel, Charles Hutchins, unsuccessfully appealed the case to the Third Circuit Court of Appeals and the Supreme Court.
On February 7, 2008, one day after the appeals court refused to reconsider his appeal, Sussman removed from a bank safe deposit box coins valued at $335,000 that the federal court had ordered him to turn over to the FTC for consumer redress. A federal jury convicted him of two felony counts – theft of government property and obstruction of justice. In October 2009, he was sentenced to 41 months in federal prison and is currently serving his sentence.
The FTC recovered a total of $1.6 million for consumer redress. The funds will be distributed to 24,916 consumers who each lost $100 or more as the result of the defendants’ illegal actions. The consumers have been identified based on records obtained in the case. Consumers will begin to receive checks this month.
The FTC received substantial assistance in this case from the Office of the United States Attorney for the District of New Jersey, the United States Postal Inspection Service, and the Office of the New Jersey Attorney General.
The Federal Trade Commission works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftccomplaintassistant.gov or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,700 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.
2010-02-08T09:22:54-07:00
Elmhurst, Illinois — The Medical-Dental-Hospital Business Associates (MDHBA) started 2010 with a new logo (see above), new web site, and a new service for its members and the industry called “Find an Agency”.
According to MDHBA President Phil Rosenthal, CPBE, president, HealthCare Associates, Inc., Alexandria, Virginia, “The new logo was developed to focus on what MDHBA is and who its members are. Therefore, it was revised to include our new tag line, A Healthcare Receivables Management Association, while retaining the logos original ‘key look’”.
The organization also unveiled its new web site at www.mdhba.org. It features a more polished look coupled with easier, more intuitive navigation. Those browsing the site can easily find information about the organization’s various certification programs, as well as upcoming events. MDHBA members who utilize the site have access to an online directory, listserv, past meeting handouts, and much more.
MDHBA’s site also features a brand new service for its members and the industry called “Find an Agency.” This online system lets visitors search for MDHBA member agencies by state, and then provides contact information and web site links for healthcare collection agencies that are licensed to operate in each state.
The association is currently offering new agencies that join a $200 education credit toward any MDHBA educational event in 2010. To join, simply visit the web site or contact MDHBA headquarters at 630.941.8100, or by e-mail at info@mdhba.org.
Medical-Dental-Hospital Business Associates is a healthcare receivables management association. Formed in 1939, MDHBA and its members set a tone of collaboration and continuous improvement within the demanding and competitive world of healthcare financial services. MDHBA provides a nationwide forum for idea exchange, continuing education and certification. For more information, contact: MDHBA, 350 Poplar Ave., Elmhurst, IL 60126. Telephone 630.941.8100; Fax 630.359.4274; E-mail info@mdhba.org; www.mdhba.org.
2010-02-08T08:03:37-07:00
Federal Bond and Collection Service, Inc. (t/a “FBCS”) has successfully completed a SAS-70 Type II audit. The audit was conducted by Friedman LLP (www.Friedmanllp.com) in association with Holmes & Company, LLC (www.HolmesCPAS.com).
SAS70 is one of the most widely recognized auditing standards for service organizations. These standards were developed by the American Institute of Certified Public Accountants (AICPA) for audits of service organizations to evaluate control effectiveness. It provides clients with assurances regarding quality of service and data protection, and relieves institutions from the trouble and cost of performing their own audit.
The SAS70 service auditor’s report assures clients that FBCS has all the necessary controls in place regarding business processes, information technology and security. This allows clients to keep pace with their own regulatory compliance.
About FBCS
FBCS Inc. is a leading provider of a wide range of accounts receivable management and collection services. Since its founding in 1982, FBCS offers creditors and loan servicers customized solutions that are designed to improve performance throughout the revenue cycle. Headquartered in Hatboro, Pennsylvania, FBCS is located in a secure facility, with ample space for up to 250 agents. For more information, please contact Amy Stratz at 800.220.2018 or visit our website www.fbcs-inc.com
2010-02-05T07:53:02-07:00
The U.S. Department of Education (ED) recently released the first performance report rankings for its 2009 student loan debt collection contract. A performance report was also released for 2004 contractors.
In early 2009, ED awarded a new student loan debt collection contract to a total of 22 collection agencies (“ED Announces Debt Collection Contract Winners in Unrestricted Category,” Jan. 9, 2009; “Department of Education Names Small Business Collection Contractors,” March 11, 2009), five more than were on the previous contract, awarded in 2004. The vast majority of the collection agencies on the 2004 contract were retained, with most of the small business contractors moving up to the unrestricted category.
Even though both contracts are still running, all new accounts have been placed with 2009 contractors since November 2, 2009. According to ED, all accounts from 2004 contracts will be returned and and distributed to the 2009 contractors after two years.
The December performance rankings saw Pioneer Credit Recovery and NCO Group dominate among the 2009 restricted agencies with a total scores of 94.96 and 94.57, respectively. The next closest agency in the unrestricted category – reserved for large ARM firms – was Van Ru Credit Corp. with a score of 73.52.
ED’s performance scores are based on a weighted average of performance metrics, including total dollars collected, total accounts serviced and administrative resolutions. The scores are released each month, but compiled for internal scoring on a quarterly basis. Final quarterly rankings determine bonuses and account placement levels.
Through the end of December, Pioneer had collected the most for ED, with $882,052 brought in. NCO was slightly behind with a total of $827,015.
In a new line-up of collectors on the small business set aside contract, Coast Professional, Inc. demolished the competition with a total score of 85.60 and $324,837 collected. Delta Management Associates took second place in the small business category with a score of 77.70 and $258,250 collected in the first two months of the new contract.
Meanwhile, CBE Group topped the rankings among large collectors on the 2004 contracts by gaining perfect scores in two of the three performance indicator categories with a total posted score of 99.27. Pioneer and Van Ru followed for the silver and bronze.
Premiere Credit posted a perfect score of 100 on the small business set aside contract for 2004. Continental Service Group (Conserve) came in second with a score of 97.53.
The 2009 contactors have collected a total of $10.8 million in two months for the Dept. of ED, while the 2004 contract has brought in $6.9 billion in its 58 months.
2010-02-05T07:53:01-07:00
Edina, Minnesota---Northland Group, the leader in late stage third party collections, today announced its most recent recognition by the Better Business Bureau of Minnesota and North Dakota. In its newest “thank you” from the BBB. Northland Group was cited for its “tremendous support of the 2009 BBB Integrity Awards”. Lance Black, President of Northland Group stated that “It is our commitment to raise the image people have of the debt collection business, and working with the BBB in its very worthwhile quest to making us more accountable and responsible stewards of professionalism”.
Northland Group is a professional debt collection agency that services the retail, bank card, student loan and other markets nationwide. Founded in 1982, Black and his management team have grown the organization into a highly respected, innovative and competitive agency. The agency, which works with both debt buyers and card issuers, has received numerous honors and has achieved top success in a very competitive industry.
Northland Group is proud to support the activities of a group that has such positive local, state wide and national influence as the BBB; it makes business more accountable to the customer and consumer in a positive and useful way.
2010-02-05T07:53:01-07:00
The Federal Communication Commission (FCC) recently proposed stricter guidelines on telephone communications that would set debt collection efforts back decades, according to people familiar with the proposal.
Most in the industry agree that the communication habits of young adults have made it harder for account receivable management professionals to correctly identify and contact Generation Y consumers (“American Debtor Pool Undergoing Massive Demographic Shift,” Jan. 28). Debt collectors would like nothing more than to be allowed to freely use new communications platforms -- such as cell phones, text messages and social networks -- to contact the younger demographic.
But a recent proposal from the FCC removes a longstanding exemption for the ARM industry for certain rules governing the use of communication technology.
Last month, the FCC released a Notice of Proposed Rulemaking to amend the Telephone Consumer Protection Act (TCPA). The FCC said it wants current TCPA rules to conform to the Federal Trade Commission’s (FTC) recently amended Telemarketing Sales Rule (TSR).
The new TSR, which became effective in October 2008, bars the use of prerecorded telemarketing calls without a consumer’s written consent, and it requires prerecorded calls to include future opt-out options.
