Fair Debt in the News
Collection News
West Chester -- Dolphin (http://www.dolphin-corp.com) experts and customers will show Financials 2010 (http://www.financials2010.com/) attendees smart best practices, in-depth case studies and expert strategies for taking the time and cost out of accounts payable, accounts receivable and legacy decommissioning.
Financials 2010, March 16-19 in Orlando, offers case studies, strategies and education for teams that use, evaluate, deploy, and support SAP® solutions for financial management. Learn about Dolphin’s solutions platform and talk to experts at booth #545.
Dolphin experts and customers will speak at the following sessions:
Key tips and techniques to optimize cash flow and working capital in SAP ERP Financials (http://www.financials2010.com/session.cfm?uid=4466f65d-8d09-45f8-8e78-2de31d1dd052&u=us&s=)
Brian Shannon, Director of Business Process Automation, Dolphin
Wednesday, March 17, 4:00 pm - 5:15 pm
Business process optimization expert Brian Shannon uses real-world examples to illustrate how to automate and streamline organizations’ accounts payable and accounts receivable processes to optimize cash flow. The approach leverages standard SAP functionality, such as SAP Business Workflow and the SAP Content Server, to support organizations’ working capital needs.
Shannon delivers proven tips to streamline the Accounts Payable process, reform Accounts Receivable cash bottlenecks, forecast cash flow and early pay discount opportunities, and improve the overall transparency and analytical capabilities of both of these critical working capital process components. In addition he discusses how to integrate existing Order-to-Cash or Procure-to-Pay processes and components seamlessly and will help attendees understand third-party solutions, such as e-Invoicing, OCR, Process Tracking Dashboard, Document Navigation, and Analytics that can help deliver automation and transparency to improve cash flow.
Bringing Home Accounts Payable to Gain Control of the Process (http://www.financials2010.com/session.cfm?uid=761c63e4-efb0-4325-86c4-665abf2edcc1&u=us&s=)
Dolphin customer with more than 150 plants worldwide.
Thursday, March 18, 11:45 am - 1:00 pm
Find out how this manufacturer tackled issues surrounding their outsourced accounts payable program by bringing these processes back in-house. Understand what deficiencies and gaps the current outsourced accounts payable and reporting solution created and how they developed an in-house process to resolve such issues. Hear firsthand details of the process they now use to address invoice receipt, workflow initiation, approvals and exceptions, posting, payments, and analytics.
Best practices for consolidating and retiring legacy systems without compromising access to important financial data and documents (http://www.financials2010.com/session.cfm?uid=444c3ebc-9b79-4852-ac15-76cbefe3ac43&u=us&s=c1&u=us&s=)
Thomas Langner, Product Manager-ILM Suite, Dolphin
Thursday, March 18, 11:45 am - 1:00 pm
Not all legacy environments are created equal. Dolphin’s Langner uses real-world examples to spotlight the tools and options available for system consolidation and legacy decommissioning, focusing on how to retain and manage critical historical financial data and documents while gaining significant cost savings by retiring and migrating data from multiple legacy systems to a single SAP global archive server.
Attendees can visit Dolphin at booth #545 to learn about the Dolphin platform and talk with experts on business process optimization, information lifecycle management and legacy decommissioning.
About Dolphin
Dolphin makes crucial business operations like data management, data archiving, accounts payable, accounts receivable and order management run better and smarter for organizations using SAP solutions. Focused on improving business performance through Information Lifecycle Management and Business Process Management, Dolphin produces the right solution for each customer, faster, through its unmatched experience in SAP technologies, and its proven best practices, tools and add-on applications for SAP solutions. Dolphin solutions improve business and IT performance, lower total cost of ownership and deliver high return on investment.
The company was founded in 1995 and has offices in Philadelphia, PA and San Jose, CA. Dolphin solutions are implemented across North America and around the world. For more information, visitwww.dolphin-corp.com, or contact sales at 888-305-9033.
SAP and all SAP logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries. All other product and service names mentioned are the trademarks of their respective companies.
2010-03-12T08:18:01-07:00
The distinguished law firm of Howe & Associates of Atlanta, Georgia is proud to announce their law firm’s rating of 'AV Preeminent' by the Martindale-Hubbell Legal Directory.
For the past 130 years the Martindale-Hubbell Legal Directory has been rating lawyers nationwide through a series of complex scoring formulas and criteria. With only a small percentage of attorneys in the country attaining this respected 'AV Preeminent' status, and only the most experienced being considered as candidates, the AV Rating is a testament from peer legal professionals and judges that the firm “clearly indicates a demonstration of the highest professional knowledge and ethical standards”. It is, in fact, the highest rating available and indicates the firm of Howe & Associates has reached the top level of legal expertise and competence.
An Atlanta personal injury firm representing those injured on the road or at work in the State of Georgia, Howe and Associates has over 120 years of litigation and trial experience. Their peers in both the legal and medical profession recognize the firm’s lawyers as top legal counsel.
Founded in 1985, Howe & Associates is a civil trial law firm representing clients in cases of personal injury. It doesn’t matter what your case is, whether an auto accident, trucking accident, construction accident, slip and fall injury, burn injuries, premises liability, or wrongful death suit, the law firm of Howe and Associates will scrutinize every detail until we find evidence that will help strengthen your case.
Their attorneys are also expert Atlanta debt collection lawyers representing clients in cases of debt collection, including collection of bad checks, breach of contract disputes, credit card collection, foreclosure collection and judgment enforcement. The firm offers its clients high collection percentages, legal expertise and skilled advice in virtually all aspects of the collection industry.
Their debt collection lawyers will provide advice to their creditor clients on the creation of credit application forms, contracts, deeds to secure debt, UCC liens, as well as creditor representation in bankruptcy proceedings.
2010-03-12T08:18:00-07:00
Please note: links to the booths will not work until Tuesday, February 16, 2010 at 9am est.
Learn
- Expert predictions at Kaulkin Ginsberg’s State of the ARM Industry webinar – 1 PM ET in the Webinar Center
- Brand new charts comparing employee satisfaction in collections vs. firms nationwide, plus data about what makes a Best Place to Work in Collections– in your Briefcase
- Primer on the legislative agenda facing Congress and the ARM Industry in 2010 – in your Briefcase
Win
- Canon 10 MP digital camera - Stop by CR Software’s booth to learn about Titanium Ore and be entered to win
- and discover who referred the most attendees to EXPO 3.0 and will win the grand prize of a free Dell netbook from insideARM.
Network
…and as a Bonus, View Hot Videos at these Booths!