Adam Peterman, ACA International's government affairs director, said creditors and debt collection agencies currently are exempt from the FTC’s Telemarketing Sales Rule. But he said if the FCC’s proposed rule under the TCPA is enacted as currently proposed, the industry will suffer.
"If it goes through it would have a very negative impact on our industry," Peterman said, adding that the FCC's proposed change to the rule implementing the TCPA does not exempt creditors and collection agencies.
The FCC has yet to publish the proposed amendments to the rule in the Federal Register requesting public comment. But Peterman expects it will be published soon. He said ACA is prepared to respond.
Among other things, ACA wants to make sure that the FCC amendment to TCPA rule doesn't prohibit calls to wireless numbers and land lines in some cases, and that new regulation doesn't lead to an increase in consumer lawsuits against collection agencies.
“The rule is unclear enough right now that companies are getting sued. We need some clear guidance that relieves us of the ligation problem," he said.
Jerry Greenblatt, president of El Cajon, Calif.-based collection agency Inland Capital Services, told insideARM that his firm tries to avoid calling cell phones so consumers won’t incur a charge and the firm doesn’t violate the Fair Debt Collection Practices Act (FDCPA). But their contact information files are beginning to include more cell numbers.
“Most people are converting to cell phones and there will be fewer land lines in the future,” Greenblatt said, and speculated that 60 percent to 70 percent of the communication by young people is done though text messaging. “The industry needs to address it and be proactive on the issue. I don’t want to see legislation requiring us to go out and skip trace every number we have to verify if it is a land line or cell phones before we call it. That would make it impossible to collect.”
“When we talk to our consumers we ask for the best number to reach them as part of our information update procedures,” Greenblatt said. But he worries that their efforts may not be enough to protect his firm if the consumer moves to a different time zone, making contact-time violations under the FDCPA more likely.
“I would like to have it addressed before the industry faces multiple lawsuits on the issue,” he noted.
Peterman said ACA knows that the industry wants more clarification on the use of modern-day mediums to contact debtors. However, now is not the time to proactively seek changes to laws governing the industry, he said.
"We recognize that the FDCPA is woefully obsolete and needs modernization reforms. On the other hand, there are some pretty punitive changes that consumer groups have on their agenda and with the political climate being so turbulent right now, we are best served to sit prone, ready to respond, at least through the election cycle," Peterman said.
However, Peterman said ACA has learned that Congress may seek changes to the FDCPA. He said ACA will be prepared to respond with its proposal for changes to FDCPA.
“We are waiting for Congress to take it up on its own accord, and we will respond in kind,” he said.
Editor's Note: insideARM and ACA International will be hosting a free Webinar on the legislative and regulatory environment in the ARM industry at EXPO 3.0, February 16, 2010. To learn more about the event and to register, please visit http://www.insidearm.com/expo/.
2010-02-04T09:12:10-07:00
Fourth quarter 2009
- Consolidated revenues for the fourth quarter 2009 amounted to SEK 1,046.3 M (1,020.0), an increase of 2.6 percent. Organic growth was 1.6 percent (6.2).
- Operating earnings (EBIT) amounted to SEK 206.1 M (142.9). Revenues and earnings include net purchased debt revaluations of SEK –3.7 M (–4.0). Quarterly earnings last year were also charged with a goodwill impairment of SEK 60.7 M. Excluding these items, operating earnings (EBIT) were SEK 209.8 M (207.6), corresponding to an operating margin of 20.0 percent (20.3).
- Net earnings for the fourth quarter amounted to SEK 138.7 M (96.0) and earnings per share before dilution amounted to SEK 1.74 (1.21).
- Investments in Purchased Debt amounted to SEK 211.3 M (205.1).
Full-year 2009- Consolidated revenues for the full-year 2009 amounted to SEK 4,127.8 M (3,677.7), an increase of 12.2 percent. Organic growth was 3.9 percent (9.3).
- Operating earnings (EBIT) amounted to SEK 668.2 M (697.3). Revenues and earnings include net purchased debt revaluations of SEK –35.7 M (2.2) as well as nonrecurring items of SEK –70.1 M (–51.8). Excluding these items, operating earnings (EBIT) were SEK 774.0 M (746.9), corresponding to an operating margin of 18.6 percent (20.3).
- Net earnings amounted to SEK 440.6 M (441.7) and earnings per share before dilution amounted to SEK 5.53 (5.58) for the full-year.
- Investments in purchased debt amounted to SEK 870.6 M (871.6).
- Cash flow from operating activities amounted to SEK 1,523.2 M (1,261.3). Cash and bank at year-end amounted to SEK 491.4 M (294.3).
- The Board of Directors proposes a dividend of SEK 3.75 per share (3.50).
Comment by President and CEO Lars Wollung:
At the end of 2009 we saw evidence that our restructuring in the UK & Ireland was complete. In the fourth quarter the region reported a profit of SEK 9 M, which represents an improvement of SEK 33 M compared with the same quarter of 2008.
Activity in the purchased debt market improved at the end of 2009. We invested 211 M (205) during the quarter, and incoming cash flow exceeded our expectations by 6 percent. Operating earnings (EBIT) for Purchased Debt were 3.6 percent higher for the full-year than in 2008. This includes portfolio write-offs of SEK 36 M, against a revaluation of SEK 2 M in 2008.
We have launched a joint venture with East Capital in Russia to invest in nonperforming consumer loans. The parties each intend to invest EUR 10 M.
Margin pressure continued to affect CMS operations in the fourth quarter. The operating margin (EBIT) was 12.2 percent (13.8) during the quarter and 12.8 percent (15.6) for the full-year, adjusted for restructuring costs.
Our industry has also been affected by the global financial crisis, which launched a recession. The number of collection cases that have been turned over to legal actions has risen, which immediately raised expenses but delayed revenue. The solvency of debtors deteriorated in 2009 at the same time that average administrative times increased. The situation has stabilized, but will persist in 2010.
The Switzerland, Germany & Austria region reported a year-over-year drop in earnings of SEK 33 M during the fourth quarter. About half this amount is due to one-off items. CMS revenue from a few extraordinary large debt portfolios is beginning to decline with age. On the other hand, costs continued to increase in the last year. The region’s new management team gradually came into place in late 2009 and has begun a comprehensive improvement program aimed at higher sales and cost efficiencies. This work is expected to produce results during the second half of 2010 and have its full impact in 2011.
Efforts to increase the Group’s productivity continue at the same time that we are further improving our services.
Our strong cash flow of SEK 1,523.3 M, a low debt/equity ratio of 78 percent and a new three-year loan agreement of EUR 310 M provide a stable financial foundation that facilitates a good growth rate.
2010-02-04T08:32:45-07:00
Jim Dunbar, President of Aeox Financial Services Inc., announces the introduction of the Affirm MasterCard®, a new balance transfer credit card program - the first of its kind in Canada. *
Partnered with Peoples Trust Company, Aeox Financial Services launched the balance transfer MasterCard® and began issuing credit cards in January of this year. Aeox has two strategic debt buying partners already actively offering the card.
The primary objective of the card is to provide debt buyers and financial institutions with an alternative strategy for right party contact, cash collection and balance transfer when collecting charged off accounts.
Consumers respond well to the balance transfer offer because it provides an alternative means to resolve outstanding credit obligations while providing them a fully functional credit card, offered at competitive rates. The card offers the ability to use the transferred debt as an opening balance and new credit limit, with an ability of making payments to create open credit on the card.
The balance transfer strategy has proven to be an effective tool for debt owners in the United States for over a decade and an integral component of accounts receivable collection strategies.
About Aeox
Aeox Financial Services Inc. is a Canadian based company and is an innovator in the field of financial services. Aeox is dedicated to helping people resolve credit issues by offering competitive rate products and services that excel above the competition.
2010-02-04T08:23:18-07:00
NORFOLK, VA -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a company that purchases and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management and payments processing services, will announce its fourth quarter and full year 2009 results on February 11, 2010.
The earnings announcement, which will be released after the market closes, will be followed at 5:30 PM EST by a conference call with investors to discuss the results.