DAKCS Software Systems (our TOP PICK!)
http://events.unisfair.com/rt/insidearm/index.jsp?id=46&seid=29West Asset Management
http://events.unisfair.com/index.jsp?eid=458&seid=29Teleperformance Accounts Receivable Management /AllianceOne Receivables Management
http://events.unisfair.com/rt/insidearm/index.jsp?id=295&seid=29FMS Inc.
http://events.unisfair.com/rt/insidearm/index.jsp?id=351&seid=29insideARM.com
http://events.unisfair.com/rt/insidearm/index.jsp?id=164&seid=29Merlin Information Services
http://events.unisfair.com/rt/insidearm/index.jsp?id=31&seid=29Kaulkin Ginsberg
http://events.unisfair.com/rt/insidearm/index.jsp?id=49&seid=29
ACA International
http://events.unisfair.com/rt/insidearm/index.jsp?id=147&seid=29
Resource Management Services
http://events.unisfair.com/rt/insidearm/index.jsp?id=268&seid=29
IAT
http://events.unisfair.com/rt/insidearm/index.jsp?id=35&seid=29
PCI Group
http://events.unisfair.com/rt/insidearm/index.jsp?id=155&seid=29CR Software
http://events.unisfair.com/rt/insidearm/index.jsp?id=48&seid=29
Sentinel - eCollections
http://events.unisfair.com/rt/insidearm/index.jsp?id=157&seid=29
Stephanie Eidelman is the publisher of insideARM.com and also oversees all operations for Kaulkin Ginsberg. She has more than twenty years of experience in operations management and consulting, both for start-ups and large established firms. She can be reached at 240-499-3806 or by email.
2010-03-11T03:02:08-07:00
The accounts receivable management industry’s first virtual exhibit hall -- insideARM’s EXPO 3.0 -- turned a once daunting task into a Jetsons-like experience for more than a thousand ARM professionals.
EXPO 3.0 is a free-to-the-attendee tradeshow that allows exhibitors and visitors the opportunity to network with fellow peers from their desktop computers.
The show opened on February 16, 2010 and ran all day, with exhibitors manning their booths with staff. Over 1,000 people attended and spent more than 5,916 hours visiting 10,249 areas and downloading 5,372 information files from 58 booths.
One attendee commented, “I was amazed that you could do something like that online, as if you were actually there.”
But even those that were not able to log on the day of the event still have a chance to participate. The unique electronic platform allows booths to remain open for another three months. Visitors can browse exhibitor offerings and download information even if there is not a representative to directly interact with.
“I am glad to see we will still have access to the site, one day just wasn’t long enough,” an exhibitor noted.
In addition, five educational webinars were conducted throughout the day -- “State of the ARM Industry,” “Spotlight on Healthcare Collections,” “M&A in the ARM Industry: Activity and Trends,” “ARM Legislative & Regulatory Update” and “Pardon the Interruption: Credit Card Collections” -- are still available at the webinar center.
“Excellent initiative,” another attendee commented on a follow-up survey by insideARM.
Exhibitors averaged 87 visits each on the opening day. One pleased exhibitor commented, “Two words...VERY IMPRESSIVE!!!”
EXPO 3.0 can still be accessed, for free, until May 16, 2010. Returning visitors can simply log in at http://www.insidearm.com/expo/ to access the exhibitions and webinars; new visitors can quickly register at the same link.
<<< Return to Newsletter
2010-03-11T03:02:08-07:00
The National List of Attorneys, an organization that has provided quality legal representation to the credit and collection industry nationwide since 1900, had a great time exhibiting at Expo 3.0, the first online trade show for the ARM industry. However, we didn’t feel that one day of being live at our booth was nearly enough to answer all of the questions.
If you missed us live on February 16th or if you have more questions for us, good news! We will have a live representative at our booth for the next three weeks, every Thursday from 9-11am CST starting March 11th. We want to give anyone who may have missed out a chance to visit us and ask questions while the Expo is still live.
Each week there will be a theme where you can come learn more about the National List and what we can do for you. You can get information from one of our experienced staff members and interact live.
March 11th’s theme will be: Who we are and what we do. The National List is much more than just a directory of contingency fee collection attorneys, we provide a myriad of services to our clients. Even if you know us, stop by our booth to make sure you are taking advantage of all we have to offer.
March 18th’s theme will be: The attorney screening process. We have an extensive process that we go through to ensure that the attorneys we recommend make a good match for our valued clients. On this day we will discuss in detail our screening process.
March 25th’s theme will be: Insuring your claims. This will give you an overview of exactly what the insurance policy covers, what you need to do to insure your claims and why this is important. This is an uncertain time in our economy; it’s a little bit of peace of mind that comes at no cost to you.
Of course you don’t have to stick to the theme, we promise to answer all of your other questions as well. Stop on by and see us.
2010-03-11T01:07:33-07:00
The National List of Attorneys, an organization that has provided quality legal representation to the credit and collection industry nationwide since 1900, is proud to announce the launch of CreditorsRightsLawFirms.com the premier online directory of experienced creditors' rights and FDCPA defense attorneys nationwide.
The world of collections is getting more and more challenging. With the rising number of FDCPA (Fair Debt Collection Practices Act) and FCRA (Fair Credit Reporting Act) lawsuits surfacing, the need for experienced attorneys that focus their practice on creditors' rights and FDCPA defense is evident now more than ever. Nationwide, there are roughly 800 suits filed against debt collectors each month, this is a record number that is increasing. CreditorsRightsLawFirms.com was established to address the growing need for experienced creditors' rights attorneys. The site boasts over 65 listings of creditors’ rights firms nationwide with more being added weekly.
CreditorsRightsLawFirms.com lists attorneys that are experienced and want to put that knowledge to work for your company. The attorneys you will find here concentrate in creditors’ rights, commercial litigation, FDCPA Defense, FCRA defense, Truth in lending act and/or class action defense. They are experienced in FDCPA, other collection laws and litigation. They can represent your company in bankruptcy proceedings and provide compliance counseling in collections matters.
For more information please contact Rose Heeb at (800) 227-1675 ext 108 or rheeb@nationallist.com.
2010-03-11T01:01:35-07:00
ACA International has hired Mark Schiffman as its new director of public relations. Schiffman is a highly skilled public relations/public affairs leader with more than 20 years experience in the creation, implementation and management of effective communication strategies. Before joining ACA, he spent 14 years providing strategic counsel to clients at Himle Horner, a Midwest public relations/public affairs firm, and his own one-person practice, Drawbridge Consulting. His client experience includes trade associations, businesses, nonprofits, and local, regional and state government.
In addition to his professional experience, Schiffman spent 12 years in local government for the fast-growing Twin Cities suburb of Waconia (population 10,000) as mayor, city councilmember and planning commissioner. He teaches government and PR courses at the University of Phoenix Minneapolis/St. Paul campus and the Public Relations in the Public Sector course at Hamline University School of Business Department of Public Administration, an elective course Schiffman created.
A Minnesota native, Schiffman earned a bachelor's degree in political science from the University of Minnesota-Duluth; master's degree in public administration from the Hamline University Graduate School of Public Administration and Management; and a certificate of public relations from the University of St. Thomas in St. Paul, Minn.
2010-03-11T07:52:28-07:00
CHELMSFORD, Mass. — Aspect, a global provider of unified communications (UC) and collaboration services and software, today announced it has been positioned by Gartner, Inc. in the leaders quadrant of the 2010 Magic Quadrant for Contact Center Infrastructure, Worldwide report. Gartner has evaluated Aspect based on completeness of vision and ability to execute. Additionally, Aspect states that its forward-looking strategy and proven product value are enhanced through its equity relationship with unified communications leader, Microsoft.
As stated by Gartner, they evaluate “contact center infrastructure providers on the quality and efficacy of the processes, systems, methods and procedures that enable contact center performance to be competitive, efficient and effective and to positively affect revenue, retention and reputation. Ultimately, they are judged on their ability to capitalize on their vision.”
“Aspect believes the positioning underscores our visionary leadership in creating unified communications applications on a unified platform to help contact centers achieve their business objectives and further emphasizes the company’s confidence in our strategic direction,” said Jim Foy, president and chief executive officer, Aspect. “Our focus today is on the next generation contact center that positions our valued customers to take advantage of and participate in exciting new advances in communications and collaboration, and to help them address dynamic customer requirements in the age of consumer-generated content.”
The Gartner Magic Quadrant analyzes the vendors in an industry and categorizes them in the “leaders,” “challengers,” “visionaries,” or “niche players” quadrants.
Gartner “Magic Quadrant for Contact Center Infrastructure, Worldwide” by D. Kraus, S. Blood, G. Johnson, February 22, 2010.
About the Magic Quadrant
The Magic Quadrant is copyrighted 2010 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner's analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.
About Aspect
Aspect is a global software and IT services firm specializing in applying Microsoft unified communications and collaboration to help customers achieve optimal results through enhanced business processes across the enterprise and in the contact center. Aspect provides IT consulting, integration services and business applications. For more information, visit www.aspect.com. Follow Aspect on Twitter at http://www.twitter.com/AspectUC.
2010-03-11T07:52:27-07:00
Cherry Hill, NJ: MRS Associates, Inc. (MRS) announced the promotion of Bill Barnshaw to the position of Chief Operating Officer. Mr. Barnshaw joined MRS as Senior Vice President of Analytics and Strategy in August of 2006, after 8 years with Capital One.
“We were seeking a strong, disciplined, and results-driven leader to manage our business operations. We realized very quickly that we did not need to look very far. Bill is a perfect match for this role. He strikes the right balance between the art and science of collections. While highly analytical, he is also very creative and not afraid to take calculated risks. He is supremely qualified and well deserving of this promotion,” said Jeff Freedman, MRS Co-Chairman/CEO.
“As we realigned specific divisions in operations to Bill, the performance of those departments quickly and rapidly improved. Bill’s combination of collection expertise and the understanding of our client’s needs makes him the quintessential COO,” adds Saul Freedman, Co-Chairman/CEO.
In his new position, Mr. Barnshaw will be responsible for managing all aspects of MRS’s collection divisions and its three call centers. While ensuring that client expectations are being met and exceeded, Bill’s focus will be on the increased use of analytics, devising new strategies to drive better performance, identifying cost-saving opportunities, and spearheading the company’s continued operational expansion both domestically and internationally.
MRS Associates (www.mrsassociates.com) is a nationally licensed, full-service accounts receivable management company that specializes in accounts receivable management, customer relationship management, and back office management.
2010-03-11T07:52:27-07:00
Accounts receivable management firm Asset Acceptance Capital Corp. (Nasdaq: AACC) reported significant losses late Wednesday for the fourth quarter and full year 2009 on massive impairment charges taken in the last three months of the year.
The Warren, Mich.-based debt buyer said that it recorded a net loss of $16.4 million, or $0.54 per share, for the full year 2009 compared to net income of $15.7 million, or $0.51 per share, in 2008. In the fourth quarter alone, Asset Acceptance reported a net loss of $20.2 million.
Much of the loss was attributed to a non-cash net impairment of purchased receivables of $32.4 million in the fourth quarter. The company recorded an impairment of only $4.6 million in the fourth quarter of 2008.
Rion Needs, President and CEO, commented in a press release, "The operating environment in 2009 has been one of the most challenging periods in our Company's history, with the fourth quarter proving to be one of the most difficult quarters of the year. The macroeconomic environment continued to adversely impact our cash collections, particularly on our older vintages. In connection with the preparation of our financial statements for the quarter and year ended December 31, 2009, we observed a significant difference between actual and projected cash collections in some of these older portfolios, which caused us to perform a more in depth review of our expectation of future cash collections. This resulted in a large non-cash impairment charge of $32.4 million, or $0.66 per share, net of the tax benefit. As a result, we reported a net loss for fourth quarter and the year. We are hopeful that this action will aid in minimizing non-cash impairments going forward."
The large impairment drove down revenues in the fourth quarter. The company reported total revenues of $18.7 million in the fourth quarter of 2009, compared to total revenues of $55 million in the fourth quarter of 2008. Total revenues in the fiscal year 2009 were $172.5 million versus $234.2 million in 2008.
Asset Acceptance reported cash collections of $74.8 million in the fourth quarter ended December 31, 2009, versus cash collections of $83.3 million in the year-ago period. For the full year, the company reported cash collections of $334 million compared to cash collections of $369.6 million in 2008.
The company reported an even split between traditional collection channels and legal collections for the year, with traditional channels accounting for $142.4 million and legal collections bringing in $141.7 million. The remainder, $49.9 million, was classified as “Other” (bankruptcy, collection agency forwarding and probate).
"While the economic headwinds persisted throughout the year, the pricing environment remained attractive as supply of charge-offs from issuers continued to expand and the overall demand remained soft,” said Needs. “We continued to ramp up our purchasing during the back half of the year, and expect this initiative to pay dividends as we move through 2010 and collect on the newer vintage.”
The company invested $121.9 million to purchase charged-off consumer debt portfolios with a face value of $4.5 billion, for a blended rate of 2.73 percent during 2009, compared to $154.2 million with a face value of $3.8 billion, for a blended rate of 4.05 percent in 2008.
2010-03-11T07:52:26-07:00
Salt Lake City, Utah — Advanced Collection Services (ACS) keeps work locations flexible with IAT’s CT Impact Hosted Services. Collection agents can contact accounts via CT Impact from any location, which has improved ACS’ bottom line.