Investors can access the call by dialing 888-679-8034 for domestic callers or 617-213-4847 for international callers using the pass code 75743929. In addition, investors may listen to the call via a taped replay by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers using the pass code 42884873. The replay will be available approximately one hour after the call ends and will remain available for seven days.
Investors may also listen to the conference call via web cast, both live and archived, at the company's web site, www.portfoliorecovery.com at the Investor Relations main page.
About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates is a full-service provider of outsourced receivables management, payment processing and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables. These are the unpaid obligations of individuals to credit originators, which include banks, credit unions, consumer and auto finance companies, and retail merchants. Portfolio Recovery Associates also provides a broad range of collection services, including revenue administration for government entities through its RDS and MuniServices businesses, and collateral-location services for credit originators via IGS.
2010-02-04T08:23:18-07:00
2530ed58
2010-02-03T05:22:03-07:00
A recent ruling by an appeals court in an FDCPA case brought by a consumer raises numerous questions that may not be settled until there is further court action, according to collection legal experts.
The Second Circuit Court of Appeals held in Ellis v. Solomon and Solomon P.C that a law firm and two of its lawyers violated the Fair Debt Collection Practices Act (FDCPA), when it filed suit against a debtor during the 30-day validation period without providing additional explanation to the debtor about how the lawsuit affected the notice.
Under the law, a debt collector must send a written communication to a consumer within five days of initial contact, which alerts the consumer to his or her right to dispute the debt. The consumer has 30 days to do so. The collector can continue to pursue the debt, but the collector’s methods must not overshadow or be inconsistent with the disclosures in the notice.
In the Ellis case, the defendants sent the plaintiff a validation notice, and two weeks later served her with a summons and a complaint. In affirming a previous district court’s award of summary judgment to the plaintiff, the Second Circuit held that the validation notice was “overshadowed” where a debt collector serves a consumer with a summons and complaint during the validation period without explaining that the lawsuit has no effect on the information conveyed in the validation notice.
The courts held that even though collection agents have a right to continue their efforts to collect debts during the validation period under the FDCPA, if they do not wait until the end of the 30-day period they must explain the lawsuit’s lack of impact on the disclosures to the consumer.
Barbara Sinsley, general counsel for debt buying trade group DBA International, said that the ruling basically calls for collection firms to tell the debtor in the initial validation notice and in a separate validation notice when filing the lawsuit. However, the 30-day period still starts with the initial validation notice.
“The court is advising [collection firms] to be redundant,” Sinsley said. However, she doubted the ruling would have much impact outside of the area served by the Second Circuit, which consists of Connecticut, New York and Vermont.
A major problem with the ruling, according to Tomio B. Narita, partner with Simmonds & Narita LLP, San Francisco, Calif., is that the court didn’t specify what needed to be included in the validation notice accompanying a lawsuit. So another court case is likely to be needed to decide that. Narita, an associate member of the National Association of Retail Collection Attorneys, had filed an amicus brief for NARCA on behalf of the defendant.
“The court says you have to provide this additional notice, something that is not specified by the Fair Debt Collection Practices Act,” Narita said. “Usually when the court goes down that road, they provide Safe Harbor language. The court has left you guessing, it doesn’t tell you exactly what to do.”
Therefore, Narita advises collection firms to seek the advices of their respective attorneys in developing the wording for any validation notices to accompany lawsuits.
2010-02-03T08:16:52-07:00
Debt Purchasing
On Tuesday, Feb. 9, DBA International and Autism Speaks, an autism science and advocacy organization, will host a charity golf outing for autism support and research.
This will be the second annual autism charity outing co-hosted by DBA. It will be held at luxury golf course Shadow Creek in Las Vegas in advance of DBA's annual conference and expo; a shot gun tee will commence at 10 am.
The charity event was started by DBA board member Samir Shah. Shah has been actively involved with charities for autism since his son was diagnosed four years ago.
“Last year, with the economy being what it was and the industry being what it was, we were really under attack just like all related banking financial services. I thought maybe this would be a good idea to do something charitable,” Shah told insideARM. "I wanted to give everybody a chance to do something charitable; that everybody can participate in.
Participants are charged $1500 per golfer to attend the event.
In 2009, the event raised $38,000. It is expected to be north of $40k this year. All net proceeds will go to Autism Speaks with a small potion going to DBA.
According to Shah, the outing is primarily if not 100 percent composed of people from the industry.
Roger Knauf, executive director of DBA said, "DBA is proud to be a co-sponsor of the golf tournament to benefit Autism Speaks. We are pleased to do our part to support the collaborative efforts in the areas of science, research and epidemiology."
Autism is a neurological disorder that impairs an individual’s ability to communicate, form relationships and relate to surroundings. It affects one in every 110 children, and one in every 50 boys. Researchers indicate that more children will be diagnosed with autism this year than with AIDS, diabetes and cancer combined.
Anyone can donate to the fund. Donations should be labeled “2010 DBA Outing” and sent to:
Autism Speaks
Attention: Brian Han
5455 Wilshire Blvd Suite 2250
Los Angeles, CA 90036
2010-02-08T08:03:37-07:00
Beginning with the third quarter of 2009 to current, Global Debt Registry has established a significant presence in the receivables marketplace by registering and titling over $ 1.5 billion in transactions. Founded in 2006, GDR is the nation’s only A/R title origination and media management company.
With over 50 national, regional and state-level debt buyers and broker participants, GDR has recorded title transfers on over 350,000 accounts to participants as deep as six levels in the ownership chain. As part of its success, GDR Chains of Title are now being submitted and accepted as evidence of account-level proof of ownership in courtrooms across the nation.
“Our organization couldn’t be more excited about achieving this pivotal milestone in such a short period of time. Much of our success can be attributed to the leadership of our visionary clients. Their stewardship and interest in promoting an improved best practice for the industry enables them to leverage the short and long-term benefits of a proven third party title origination and media management company,” says Greg Ousley, CEO of Global Debt Registry.
GDR additionally delivers to its participants an enhanced and compliant account documentation management and distribution service by establishing a direct relationship with the original issuer for purposes of processing media requests from all buyers. With over two million account-level documents under management and over one million distributed to the GDR participant network in the previous 6 months, the cost savings and business advantages gained from the optimized process are substantial.
GDR is a proud member of DBA International, ACA International, National Association of Retail Collection Attorneys, and the Better Business Bureau.
For more information on the benefits of Global Debt Registry, please visit www.globaldebtregistry.com or e-mail Greg Ousley at ceo@globaldebtregistry.com.
2010-02-05T07:53:01-07:00
Fourth quarter 2009
- Consolidated revenues for the fourth quarter 2009 amounted to SEK 1,046.3 M (1,020.0), an increase of 2.6 percent. Organic growth was 1.6 percent (6.2).
- Operating earnings (EBIT) amounted to SEK 206.1 M (142.9). Revenues and earnings include net purchased debt revaluations of SEK –3.7 M (–4.0). Quarterly earnings last year were also charged with a goodwill impairment of SEK 60.7 M. Excluding these items, operating earnings (EBIT) were SEK 209.8 M (207.6), corresponding to an operating margin of 20.0 percent (20.3).
- Net earnings for the fourth quarter amounted to SEK 138.7 M (96.0) and earnings per share before dilution amounted to SEK 1.74 (1.21).
- Investments in Purchased Debt amounted to SEK 211.3 M (205.1).
Full-year 2009- Consolidated revenues for the full-year 2009 amounted to SEK 4,127.8 M (3,677.7), an increase of 12.2 percent. Organic growth was 3.9 percent (9.3).
- Operating earnings (EBIT) amounted to SEK 668.2 M (697.3). Revenues and earnings include net purchased debt revaluations of SEK –35.7 M (2.2) as well as nonrecurring items of SEK –70.1 M (–51.8). Excluding these items, operating earnings (EBIT) were SEK 774.0 M (746.9), corresponding to an operating margin of 18.6 percent (20.3).
- Net earnings amounted to SEK 440.6 M (441.7) and earnings per share before dilution amounted to SEK 5.53 (5.58) for the full-year.
- Investments in purchased debt amounted to SEK 870.6 M (871.6).
- Cash flow from operating activities amounted to SEK 1,523.2 M (1,261.3). Cash and bank at year-end amounted to SEK 491.4 M (294.3).
- The Board of Directors proposes a dividend of SEK 3.75 per share (3.50).
Comment by President and CEO Lars Wollung:
At the end of 2009 we saw evidence that our restructuring in the UK & Ireland was complete. In the fourth quarter the region reported a profit of SEK 9 M, which represents an improvement of SEK 33 M compared with the same quarter of 2008.
Activity in the purchased debt market improved at the end of 2009. We invested 211 M (205) during the quarter, and incoming cash flow exceeded our expectations by 6 percent. Operating earnings (EBIT) for Purchased Debt were 3.6 percent higher for the full-year than in 2008. This includes portfolio write-offs of SEK 36 M, against a revaluation of SEK 2 M in 2008.
We have launched a joint venture with East Capital in Russia to invest in nonperforming consumer loans. The parties each intend to invest EUR 10 M.
Margin pressure continued to affect CMS operations in the fourth quarter. The operating margin (EBIT) was 12.2 percent (13.8) during the quarter and 12.8 percent (15.6) for the full-year, adjusted for restructuring costs.
Our industry has also been affected by the global financial crisis, which launched a recession. The number of collection cases that have been turned over to legal actions has risen, which immediately raised expenses but delayed revenue. The solvency of debtors deteriorated in 2009 at the same time that average administrative times increased. The situation has stabilized, but will persist in 2010.
The Switzerland, Germany & Austria region reported a year-over-year drop in earnings of SEK 33 M during the fourth quarter. About half this amount is due to one-off items. CMS revenue from a few extraordinary large debt portfolios is beginning to decline with age. On the other hand, costs continued to increase in the last year. The region’s new management team gradually came into place in late 2009 and has begun a comprehensive improvement program aimed at higher sales and cost efficiencies. This work is expected to produce results during the second half of 2010 and have its full impact in 2011.
Efforts to increase the Group’s productivity continue at the same time that we are further improving our services.
Our strong cash flow of SEK 1,523.3 M, a low debt/equity ratio of 78 percent and a new three-year loan agreement of EUR 310 M provide a stable financial foundation that facilitates a good growth rate.
2010-02-04T08:32:45-07:00
Jim Dunbar, President of Aeox Financial Services Inc., announces the introduction of the Affirm MasterCard®, a new balance transfer credit card program - the first of its kind in Canada. *
Partnered with Peoples Trust Company, Aeox Financial Services launched the balance transfer MasterCard® and began issuing credit cards in January of this year. Aeox has two strategic debt buying partners already actively offering the card.
The primary objective of the card is to provide debt buyers and financial institutions with an alternative strategy for right party contact, cash collection and balance transfer when collecting charged off accounts.
Consumers respond well to the balance transfer offer because it provides an alternative means to resolve outstanding credit obligations while providing them a fully functional credit card, offered at competitive rates. The card offers the ability to use the transferred debt as an opening balance and new credit limit, with an ability of making payments to create open credit on the card.
The balance transfer strategy has proven to be an effective tool for debt owners in the United States for over a decade and an integral component of accounts receivable collection strategies.
About Aeox
Aeox Financial Services Inc. is a Canadian based company and is an innovator in the field of financial services. Aeox is dedicated to helping people resolve credit issues by offering competitive rate products and services that excel above the competition.
2010-02-04T08:23:18-07:00
NORFOLK, VA -- Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), a company that purchases and manages portfolios of defaulted consumer receivables and provides a broad range of accounts receivable management and payments processing services, will announce its fourth quarter and full year 2009 results on February 11, 2010.
The earnings announcement, which will be released after the market closes, will be followed at 5:30 PM EST by a conference call with investors to discuss the results.
Investors can access the call by dialing 888-679-8034 for domestic callers or 617-213-4847 for international callers using the pass code 75743929. In addition, investors may listen to the call via a taped replay by dialing 888-286-8010 for domestic callers and 617-801-6888 for international callers using the pass code 42884873. The replay will be available approximately one hour after the call ends and will remain available for seven days.
Investors may also listen to the conference call via web cast, both live and archived, at the company's web site, www.portfoliorecovery.com at the Investor Relations main page.
About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates is a full-service provider of outsourced receivables management, payment processing and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables. These are the unpaid obligations of individuals to credit originators, which include banks, credit unions, consumer and auto finance companies, and retail merchants. Portfolio Recovery Associates also provides a broad range of collection services, including revenue administration for government entities through its RDS and MuniServices businesses, and collateral-location services for credit originators via IGS.
2010-02-04T08:23:18-07:00
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2010-02-03T05:22:03-07:00
NORFOLK, VA -- Mark Johnson and Portfolio Recovery Associates, LLC, a wholly owned subsidiary of Portfolio Recovery Associates, Inc. (NASDAQ: PRAA), are happy to announce that a mutually agreeable resolution to the lawsuit filed by Mr. Johnson has been reached. Any accusations that have resulted from this misunderstanding are unfortunate and regrettable. After carefully considering all of the circumstances, the parties have decided to put the matter behind them.
About Portfolio Recovery Associates, Inc.
Portfolio Recovery Associates is a full-service provider of outsourced receivables management, payment processing and related services. The Company's primary business is the purchase, collection and management of portfolios of defaulted consumer receivables. These are the unpaid obligations of individuals to credit originators, which include banks, credit unions, consumer and auto finance companies, and retail merchants. Portfolio Recovery Associates also provides a broad range of collection services, including revenue administration
2010-02-03T07:52:40-07:00
MKS Financial Services, Inc. announces the launching of collection operations in Euless, Texas.
Starting operations in December 2009, MKS Financial will continue to leverage the experience of its senior management team to become a top tier accounts receivables management firm serving the US ARM industry. The Company has already started collecting for two United States debt buyers and a Payday Lender.
The Company is led by Larry Smith, President and Chief Operating Officer. Prior to launching MKS Financial, Smith led the successful implementation and operation of Nearshore Receivables Management, Inc., a US based national collection company operating a call center in Mexico serving the US market.
"We are extremely excited to have Larry on board and in charge of our operations", said Gene McKenzie, Chief Executive Officer of MKS Financial. "His 25 years of experience in the collection and SPO industries will serve MKS Financial well as we launch and grow The Company. He is a great addition to our leadership team and no doubt will help the Company achieve its goal of being a leader in serving the Debt Buying and Financial Services Industries."
About MKS Financial
MKS Financial Services, Inc. is a nationally licensed professional debt collection agency located in Euless, Texas. The Company provides third party, first party and receivables management outsourcing services to the Debt Buying and Financial Services Industries. Founded by a Management team that includes 72 years of experience in collections, business process outsourcing and call center industries, MKS Financial is focused on delivering operational excellence and competitive results while maintaining the highest ethical standards. The Company is committed to performing for our clients, driving continual operational improvement and personal and professional growth for our employees.For more information visit www.mks-financial.com.
2010-02-03T07:52:40-07:00
HOUSTON, TX -- In 1999, Marion Financial Corp. established an annual scholarship for participants in the accounts receivable management industry. The goal of the scholarship program is to assist with funding the education of employees, or the children of employees, who work in the accounts receivable management industry. Since its inception, scholarships have been awarded to 23 students.
“With the ever-increasing cost of college tuition, I feel it is time to again increase the amount of the scholarships now totalling $10,000,” stated Tom Edens, President of Marion Financial Corp. Therefore, the 2010 scholarships will consist of two grants of $5,000 each (formerly $4,000 each) to graduating high school seniors who wish to pursue further education.
To be eligible, the student must be an employee or the child of a parent who is employed in the accounts receivable management industry (U.S. companies that are collection agencies, debt buyers, receivable outsourcing companies & trade associations that directly apply to the credit & collections industry).
Eligible employees or their children may review the rules and print a copy of the scholarship application at http://www.marionfinancial.com. For more information, contact Jill Mussman, Marion Financial Scholarship Committee by phone at (713) 988-8000 ext. 10, or mussman@marionfinancial.com. Applications must be postmarked by March 31, 2010.