Peter Allen, Manager of ACS, recognized the rural location of the office in Lewiston, Maine can make commuting difficult for the growing agency of 11 employees. Using CT Impact’s Hosted Broadcast Messaging, Allen has created a virtual office where employees work from home during every shift of the work day.
“In the past, we had some difficulty staffing the evening calling campaigns; people tend to not want to work that shift. However, it's much easier to do that with agents working from home,” said Allen.
Primarily, Allen runs CT Impact Hosted Broadcast Messaging during the evening, when most of his agents are working from home. CT Impact will transfer incoming calls to available agents working in the office or from home.
Adding IAT’s CT Impact Hosted Services to ACS was easy for Allen, who has had IAT’s site-premised predictive dialer, CT Center, for over 20 years. Allen has found it easier to retain agents and expand business while only slightly increasing staffing levels with both CT Center and CT Impact working for him.
Ray Fowler, IAT’s Director of Sales and Marketing, sees the potential collection agencies can obtain with CT Impact. “We’ve found that using the hosted services of CT Impact provides incredible flexibility for collection agencies. It allows agencies like ACS to be flexible with its employees’ work environments but still contact numerous accounts during the working hours of the day,” Fowler said.
For more information please visit www.iatsmartdial.com, call (800) 574-8801 or e-mail at info@iatsmartdial.com
About IAT
IAT has been developing dialing and messaging technology to the collections industry for over two decades. Located in Salt Lake City, IAT provides products not only for the United States but internationally. CT Impact is IAT’s cutting-edge hosted solution, which provides a combination of predictive dialing and broadcast messaging without the expense of hardware. IAT offers solutions for larger collection companies with its advanced CT Center product, a premier predictive dialing and IVR messaging on-site solution.
About ACS
Advanced Collection Services is located in Lewiston, Maine and has been in business for 25 years. Presently, the agency has grown to a staff of 11 employees, with as many as seven collection agents working at once. Advanced Collection Services has been using dialing technology almost as long as it has been in business, which is one of the main things they enjoy about IAT and its automated solutions for collection agencies.
2010-03-10T07:51:10-07:00
Debt Purchasing
Please note: links to the booths will not work until Tuesday, February 16, 2010 at 9am est.
Learn
- Expert predictions at Kaulkin Ginsberg’s State of the ARM Industry webinar – 1 PM ET in the Webinar Center
- Brand new charts comparing employee satisfaction in collections vs. firms nationwide, plus data about what makes a Best Place to Work in Collections– in your Briefcase
- Primer on the legislative agenda facing Congress and the ARM Industry in 2010 – in your Briefcase
Win
- Canon 10 MP digital camera - Stop by CR Software’s booth to learn about Titanium Ore and be entered to win
- and discover who referred the most attendees to EXPO 3.0 and will win the grand prize of a free Dell netbook from insideARM.
Network
…and as a Bonus, View Hot Videos at these Booths!
DAKCS Software Systems (our TOP PICK!)
http://events.unisfair.com/rt/insidearm/index.jsp?id=46&seid=29West Asset Management
http://events.unisfair.com/index.jsp?eid=458&seid=29Teleperformance Accounts Receivable Management /AllianceOne Receivables Management
http://events.unisfair.com/rt/insidearm/index.jsp?id=295&seid=29FMS Inc.
http://events.unisfair.com/rt/insidearm/index.jsp?id=351&seid=29insideARM.com
http://events.unisfair.com/rt/insidearm/index.jsp?id=164&seid=29Merlin Information Services
http://events.unisfair.com/rt/insidearm/index.jsp?id=31&seid=29Kaulkin Ginsberg
http://events.unisfair.com/rt/insidearm/index.jsp?id=49&seid=29
ACA International
http://events.unisfair.com/rt/insidearm/index.jsp?id=147&seid=29
Resource Management Services
http://events.unisfair.com/rt/insidearm/index.jsp?id=268&seid=29
IAT
http://events.unisfair.com/rt/insidearm/index.jsp?id=35&seid=29
PCI Group
http://events.unisfair.com/rt/insidearm/index.jsp?id=155&seid=29CR Software
http://events.unisfair.com/rt/insidearm/index.jsp?id=48&seid=29
Sentinel - eCollections
http://events.unisfair.com/rt/insidearm/index.jsp?id=157&seid=29
Stephanie Eidelman is the publisher of insideARM.com and also oversees all operations for Kaulkin Ginsberg. She has more than twenty years of experience in operations management and consulting, both for start-ups and large established firms. She can be reached at 240-499-3806 or by email.
2010-03-11T03:02:08-07:00
The accounts receivable management industry’s first virtual exhibit hall -- insideARM’s EXPO 3.0 -- turned a once daunting task into a Jetsons-like experience for more than a thousand ARM professionals.
EXPO 3.0 is a free-to-the-attendee tradeshow that allows exhibitors and visitors the opportunity to network with fellow peers from their desktop computers.
The show opened on February 16, 2010 and ran all day, with exhibitors manning their booths with staff. Over 1,000 people attended and spent more than 5,916 hours visiting 10,249 areas and downloading 5,372 information files from 58 booths.
One attendee commented, “I was amazed that you could do something like that online, as if you were actually there.”
But even those that were not able to log on the day of the event still have a chance to participate. The unique electronic platform allows booths to remain open for another three months. Visitors can browse exhibitor offerings and download information even if there is not a representative to directly interact with.
“I am glad to see we will still have access to the site, one day just wasn’t long enough,” an exhibitor noted.
In addition, five educational webinars were conducted throughout the day -- “State of the ARM Industry,” “Spotlight on Healthcare Collections,” “M&A in the ARM Industry: Activity and Trends,” “ARM Legislative & Regulatory Update” and “Pardon the Interruption: Credit Card Collections” -- are still available at the webinar center.
“Excellent initiative,” another attendee commented on a follow-up survey by insideARM.
Exhibitors averaged 87 visits each on the opening day. One pleased exhibitor commented, “Two words...VERY IMPRESSIVE!!!”
EXPO 3.0 can still be accessed, for free, until May 16, 2010. Returning visitors can simply log in at http://www.insidearm.com/expo/ to access the exhibitions and webinars; new visitors can quickly register at the same link.
<<< Return to Newsletter
2010-03-11T03:02:08-07:00
Accounts receivable management firm Asset Acceptance Capital Corp. (Nasdaq: AACC) reported significant losses late Wednesday for the fourth quarter and full year 2009 on massive impairment charges taken in the last three months of the year.
The Warren, Mich.-based debt buyer said that it recorded a net loss of $16.4 million, or $0.54 per share, for the full year 2009 compared to net income of $15.7 million, or $0.51 per share, in 2008. In the fourth quarter alone, Asset Acceptance reported a net loss of $20.2 million.