2010-02-02T07:34:22-07:00
Overall economic confidence eroded in the accounts receivable management industry late last year, according to the results of insideARM’s Quarterly Credit & Debt Collection Industry Confidence Survey.
The ARM Confidence Index slipped nearly 5 percent to 60.2 in the Winter 2010 survey, compared to the results in Fall 2009. But the Winter 2010 reading was much better than the 53.7 recorded in Winter 2009, the lowest Index reading to date.
In the most recent survey, conducted January 11-22, ARM professionals grew increasingly dubious of a 2010 recovery, expressing concerns that weak collection performance will persist throughout the year. When asked to rank what they expected their company’s performance to be six months from now on a scale of 1 to 5, collection agency respondents answered with an average of 3.64, down from 3.78 in the Fall 2009 survey. ARM professionals registered a similar drop in expectations for performance 12 months down the road.
An optional question near the end of the survey helped to shed a little light on the pessimism of ARM professionals. When asked, “Do you think the U.S. economy will recover in 2010?” only 7.7 percent of collection agency professionals answered “Yes.” Triple that total (23.1 percent) said that the economy would not recover at all. Nearly 60 percent opted for a middle, but still unfavorable option (“GDP will be higher, but unemployment will remain above 9%”).
Some of the comments attached to the question were revealing:
“We will see the Economy be stable in the first 3 months and expect another short term double dip recession to happen.”
“I believe we are headed for Depression, starting 2nd half 2010.”
“Some recovery but no drastic change.”
“We are calling current times the "new now" and planning based on that.”
“I believe we have only seen the beginning of the drop in our economy.”
Collection performance was roughly flat from the Fall 2009 survey. ARM professionals reported an average collection performance score of 3.10 (on a scale of 1 to 5) in the 4th quarter of 2009, compared to an average score of 3.13 in the 3rd quarter of 2009.
On the positive side, the ARM industry seemed to be one of the few sectors that was adding jobs.
When asked if their companies added positions in the fourth quarter of 2009, 46.5 percent of collection agency professionals indicated that their company had added jobs. In addition, 52.8 percent of collection agency respondents expect their companies to be larger in six months.
Less than 20 percent of ARM companies anticipate laying off workers over 2010.
Increased payment arrangements continues to be the most popular collection strategy shift in a difficult collection environment, with 66.3 percent of ARM reporting an increase in payment arrangements. Debt buyers were the most common company type to deploy payment arrangements as 69 percent of debt buyer respondents indicating that they had tried more in the 4th quarter.
To view the full results of the Winter 2010 Confidence Survey, please visit http://www.insidearm.com/go/confidence-survey/winter10.
2010-02-02T07:34:21-07:00
PALATINE, Ill.-- Glass Mountain Capital LLC and its collection arm GMC Credit Services, an increasingly leading provider of debt recovery services announced the relocation of its headquarters to a larger facility at 1930 Thoreau Drive, Suite 100, Schaumburg, Illinois. GMC Credit Services recovers delinquent receivables on behalf of its credit issuer and debt buyer clients in the financial industry.
The new headquarters facility includes approximately 13,000 sq. ft. of office space which can easily accommodate up to 150 agents, and first right of refusal on an additional 15,000 sq. ft. In order to maximize efficiency, the new facility will house Glass Mountain Capital's corporate headquarters, GMC Credit Services' operations center, training facility and back office functions in one convenient location.
Kevin Polk, Chief Operating Officer commented "The new location provides us the facilities that Glass Mountain needs to keep our team highly motivated and productive, expand our client base and give our clients' the confidence that their customers' data is secure. We are currently undergoing our SAS 70 Type II Certification and already achieved our PCI certificate. Our time tested policies and the new facility's security features will make audits go by smoothly."
About the Company:
GMC Credit Services is a nationally licensed collections agency. Learn more about Glass Mountain Capital LLC's debt management offerings at www.glassmountaincapital.com
2010-02-02T07:34:21-07:00
Consumer / Retail
The UK consumer credit market saw a further decline in gross lending in Q3 2009 after a moderate improvement in the previous quarter. This latest edition of Datamonitor''s quarterly outlook series discusses recent developments in the consumer credit market and provides updates forecasts for the period 2009-2013.
Scope
- Provides the latest market sizing data for the UK consumer credit market.
- Covers a variety of consumer credit lines - unsecured personal loans, credit cards, overdrafts, retail finance and motor finance.
- Uses the latest developments in the UK economy in order to build up three forecast scenarios that extend to 2013.
- Includes a complementary interactive Excel model.
Highlights
Gross lending levels declined in the third quarter but the annual decline remained steady between the second and third quarters. Year-on-year gross lending declined by 12.7% in Q3 2009. Meanwhile balances outstanding saw their first annual decline since prior to 1994, falling 3.3% on a yearly basis.
Unsecured personal loans saw a yearly decline of 38% in the third quarter. The particularly poor performance of unsecured personal loans can be attributed to a greater aversion among lenders and borrowers towards high risk unsecured loans. This is reflected in the high rates being offered by lenders, despite the low base rate and Libor rates.
The Department for Business Innovation & Skills has launched a consultation on store and credit cards for its review of credit card borrowing. The concern is that while consumers are turning to these products because they offer an easy source of funds for those with access to them, those applying for them may be unsure of what they entail.
Reasons to Purchase
* Review the market performance in Q3 2009 and use it as a benchmark to evaluate your own performance.
* Use Datamonitor''s market forecasts to plan your future strategy with confidence.
* Understand how the credit crunch has affected the behavior of borrowers, lenders and the government and the impact on the overall economy.
To know more and to buy a copy of your report feel free to visit : http://www.bharatbook.com/detail.asp?id=129976&rt=UK-Consumer-Credit-Market-Outlook-Q3-2009.html
2010-02-02T07:34:22-07:00
Recent research on healthcare showed a startling shift in the American populace, especially among young people: incomes are plummeting for those just starting out. Combined with new communications habits, accounts receivables management experts believe the shift may be permanent.
Young adults have the highest uninsured rate of any group in the United States, with some 30 percent of the group going without health coverage. Industry experts have long said that the growth of health care costs would slow down or decline if young adults get insurance. But a new Kaiser report on uninsured young adults shows that the majority of uninsured 19-to- 29 year olds can’t afford coverage.
Although the report says the majority of uninsured young adults are employed, it also notes that many uninsured young adults work in low wage jobs and for employers who offer limited or no health care coverage. More than half live in households with incomes below 150 percent of the federal poverty level: less than $17,000 for an individual and $22,000 for a family of two. Meanwhile, the average employee cost for individual coverage rose from $334 in 2000 to $779 in 2009. Only nine percent of young adults with incomes near $45,000 -- at or above 400 percent of the poverty level -- are uninsured.
“Without insurance coverage, these young adults risk both their physical health and their financial security,” the Kaiser Foundation said.
With many young adults already struggling to pay everyday expenses, the findings by Kaiser should give debt collection professionals reason to pause. The report says that uninsured young adults are twice as likely as those with private insurance to have no education beyond high school, which limits their future earnings potential. Other unrelated factors also point to a new reality for today’s young Americans.
After the fallout of the financial crisis in 2008, tighter credit standards will likely make it harder for many young adults to finance post graduate education or obtain loans for real assets, such as a home.
And in the mobile society of cell phones and text messaging, collection professionals will find it even more difficult to match the right debtor with the debt owed.
^pullquote"40 percent of the consumers [we work] with don’t have landlines." - Tim Smith, senior vice president of collections for Firstsource Solutions. ("Text Messaging As the Next Frontier in Collection Communication")pullquote^
“A cell phone has become, in many instances within this age bracket, the only phone number and access point for creditors to their debtors,” said Michael Lamm, an associate with ARM advisory firm Kaulkin Ginsberg, a sister company to insideARM. “Younger debtors are mobile and their situations are constantly changing which is why it is important to think strategically about how you find and contact them."
Lamm said he expects more sophisticated profiling systems to be developed to help collection agencies target those accounts where there is an active cell phone and information from credit bureau reports to determine if the individual has applied for new credit, has a new address or phone number. For example, a recent college graduate who got sick and racked up medical debt may have returned to his parents’ home to live.
“The last address or home number that is noted on the Credit Bureau Report may lead you to him,” Lamm said.
But collectors also will need to dig and think strategically about the debtors’ life cycle pattern, taking into account the individual’s age, school loans, medical bills that are on credit report, and last address that was consistent for more than 5 years to identify and track the debtor.
Mark Neeb, president of The Affiliated Group, told insideARM that the company does not segment its debtor accounts according to consumer age groups. Nonetheless, the firm is preparing for the way younger adults like to communicate and do business. The Rochester, Minn.-based collection agency recently added an online system that allows customers to pay at their convenience, even if that’s at 2 a.m., he said. The system soon will allow customers to negotiate settlements and make payoffs online, rather than deal with an agent.
“We have a constant desire to make it easier and more convenient for the consumer to pay,” Neeb said. “The guys who only write checks are going away. I think younger consumers expect all the electronic conveniences there are and get frustrated when they don’t exist.”
Neeb said collection agencies have to remember that there likely are other collectors working with the consumer and given a choice, consumers will work with the agency that allows them to interact in a way that’s convenient and comfortable for them.
“We have to keep in mind that the consumer is the boss and we have to work with them the way they expect and the way that works best for them,” Neeb said.
Lamm said texting, email, and social media networks such as Facebook and Twitter will likely play an even bigger role in how the industry identifies and contacts debtors. But he expects them to be challenged by pro-consumer groups who are concerned about their privacy being violated.
“There’s likely to be some cost up front to ramp up, but over a period of time, it will be a more efficient way to communicate with debtors,” Lamm said.
2010-01-28T08:31:50-07:00
CHICAGO, IL - With less than one month before key provisions of the Credit CARD Act go into effect on February 22, financial services firms need to finalize their internal processes to ensure they comply with the rules released by the Board of Governors of the Federal Reserve System. TransUnion is the only credit bureau that offers two models -- Income Estimator and Debt-to-Income Estimator -- that predict a consumer's ability to pay as required under the final rule released by the Board of Governors on January 12 pursuant to the Credit CARD Act.
This Official Staff Interpretation of the final rule states that card issuers may use "empirically derived, demonstrably and statistically sound models that reasonably estimate a consumer's income or assets" to assess a consumer's ability to pay. The rule itself states that "reasonable policies and procedures to consider a consumer's ability to make the required payments include a consideration of at least one of the following: the ratio of debt obligations to income; the ratio of debt obligations to assets; or the income the consumer will have after paying debt obligations."
"TransUnion's income-related solutions can assist financial services firms in evaluating a prospective consumer's income, assessing their current obligations and predicting their ability to pay," said Steve Sassaman, executive vice president of TransUnion's financial services group. "The consideration of a consumer's income and debt obligations, as part of consideration of the ability to pay, is a new element of the rules and these criteria may be met when using both Income Estimator and Debt-to-Income Estimator to segment populations and assist in the assignment of appropriate credit lines and offers."
When considering a consumer's income or assets and current debt obligations, a creditor is permitted to rely on information provided by the consumer or information in a consumer's credit report. The Income Estimator solution can help financial service firms:
- Estimate income when income is not supplied by the consumer as well as validate consumer-supplied data and previously captured consumer income.
- Reassess existing customer income and ability to pay in an account management environment.
- Segment the optimal populations for which consumer income or consumer proof of income should be requested.
A card issuer also may consider the consumer's current obligations based on information provided by the consumer or in a consumer report. The Debt-to-Income Estimator provides an estimate of the ratio of debt obligations to income, and can be utilized to consider a consumer's ability to make required payments.
Both TransUnion models are available for batch and online delivery and are available as a credit report add-on, reducing the likelihood that an issuer will need to undertake a major systems integration effort.
"We are pleased that the Federal Reserve Board agreed with TransUnion's position articulated in our written comments to the Board related to income and debt-to-income information, as well as privacy issues in its final rule," said Sassaman. "However, achieving compliance with the Credit CARD Act by leveraging Income Estimator and Debt-to-Income Estimator is just the first of many strategies the industry must implement to help mitigate future risk, protect existing customers, foster loyalty and expand their business opportunities under the new Act's framework."
More information on the Credit CARD Act's potential impact, possible approaches and solutions for the industry as well as information on Income Estimator, and Debt-to-Income Estimator can be found at www.transunion.com/business or by contacting Jason Laky of TransUnion's financial services group at jlaky@transunion.com.
About TransUnion
As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion has employees in more than 25 countries on five continents. www.transunion.com/business
2010-01-28T07:09:14-07:00
Las Vegas, NV -- The United States Organizations for Bankruptcy Alternatives (USOBA), a trade association dedicated to the advancement of consumer protection in the debt settlement industry, announced that two of its executives will speak at the Annual Debt Buyers’ Association (DBA) International Conference in Las Vegas, Nevada. The conference, which brings together leaders from all facets of the debt settlement, negotiation and buying industries, will be held at the Mirage Resort & Casino February 9 -11, 2010.
USOBA Executive Director Jenna Keehnen and Legislative Chairperson John Ansbach will participate in a panel discussing the relationship between the debt settlement industry and the debt buying industry. Keehnen and Ansbach will discuss the interrelated relationship the two industries share, and the benefits of working together.
The DBA International Conference is a forum for experienced, knowledgeable and ethical participants of the debt buying industry. Conference attendees include key players within the debt buying industry, including representatives from credit issuers and collection companies.
“We are excited to share a fair and balanced look at the debt settlement industry with the debt buying industry,” said Keehnen. “This is an excellent opportunity to educate debt buyers about our industry, and discuss ways we can work together to provide ethical and necessary debt relief options for consumers.”
Keehnen continued, “With unprecedented numbers of consumers facing financial difficulties, working together will streamline the collection and recovery process for these hardworking individuals and families.”
Conference attendees can submit a question to the panel by simply clicking on the designated link at http://www.dbainternational.org/events/annual-conference/2010/agenda.asp.
About DBA International
Debt Buyers’ Association International is a source of experienced, knowledgeable, and ethical industry participants that provides educational and networking opportunities through an annual conference. DBA International promotes the debt buying industry at conferences, and represents its memberships to Federal and State agencies and supports the industry in Appellate cases of significance. By providing products, services and education to its members, DBA International strives to enhance the economic performance and liquidity of the international financial services industry and to cultivate the ability of consumers to participate in the marketplace for goods and services.
About USOBA
The United States Organizations for Bankruptcy Alternatives (USOBA) is dedicated to providing its member companies with important, industry-related information, including compliance requirements, as well as advocating on behalf of its membership for fair and appropriate industry regulation that maintains the utmost in consumer protection. USOBA members are provided a USOBA State Law Summary guide, the only one of its kind in the industry, to better ensure and promote national compliance. This guide contains the laws and regulations, state by state, and has been reviewed by regulators and legislators. For further information, please visit www.usoba.org.
2010-01-27T07:41:16-07:00
Positive signs are starting to emerge that suggest the labor market is rebounding. This is of great importance to U.S. recovery mangers and collection professionals.
The rate of job losses is slowing down. According to the latest employment report released earlier this month, in just nine months the U.S. economy has gone from losing two million jobs a quarter to one-tenth that rate -- a 90% improvement. This is the fastest improvement since at least the mid-1970s. Layoffs have also fallen back down to pre-recession levels, decreasing by more than 75% from their peak in early 2009.
Digging past the headlines, we find that first time unemployment insurance claims actually increased by 36,000 to 482,000 in the week ending January 16, rather than the expected drop of 4,000. This increase is inconsistent with positive jobs growth and, on the surface, may be concerning for ARM professionals because one of the biggest challenges of a recovering economy is increased jobs. Some speculate that the rise in claims in January is due to a processing backlog during the holidays and budget strains on state and local governments, which make sense.