Much of the loss was attributed to a non-cash net impairment of purchased receivables of $32.4 million in the fourth quarter. The company recorded an impairment of only $4.6 million in the fourth quarter of 2008.
Rion Needs, President and CEO, commented in a press release, "The operating environment in 2009 has been one of the most challenging periods in our Company's history, with the fourth quarter proving to be one of the most difficult quarters of the year. The macroeconomic environment continued to adversely impact our cash collections, particularly on our older vintages. In connection with the preparation of our financial statements for the quarter and year ended December 31, 2009, we observed a significant difference between actual and projected cash collections in some of these older portfolios, which caused us to perform a more in depth review of our expectation of future cash collections. This resulted in a large non-cash impairment charge of $32.4 million, or $0.66 per share, net of the tax benefit. As a result, we reported a net loss for fourth quarter and the year. We are hopeful that this action will aid in minimizing non-cash impairments going forward."
The large impairment drove down revenues in the fourth quarter. The company reported total revenues of $18.7 million in the fourth quarter of 2009, compared to total revenues of $55 million in the fourth quarter of 2008. Total revenues in the fiscal year 2009 were $172.5 million versus $234.2 million in 2008.
Asset Acceptance reported cash collections of $74.8 million in the fourth quarter ended December 31, 2009, versus cash collections of $83.3 million in the year-ago period. For the full year, the company reported cash collections of $334 million compared to cash collections of $369.6 million in 2008.
The company reported an even split between traditional collection channels and legal collections for the year, with traditional channels accounting for $142.4 million and legal collections bringing in $141.7 million. The remainder, $49.9 million, was classified as “Other” (bankruptcy, collection agency forwarding and probate).
"While the economic headwinds persisted throughout the year, the pricing environment remained attractive as supply of charge-offs from issuers continued to expand and the overall demand remained soft,” said Needs. “We continued to ramp up our purchasing during the back half of the year, and expect this initiative to pay dividends as we move through 2010 and collect on the newer vintage.”
The company invested $121.9 million to purchase charged-off consumer debt portfolios with a face value of $4.5 billion, for a blended rate of 2.73 percent during 2009, compared to $154.2 million with a face value of $3.8 billion, for a blended rate of 4.05 percent in 2008.
2010-03-11T07:52:26-07:00
A former assistant vice president with JP Morgan Chase has filed a lawsuit against her old employer claiming, among other things, that the credit card unit misrepresented information about a portfolio of card debt for sale.
In a suit filed in Bexar County (Texas) District Court, Linda Amonte alleges the bank had about 5,000 accounts with incorrect balances and did not have the court documentation for some 11,000 accounts with judgments that the bank said it had, misrepresenting those accounts to potential debt buyers.
Amonte, team leader in the bank’s credit services division in San Antonio, said she was in charge of auditing the accounts, but couldn’t confirm some of the judgments or balances, causing her to question the values with her immediate superior.
The lawsuit alleges that she went above her supervisor to another level of the bank’s management, and “made it clear she would not participate” further with the attempt to sell the portfolio, which included more than 23,000 delinquent accounts with a value of more than $200 million, according to the lawsuit. Almonte alleges in the lawsuit that she was relieved of her duties in November of last year as a result of her actions.
Debt buyers typically conduct due diligence of their own to confirm the value of a portfolio before completing a deal. But sometimes those values and account ownership are difficult to determine.
Greg Ousley, CEO of Global Debt Registry, said his firm was founded to provide a third party data validation solution, as well as chain of title origination and management, for all of the global banks. This type of solution would prevent issues like the one Almonte alleges.
But debt buyers are typically protected through warranties made on the portfolios when purchased. This allows buyers to put back – or a seller to buy back -- certain accounts that are later found to be bankrupt, deceased, or lack information stipulated in the sales contract.
Almonte’s attorney, John Bruster “Bruse” Loyd of Houston, said that all charges in the lawsuit are allegations at this time and that the discovery process will help determine if any of the charges are true.
A Chase spokesman told insideARM the bank doesn’t comment on pending litigation.
No court date has been set on the case. Almonte is requesting a jury trial and seeks unspecified damages.
2010-03-10T07:51:09-07:00
A Denver-based accounts receivable management firm will be taking over an old IRS office in Overland Park, Kan., hiring some 400 workers this year with plans to add 1,200 positions over the next five years.
The Overland Park Economic Development Council said Monday that Regent Asset Management Solutions has leased office space in Overland Park – a large suburb of Kansas City -- formerly occupied by the IRS. Regent already has an office in the town that employs 50 people.
Regent’s CEO, Michael Scata, told The Kansas City Star that the plan is to fill the current 15,000 square feet the company has leased and after that, potentially expand into the 60,000 sq. ft. of additional space in the building.
The Kansas Department of Commerce is aiding in the development with $1 million in workforce training grants.
“The efforts of ... the Kansas Department of Commerce and the members of the Overland Park EDC made the Kansas expansion possible,” Scata said in a release.
“The prospect for 400 new jobs this year, and 1,200 in five years, brings hope and optimism for job seekers and their families,” Overland Park Mayor Carl Gerlach said in a release. “We are starting to see some light at the end of the dark economic tunnel. However, we also know that the economic recovery will be slow and arduous.”
Regent, founded in 1981 as National Account Adjusters, currently has offices in Overland Park, Las Vegas, Phoenix, Denver and Murchison, Texas. The ARM company offers third party collection services across a range of sectors and skiptracing services. In addition, Regent is an active debt buyer and helps clients with lawsuit management and judgment recovery.
2010-03-09T07:45:59-07:00
Consumers filed nearly 120,000 complaints against third party debt collection agencies and creditor collection operations in 2009, according to a recent report from the Federal Trade Commission, the accounts receivable management industry’s chief regulator.
That number likely will increase when the FTC adjusts for complaints transferred into the system from other organizations, the agency told insideARM.
Identity theft lead the list of consumer complaints with 21 percent of total complaints filed with the agency. Complaints against collection professionals ranked second, accounting for nine percent, with complaints against third party collection agencies representing 6.6 percent of the total. The number of complaints against third party debt collectors and creditor collection operations increased 14 percent from 2008 to 2009; complaints against third party collectors rose 11.8 percent while complaints against creditor collections increased 20.8 percent.
ACA International CEO Rozanne Andersen said she believes the complaints signal a “heightened level of frustration” among consumers facing financial problems who feel they have no place to turn for help other than to the FTC or their state attorney general.
Another possible explanation for the rise in complaints is an increase in collection activity seen by the industry recently. In insideARM’s most recent quarterly industry Confidence Survey, more than 60 percent of collection agency respondents reported an increase in placement volume in the early part of 2010, with only 12 percent reporting a decrease.
As more people were losing their jobs, banks were slashing defaulted debt from their books at record rates, sending the accounts into the ARM industry. The Federal Reserve has reported a dramatic spike in credit card charge-offs over the last two years, according to the data the agency collects from U.S. lending institutions.
Credit card charge offs - the bulk of the ARM industry’s debt collection volume - increased 46 percent from 2007 to 2008, and another 56 percent from 2008 to 2009. According to an insideARM analysis of the reported bank charge-offs, there were $83.04 billion in reported credit card charge-offs last year alone.
With more debt to collect and more consumers contacted by creditors and debt collectors, there is more opportunity for consumer complaints.
“Higher placement volumes could lead to higher complaint levels,” said Mark Russell, director at ARM advisory firm Kaulkin Ginsberg, a sister company of insideARM.
However, Andersen said she is reluctant to draw a correlation between the increase in credit card charge-offs with the increase in consumer complaints – especially given the types of complaints filed.
“In a perfect world, that (increase in charge-offs) should not make a difference because for the members of ACA who are adhering to professional collections practices, it doesn’t matter if they have 10 accounts or 10,000 accounts, their behavior should be the same,” Andersen said.
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According to the FTC report, consumers most often complained last year that collection professionals (in order from most common complaint):
- Called repeatedly or continuously
- Falsely represented the amount or status of the debt
- Failed to send written notice of debt
- Falsely threatened a lawsuit
- Failed to identify themselves as a debt collector
- Called repeatedly to obtain actual debtor’s location
- Used obscene, profane or otherwise abusive language
- Called debtor at work knowing debtor can’t take the call
- Threatened debtor with false arrest or seizure of property
- Told someone other than the debtor about the debt.
John Krebs, network program manager for the FTC’s online database of consumer complaints known as Consumer Sentinel Network, told insideARM that the complaints contained in the database have not been verified.
“They are basically what the consumer has told us,” he said. Nonetheless, the FTC and CSN have expanded their education outreach efforts to consumers through the FTC website and through its relationship with other consumer-focused groups. For example, in conjunction with this year’s report to Congress on the collection industry, the FTC released a video that shows consumers how to file a complaint and examples of what they might file a complaint about.
“We have to point out the ease with which consumers can file a complaint with the FTC now,” noted Russell. “We don’t condone actions of collectors that run afoul of the Fair Debt Collection Practices Act (FDCPA), but the connection between complaint system accessibility and public education and rising complaints is pretty obvious.”
The FTC also released a new complaint form and new CSN form in June 2008 that allows consumers to be more specific about the nature of their complaint, Krebs said. Consumers who use CSN’s online complaint tool are asked details about the collection professionals they have dealt with, including whether or not they are the original creditor or a third party agency. The online form also includes specific examples of offenses consumers may choose from when completing the form. Krebs said the updated system allows law enforcement officials investigating consumer fraud and complaints to conduct more narrow searches for information.
Andersen said ACA has been very impressed with the changes the FTC has made to their complaint intake system, which comes in part as a result of the FTC’s discussion with the industry.
“That’s why we are so dogged about presenting consumers with an alternative,” Andersen said “The industry can take care of those complains if we know about them,” she said, adding that the industry can point consumers to the correct person within an agency who has the authority to stop any alleged abuse or violations.
Andersen said the industry will look to the FTC’s report to Congress later this year for other strategies ACA can undertake to address the growing consumer complaints against the industry.
2010-03-05T07:46:49-07:00
Dallas – AlphaTrust, the market innovator in e-signature process automation solutions, today announced that it has signed more than 250 customers of its PRONTO™ software for financial services and other industries.
With PRONTO™, organizations create secure, permanent business documents that are the legal and functional equivalent of ink-signed paper documents. PRONTO™ helps customers eliminate paper, time, bottlenecks, and security issues from their business processes. It simplifies client contract management, eliminates document process management complexity, ensures document security and integrity for the life of the document, and eliminates long lag times associated with document signature and approval processes.
“We are delighted to pass this customer milestone,” said Bill Brice, CEO of AlphaTrust. “AlphaTrust is unique in providing every step of the automated e-signing process while delivering the industry’s lowest total cost of ownership. Our intense focus on client results was confirmed in a recent customer satisfaction survey, where more than 90% of customers said they would recommend AlphaTrust to friends and colleagues.”
With an emphasis in financial services, AlphaTrust’s customers also include a wide range of industries, including government, healthcare, education, manufacturing, telecom, and others. For example, AlphaTrust’s customers include ADP, AT&T, California Closets, Global Debt Registry, LexisNexis, Fidelity National Financial, Marsh & McLennan (Kroll), the State of Texas, Tyco, and the US Military Academy at West Point.
Going From 7 Days to 1 Hour
Global Debt Registry, the nation’s only accounts receivable title origination company, provides account level title and verification services, debt validation, data integrity management and turn-key media management services to the financial service industry. GDR serves as transaction facilitators when performing and non-performing receivables are bought and sold as assets in the marketplace. GDR uses PRONTO to create account level electronic titles and substantiate the transfer of rights and interest from sellers to buyers. Without PRONTO’s digital signature solution, providing the A/R title and registry services would be time consuming and cumbersome. Originating a title and registering a transaction without e-signature capabilities can take up to 7 business days, but now only takes one hour for all parties to complete the title transfer process. A more detailed version of this use case study is available at http://www.alphatrust.com/customers/gdrcasestudy/
According to Greg Ousley, CEO of Global Debt Registry, “AlphaTrust has enhanced our ability to deliver value to clients and changed the way in which our industry conducts business. Our A/R title origination and ownership verification, debt validation, data integrity and turnkey media management solutions provide clients with the opportunity to build trust at the speed of light. PRONTO creates a more cost effective and efficient process and in turn establishes a much higher standard for operations and promotes goodwill.”
Interested parties can see a short PRONTO™ demo at https://pronto1.alphatrust.com/ProntoDemo/ or obtain more information by contacting sales@alphatrust.com.
About AlphaTrust
AlphaTrust (www.alphatrust.com) is the market innovator in e-signature process automation solutions. Its PRONTO™ product line helps clients eliminate paper, time, bottlenecks and security issues from their business processes by delivering e-signature solutions to financial services and other select industries. PRONTO™’s complete and flexible platform enables it to easily adapt to customers’ business environments. AlphaTrust is unique in providing every step of the automated e-signing process while delivering the industry’s lowest total cost of ownership. Founded in 1994; the Dallas-based firm has more than 250 customers including ADP, AT&T, California Closets, Global Debt Registry, LexisNexis, Fidelity National Financial, Marsh & McLennan (Kroll), the State of Texas, Tyco, and the US Military Academy at West Point.