I don’t think we are out of the woods yet. While job loss totals have tapered off from the worst points of this recession early last year, the unemployment rate remains at 10 percent and increases in first time claims may cause this rate to increase. The ARM industry really needs to see two consecutive quarters of flat unemployment for recovery managers and collection professions to be in a position to accurately and consistently forecast improvements in their liquidation results. A drop would be even better.
2010-01-26T07:19:00-07:00
FORT WORTH, Texas -- With credit card reform legislation taking effect in February, middle-class Americans are already making important changes in the ways they use their cards with a focus on reducing debt, according to the latest results of the First Command Financial Behaviors Index™.
The Index’s December survey reveals that 32 percent of Americans say they are using their credit cards less than they were a year ago, and only 11 percent of respondents say they have increased their usage of credit cards – continuing a trend toward more responsible finances that has emerged during the recent economic turmoil.
“The consumer protections of the Credit Card Act of 2009 are coming into existence at a time when many Americans have already taken positive steps to ensure their own financial well being,” said Terri Kallsen, CFP® and executive vice president of strategic development at First Command Financial Services, Inc. “Changes in credit card usage are an important indicator of a larger yearning to reduce consumer debt. In effect, many Americans have enacted their own reform program by keeping their cards in their wallets.”
Many Americans who are aware of the credit card reform legislation going into effect in February are making changes to their credit card usage now in ways that attempt to reduce their debt. They are:
- Using their credit card less (22 percent)
- Paying more of their balance each month (15 percent)
- Paying off their balance in full each month (15 percent)
- Permanently paying off all their credit cards (13 percent)
Credit card reform is shaping up as a non-event at First Command Bank, which has built its credit card business on low-rate, no-fee products. David White, president of First Command Bank, said “none of the reforms will affect the terms of our credit card products. Thanks to our affiliation with a financial planning company, we are serving financially-responsible customers with historically low default rates. Since we have lower losses than other card issuers, we can afford to assess lower rates and fees.”
December marks the end of a tumultuous year in which the majority of Americans (61 percent) reported that they noticed potentially costly changes to their credit cards. These changes include:
- increased interest rates (40 percent)
- increased late fees (20 percent)
- decreased credit limits (17 percent)
- added late fees (11 percent)
“These changes occurred at a time when many Americans were adopting more frugal financial habits, such as reducing spending and cutting debt,” Kallsen said. “The trend toward frugal living continues even as Americans express renewed optimism about the economy.”
In December, 40 percent of survey respondents stated that the economy had hit rock bottom and was on its way to recovery, up strongly from 35 percent in November. In looking at a comparison of Americans’ personal financial situation, 27 percent said they are better off than one year ago, up five points from December 2008. And though 40 percent of Americans say they are worse off than one year ago, that figure represents an eight-point drop from December 2008, when nearly half of respondents reported they were worse off than the previous year.
“This change in consumer confidence corresponds to the economy‘s gradual rebound and expansion from the previous year,” Kallsen said.
About the First Command Financial Behaviors Index™
Compiled by Sentient Decision Science, LLC, the First Command Financial Behaviors Index™ assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 3.1 percent with a 95 percent level of confidence. www.firstcommand.com/research
About Sentient Decision Science, LLC
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index™. Sentient is a full-service market research firm with special vertical expertise within the financial services industry. Sentient specializes in advanced research design and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through personalized financial plans that emphasize accumulating wealth while reducing risk, First Command Financial Advisors have established lasting relationships with hundreds of thousands of client families since 1958.
2010-01-22T08:37:17-07:00
AUSTIN, Texas - Collins Financial Services, Inc., a leader in the acquisition, recovery, and resale of charged-off consumer debt portfolios, announced today the rebranding of the business under the name Precision Recovery Analytics, Inc. Capitalizing on more than fourteen years of excellence in the Accounts Receivable Management (ARM) industry, the new name better reflects the transformation of the Company to an analytics and technology-driven, multi-channel debt recovery platform.
Robert DiGennaro, chief executive officer of Precision Recovery Analytics, said, “Under the Precision Recovery Analytics brand, we will continue Collins Financial’s great heritage of integrity, compliance and innovation that started under Walt Collins. Our rebranding communicates our vision of being a best-in-class debt buying company focused on achieving a high level of profitable growth.”
“Precision Recovery Analytics enters 2010 with considerable strength and potential. The experienced management team assembled over the past few years has invested significant resources to capitalize on the wide range of attractive opportunities in the ARM industry. As a result, we are exceptionally positioned for revenue and profit growth over the next several years, and we look forward to a successful future,” Mr. DiGennaro concluded.
Mr. Collins, who continues to serve on the Company’s Board of Directors, said, “Our Company was founded to forge strong relationships with clients and provide them with the confidence that they are dealing with a leading-edge company that shares their values as it works to enhance the value of their business. As Precision Recovery Analytics, that tradition will continue.”
Precision Recovery Analytics’ recovery affiliate, Paragon Way, Inc., will continue to operate under its current name.
Precision Recovery Analytics, Inc.
Precision Recovery Analytics is a leader in the acquisition, recovery and resale of portfolios of defaulted consumer receivables that have been charged off by the original creditors. The Company combines innovation, the highest standard of compliance, and complete integrity in its business transactions. Based in Austin, Texas, Precision Recovery Analytics over the past fourteen years has purchased consumer debt portfolios with a face value of $7 billion. For additional information about Precision Recovery Analytics, please call (512) 347-1492, toll-free (800) 570-5007, or visit the Company’s website at www.precisionrai.com.
2010-01-19T09:15:43-07:00
SCHAUMBURG, Ill. -- Western Sierra Acceptance Corp., a consumer lender based in Northern California that specializes in automotive financing, has entered a new business relationship with Experian Automotive to provide credit prescreen services to auto dealers, helping them more easily and effectively market to and finance consumers. Using Experian's credit prescreening service, iScreen(SM), enhances Western Sierra's wide range of automotive services available to help bring more qualified customers into the showroom.
Western Sierra works with marketing agencies and dealers to provide mailing lists of consumers most suitable for their automotive finance offers. Experian® will now provide its iScreen credit prescreening service to Western Sierra to help Western Sierra's customers rapidly conduct direct-mail campaigns that reach consumers most likely to qualify for credit incentives a dealer is offering. This collaboration comes at a time when direct marketing is expected to become an even more important way to drive dealer business in today's challenging marketplace.
"The basis for success of any dealer's direct-marketing campaign is reaching consumers who will be qualified to take advantage of the incentives being offered," said Daniel Ridley, CEO of Western Sierra. "We are excited to work with Experian Automotive to bring the strength of Experian's data to the marketing services we provide nationally to dealers and their agencies."
Experian's prescreening services bring together the information that matters most when it comes to identifying the most creditworthy consumers based on up-to-date credit data supplied through a fast and easy online ordering process. The stratified mailing lists pinpoint prospects most likely to be profitable for an automotive finance campaign.
"As the auto finance market begins to show signs of stabilization, dealers who are able to connect with those consumers most qualified for their offers will hold the advantage," said Scott Waldron, president of Experian Automotive. "Pairing Experian's prescreen capabilities with Western Sierra's established presence in the auto lending space makes sense for any dealer or agency striving to maintain and increase response to their campaigns."
For more information on Western Sierra's services for agencies and dealers, visit http://www.wsacc.com. To learn more about Experian Automotive's information services for dealers and agencies, go to http://www.experianautomotive.com.
About Western Sierra Acceptance
Western Sierra Acceptance is a consumer finance company that specializes in auto finance. The company is owned and managed by individuals with more than 20 years in the industry. In addition to auto finance, Western Sierra also offers a number of credit data services to many national automotive marketing agencies. For more information, visit their Web site at http://www.wsacc.com/aboutus.html.
About Experian Automotive
Experian Automotive, a part of Experian, delivers information services to manufacturers, dealers, finance and insurance companies, and consumers. Experian® helps automotive clients increase customer loyalty, target and win new business, and make better lending and vehicle purchase decisions. Its National Vehicle Database, housing more than 625 million vehicles, along with Experian's credit, consumer and business information assets, meet the industry's growing demand for an integrated information source. Experian's advanced decision support services help clients turn this information into improved business results. Experian technology supports top automotive businesses, including eBay Motors, CarsDirect.com, CarMax and NADAguides.com. For more information on Experian Automotive and its suite of services, visit our Website at http://www.experianautomotive.com.
About Experian
Experian is the leading global information services company, providing data and analytical tools to clients in more than 65 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2009, was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and Sao Paulo, Brazil.
For more information, visit http://www.experianplc.com.
2010-01-14T08:19:52-07:00
While the largest lenders tend to draw the most interest from collection firms, there could be more business from community banks if a current campaign by the Huffington Post proves to be successful.
The Huffington Post campaign, supporting MoveYourMoney.info, is encouraging consumers to move their business out of Goldman Sachs, Morgan Stanley, JP Morgan/Chase, Citibank, Bank of America and Wells Fargo “all of which took billions in taxpayer money and have cut lending to businesses by $100 billion,” according to the publication, which appeals primarily to a liberal audience.
However, publication founder Ariana Huffington writes the idea is “Neither Left nor Right -- it's populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It's time for Americans to move their money out of these reckless behemoths. And you don't have to worry, there is zero risk: deposit insurance is just as good at small banks -- and unlike the big banks they don't provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion.”
The idea has attracted interest via social media: Facebook users became fans of the project -- over 7,000 in seven days -- and started sharing their stories through the Move Your Money fanpage as well as the Huffington Post page.
However, it would take a large shift of business from large to smaller financial institutions to make much of a difference. The handful of financial institutions the campaign is targeting control more than 50 percent of U.S. financial institution assets.
Even so, trade groups representing the financial institutions most likely to benefit from such a campaign have responded favorably.
“The bank executives who make the decisions on how to use the earnings from your money, whether it be to pay management bonuses or to invest in sub-prime mortgages, will probably know little about you or your community,” wrote Berdell Knowles, Jr., economic development consultant with the Community Development Bankers Association in a follow-up blog. “However, consumers who choose community banks are bringing their economic power to bear on their own local economy. According to Jeannine Jacokes, CDBA chief executive and policy advisor, ‘Community banks and community development banks, as the name implies, have a mandate to specifically serve and invest in their own community.’ As someone who has worked across all spectrums of the financial services industry over the past 14 years, in both global and community banking, I believe every citizen in every community has an obligation to support his/her community bank, and to make sure the bank fulfills its mission in their community.”
According to Knowles, a community bank might be in a better position to evaluate a borrower's creditworthiness when there are extenuating circumstances with a familiar customer. In some cases, bank officers may be personally familiar with a borrower's history, his community, and the economics of a deal that may mitigate bank risk. And finally, community banks have access to capital designated for specific economic development activity that global banks may not, like the 3 percent TARP funds for Small Business Lending the Treasury Department announced its plans to offer to banks with under $1 billion in assets.
According to the Dan Mica, CEO of the Credit Union National Association (CUNA), “consumers are already voting with their wallets in favor of credit unions.” CUNA data show credit unions are on pace to post 2 percent membership growth in 2009--"the fastest rate we have seen since 2001 and double the rate of U.S. population growth," Mica wrote in his blog.
Moving to credit union "makes perfect sense," he wrote, citing credit unions' structure and service orientation, their better rates and lower fees, and the amount consumers have saved by using credit unions--$9.2 million, or $104 per member and $198 per family.
“In today's turbulent economy, credit unions' cooperative business model has renewed relevance for American consumers,” Mica added. He referred to a statement from Rep. Barney Frank (D-Mass.), who said that if other financial institutions behaved like credit unions and small community banks, the mortgage meltdown would never have happened.
2010-01-13T08:07:02-07:00
Total consumer credit in the United States fell at an annual rate of 8.5 percent in November, a record rate for any single month. Credit card debt contraction led the way.
The Federal Reserve said late Friday in its monthly consumer credit statistical release (G.19) that revolving debt, most commonly credit card accounts, dropped at an 18.5 percent annual rate, the most ever by far. Credit card debt fell by $13.7 billion in the month to $874 billion.
November marked the 14th consecutive month for credit card debt contraction. Since September 2008, more than $101 billion in credit card debt has been wiped off the books of credit issuing banks.
Non-revolving debt, like that found in auto, student and personal loans, declined by $3.8 billion, or at an annual rate of 2.9 percent.
The Fed’s G.19 report does not include debt backed by real estate.
Total consumer credit outstanding in the U.S. now stands at $2.464 trillion, down from a high of $2.581 trillion in July 2008.
2010-01-11T07:44:55-07:00
WASHINGTON – Consumer loan delinquencies fell in seven loan categories, marking the first time since 2007 that so many loan categories experienced declines, according to the American Bankers Association’s Consumer Credit Delinquency Bulletin. The composite ratio, which tracks eight closed-end installment loan categories, fell 12 basis points to 3.23 percent of all accounts compared to 3.35 percent of all accounts in the previous quarter. Bank card delinquencies fell 24 basis points to 4.77 percent of all accounts. The ABA report defines a delinquency as a late payment that is 30 days or more overdue.
ABA Chief Economist James Chessen said the news was positive, but the weak economy and job losses continue to weigh on consumers.
“Delinquencies may be near their peak as job losses have slowed. Consumers are working hard to get their financial houses in order by spending less, saving more, and paying down debt. But there’s still a bumpy road ahead with many people unemployed and family budgets stretched to their limits,” Chessen said. (See Economic Charts.)
Chessen also attributed the lower delinquency rates to banks writing off bad loans.
“Banks are putting losses behind them, setting the stage for expanded lending to consumers as the economy recovers,” he said.
Auto loans showed continued improvement. Direct auto loan delinquencies fell nearly half a point to 2.04 percent of all accounts and indirect auto loan delinquencies (arranged through auto dealers) dropped to 3.15 percent of all accounts compared to 3.26 percent of all accounts in the previous quarter.
“It’s always a good sign when delinquencies decline, but they’re still relatively high,” Chessen said. “Until the economy generates more jobs and the housing sector stabilizes, they’re likely to stay that way.”
Housing-related loans continued to show stress. Home equity loan delinquencies hit another record, jumping 29 basis points to 4.30 percent of all accounts. Home equity lines of credit delinquencies also hit a new record, rising 20 basis points to 2.12 percent of all accounts. Mobile home delinquencies increased to 3.63 percent of all accounts from 3.53 percent of all accounts in the previous quarter.
The third quarter composite ratio is made up of the following eight closed-end loans. All figures are seasonally adjusted based upon the number of accounts.
Increased Delinquencies:
- Home equity loan delinquencies rose from 4.01 percent to 4.30 percent.
- Mobile home loan delinquencies rose from 3.53 percent to 3.63 percent.
Decreased Delinquencies:- Direct auto loan delinquencies fell from 2.46 percent to 2.04 percent.
- Indirect auto loan delinquencies fell from 3.26 percent to 3.15 percent.
- Marine loan delinquencies fell 2.28 percent to 2.21 percent.
- Personal loan delinquencies fell from 3.90 percent to 3.74 percent.
- Property improvement loan delinquencies fell from 1.79 percent to 1.66 percent.
- RV loan delinquencies fell from 1.72 percent to 1.64 percent.
For borrowers having trouble paying down debts, ABA advises taking action -- sooner rather than later -- to solve debt problems with the following tips:
- Talk with creditors – the sooner you talk to them, the more options you have;
- Don’t charge more purchases until your problems are solved;
- Avoid bankruptcy – it’s a short-term solution with long-term consequences; and
- Contact Consumer Credit Counseling Services at 1-800-388-2227.
For more information on budgeting, saving and managing credit, visit the ABA Education Foundation’s consumer web page at
http://www.aba.com/abaef/consumers.htm.
The American Bankers Association brings together banks of all sizes and charters into one association. ABA works to enhance the competitiveness of the nation's banking industry and strengthen America’s economy and communities. Its members – the majority of which are banks with less than $125 million in assets – represent over 95 percent of the industry’s $13.5 trillion in assets and employ over 2 million men and women.
2010-01-07T08:04:22-07:00