2010-03-04T07:24:59-07:00
New credit card rules -- The Credit Card Accountability Responsibility and Disclosure Act of 2009, commonly known as the CARD Act -- became effective in late February and will hurt collections in the short-term, but could have some positive effects in the long-term, according to industry experts.
The immediate impact will be very minimal due to tax season, said Tim Smith, senior vice president of collections for Firstsource Solutions, based in Mumbai, India, with U.S. collection headquarters in Amherst, N.Y.
During tax season consumers tend to use tax refunds to pay down card balances and to settle other debts, Smith explained. People expecting refunds tend to file early so that they can receive their refunds quickly.
Most of those refunds will be received and spent in the next 30 days, according to Smith.
So most of the impact on the accounts receivable management industry will focus on administrative functions going forward, such as credit card clients requiring Firstsource and other debt collection firms to provide more disclosure, provide notices of change of terms and other similar requirements.
As for the impact on issuers and cardholders, Smith expects that more fees – particularly annual fees – will be added to credit card accounts and rewards programs will be further curtailed as card issuers look to recover lost revenues. He pointed to a recent Citigroup regulatory filing saying that the firm projects a 2010 reduction in revenues of up to $600 million from the impact of credit card reform laws.
However, Smith says that the projections of revenue reductions are probably overdone.
He and others in the industry are in agreement that the biggest change will be card issuers continuing to cut credit lines.
“The DBA realizes that the more information given to consumers the more likely it is that the consumer will not dispute the balance and one would hope that the default rates would be lower,” said Barbara Sinsley, general counsel for debt buying trade group DBA International. “However, due to the restrictions on interest and fees, creditors may be extending less credit to those who have the greatest need for credit. While this may appear to be like a method to decrease defaults, the overall credit market along with the debt buying and debt collection markets will likely see a decline in recoveries.”
“There’s going to be an impact on the amount of debt,” said Valerie Hayes, general counsel for ACA International. “Consumers are going to be more aware of the impact of their debt.”
The new rules require issuers to include on statements the amount of time that it would take to pay off the debt if only the minimum amount was paid each month and how much it would cost per month to pay off the outstanding receivable in 36 months.
With that type of detail at their fingertips, Hayes expects cardholders to be more aggressive in paying off their balances – if they can.
She and Smith pointed to the continuing high employment rate -- 9.7 percent in January, with the latest figures set to come out Friday -- as a critical factor in the level of debt entering collection.
“There is still a segment of the population who can’t afford to pay off the credit card debt,” Hayes said. “They will be forwarded on to collection agencies for collections.”
“The unemployment rate is more important than anything in terms of [actual] collections,” Smith said. “When people are unemployed, they have a hard time paying off debt, even if they want to do so.”
Smith and Lou Freedman, chair of the federal government reform committee for the National Association of Retail Collection Attorneys and managing member of collections department at Freedman Anselmo Lindberg & Rappe, Naperville, Ill., expect the CARD Act to reduce the number of “fringe” borrowers; those who would barely qualify a few years ago. With the tightened rules, these borrowers will have a harder time obtaining credit.
“It’s going to be an issuer’s market for the next 12 to 18 months,” Smith said. “Those with good credit will still be able to have better interest rates. Ultimately [the CARD Act] will lead to better underwriting and a higher class (less risky) of customer. So [the law] will have a negative impact on the total amount of debt, but a positive impact on the collectibility of the debt.’
2010-03-03T07:46:26-07:00
WARREN, Mich.--Asset Acceptance Capital Corp. (NASDAQ: AACC) announced today that it will release its financial results for the fourth quarter and year-end 2009 on Wednesday, March 10, 2010, at 4:00 p.m. EST. The Company will host a conference call at 5:00 p.m. EST the same day to discuss its results.
Participation in the question-and-answer session of the call will be limited to institutional investors and analysts. Individual investors and retail brokers are invited to listen via a live webcast, available on the investor section of the Company’s website at www.AssetAcceptance.com. A replay of the webcast will be available until March 10, 2011.
About Asset Acceptance Capital Corp.
For more than 45 years, Asset Acceptance has provided credit originators, such as credit card issuers, consumer finance companies, retail merchants, utilities and others an efficient alternative in recovering defaulted consumer debt. For more information, please visit www.AssetAcceptance.com.
2010-03-03T07:44:27-07:00
BOSTON -- DebtX, the largest marketplace for loans, today announced that it will sell $105.5 million in primarily non-performing loans for a regional bank in the western United States.
The portfolio is comprised of 71 loans and 33 relationships. The collateral includes commercial and residential properties located primarily in California, Washington, Oregon and Arizona. The three largest loans in the pool have a combined principal balance of $47.6 million.
Bids are due by 2 p.m. Eastern Daylight time on Monday, March 22, 2010. Due diligence materials are now available at www.debtx.com.
"Over the past six months, the number of bids per offering at DebtX has increased an average of 25% due to heightened demand for performing and non-performing loans," said DebtX CEO Kingsley Greenland. "A growing number of equity buyers are seeking to re-enter the commercial real estate market by purchasing loans because many distressed properties are in default or are unable to service their debt. Buying the loan is a very effective way to again own commercial real estate."
Qualified investors interested in the portfolio can contact Brooke Foley at 617.531.3416 or Mike Roth at 617.531.3424.
About DebtX
DebtX is one of the world's leading full-service loan sale advisors for commercial, consumer and specialty finance debt. DebtX operates the world's largest and most liquid online marketplace for loans, with more than 6,000 registered and approved investors and more than 300 selling institutions, including commercial banks, insurance companies, investment banks and government-sponsored enterprises. DebtX also offers DXMark®, the first objective valuation of commercial real estate portfolios based on actual secondary market loan sales. DXOpen® is a family of deal management products used by syndication and agency services professionals. DebtX is based in Boston, with U.S. offices in Atlanta, New York, and San Francisco, and European offices in London, Madrid and Frankfurt. For information, call 617.531.3400 or visit www.debtx.com.
2010-03-02T07:12:17-07:00
Business owners and executives who are focused on accounts receivable management (ARM) and debt collection are anxiously awaiting the end of this recession. ARM professionals know that the perfect storm of improved recoveries and high placement volumes occurs at the outset of any economic recovery.
Improved results among many collection agencies and debt buyers in Q4 2009 and positive results so far in 2010 are leading some to believe the worst may be in our rear view mirrors and starting to fade. Tax season will inevitably help improve confidence levels.
Not so fast.
Last week, less than stellar results were announced in the two areas that most directly impact ARM results: unemployment and consumer confidence. New jobless claims filed during the week of February 15th actually rose by 22,000, exactly the opposite of what forecasters were expecting. Consumer confidence levels fell sharply in February from January according to two prominent studies, hitting their lowest marks since the ’83 recession.
At best, early signs of improvement are mixed. Indeed, manufacturing and retail sales have shown the best results because of shifts in inventories and export growth. Consumer spending has also increased, but you have to pull out auto sales to see positive results. Wage and salary levels continue to tick upward and new jobless claims are down 70 percent from last year’s numbers. M&A is starting to pick up and the stock market recovered more than half of its losses, although it appears to have leveled off.
Let’s stay focused on what’s most important to ARM and that’s job creation. If the past is any indication, unemployment levels will remain high for months following the official end of this recession. Most economists believe that unemployment levels will remain about where they are for the remainder of 2010 (currently 9.7 percent unemployment, 16.5 percent underemployment). Each new person who loses his or her job is one more person who will struggle to pay bills. And confidence levels are viral, spreading rapidly among friends and family of those impacted by job loss.
We are not out of the woods yet and need to resist temptation to operate our businesses as if we were. Cautious optimism should prevail and careful business planning now will pay off significantly when the economic tides really change for a sustained period of time.
2010-03-02T07:12:17-07:00
Consumer / Retail
Credit card holders have begun receiving notices about changes to their card agreements and some of the changes could lead to lower credit scores.
Some of the new practices creditors are employing are mandatory under the new Credit Card Accountability, Responsibility and Disclosure Act (CARD Act), which took effect last month. Many others, however, are creditors’ attempts to replace revenue-generating practices that were banned by the new law.
Dan North, chief economist for Euler Hermes expects most cardholders will ignore the mailed notices.
“The rule changes will go completely unnoticed by most card holders until it is too late… Until the change costs them,” he said.
For those cardholders who are paying attention, some may find that card membership is no longer free, fees may be charged for little or non-use of their credit card during a given period, dormant accounts will be closed, and that no-payment for several month offers are gone, among other things.
A proposed rule change by the Federal Reserve, scheduled to take effect in August if approved, would ban fees for inactivity and multiple penalty fees, and fees for declined transaction fees. But some of the changes creditors impose, including lower credit lines, may negatively impact consumer behavior as well as their credit scores.
Research by VantageScore Solutions LLC - a new generic credit scoring model used by lenders for consistent interpretation of consumer credit files across all three major credit reporting companies – shows the vast majority of consumers who experience a credit line decrease are not seeing their credit scores drop precipitously, said Sarah Davies, VantageScores senior vice president of analytics and product management.
"For example, consumers who carry a balance close to their credit limit have no room for a decrease, so there is no added impact to their credit score when a credit line is decreased,” Davies said. But she said cardholders with high credit limits and good payment records are more vulnerable.
“Consumers with high credit limits who pay off their credit card balances every month or those carrying a balance in the middle range of their credit limit may see a small drop in their scores,” Davies said.
Davies said the latter group’s credit score is more negatively affected by a lower credit line because for consumers with higher credit limits, the algorithm is more sensitive to changes. “Variables such as utilization have the room to play a greater role, although the drops we’re seeing in the score are very small on average,” she said.
But industry experts say how consumers respond to creditors’ new rules could have as much of an effect on their credit score as the changes creditors impose. For example, consumers who choose to close an account could be lowering their overall credit score if their overall outstanding debt hasn’t declined much, said Craig Watts, spokesman for FICO.
That’s because credit scores are comprised of four key factors: payment history, outstanding debt, available credit and account tenure.
“When you close an account, it changes not just how many you have open, but the total amount of cash you have available,” Watts said.
Davies said closing an existing credit card account also can hurt a credit score because it erases the length of credit history, which is calculated as part of “Depth of Credit." “If a consumer must close an account, closing the oldest account is the least favorable option because the longer a line of credit is open, the more history a consumer has accumulated,” she said.
Lauren Bowne, staff attorney at Consumers Union, the non-profit publisher of Consumer Reports magazine, suggests making a few small purchases on cards held for emergencies to keep them active. But don’t forget to pay them off quickly and don’t do it if you might forget. ”Don’t do it if you’re missing a payment because you forgot to make a payment. Don’t get yourself confused,” she said.
2010-03-12T08:18:01-07:00
Fort Lauderdale, FL -- A New Horizon Credit Counseling weighs in on the new Credit Card Act and what this will mean to consumers. Consumers may now see a return to annual credit card fees. Although the new Credit Card Law restricts certain fees, such as those charged for surpassing credit limits or paying credit cards late but there are plenty of other charges that remain fair game. Credit Cards may start to ramp up additional fees. For instance, Fifth Third Bank last year began charging some cardholders $19 for not using their cards for 12 months. There is no limit to how high annual percentage rates can go. Some banks have raised interest rates to record levels weeks before the new laws went into effect.
According to CreditCards.com Weekly Credit Card Rate Report the national average interest rate on new credit card offers hit 14.62 percent. This increase in the interest rates was the highest since they started tracking in 2007. Six months ago the average was 12.7% and now it’s 14.6%.
Not only are the banks raising rates to restore the profits they might be losing, they have also started changing some of their card products to variable rates from fixed rates. Many of the largest issuers, including Bank of America and Chase, switched their customers over to variable rate cards in 2009.
“The changes brought on by this new legislation are significant, and protective of the consumer, but they are worthless if the card holder fails to read and understand the notices, updates, and credit card offers they are receiving from their creditors daily,” warned Steven Stark, General Counsel and COO of A New Horizon Credit Counseling Services in Fort Lauderdale, FL.
Some other things you should know about the new Credit Card Act are:
- Late payments before the 60 day window will not increase your interest rates, but it will still show up negatively on your credit report.
- Open credit card statements quickly and review them to keep abreast of new terms.
- Some of the credit cards may have deadlines that must be met to opt in or out of to get certain terms.
- The new Credit Card Act does not cover Business and corporate credit cards.
- The Credit Card Act does not cap interest rates. The increased rate can still triple your existing APR.
- A rate increase can't be applied to existing balances unless cardholder is delinquent.
- Cardholders must be notified of a rate increase 45 days in advance, but there is no cap on rates.
- Those under 21 can't apply for a credit card unless they have a co-signer, sufficient income or show proof that they have an independent means to repay the card debt themselves.
With banks trying to use every loophole they can find to help their bottom lines, it will be the consumer who will still suffer. If interest rates have already increased and annual fees are reinstated, how will the consumers get themselves out of the financial hole they may be in?
“If the consumer does not understand the changes to their credit card agreement, or has unmanageable debt they should speak with one of our individual certified consumer credit counselors who can help," added Mr. Stark.
A New Horizon Credit Counseling, a well established Credit Counseling company with over 15 years experience as a non-profit organization assisting individuals and families from all walks of life in both maintaining control and regaining control of their finances. Credit Counseling may be the solution and help with Debt Management, Budget Management and Debt Consolidation. This is all offered in the strictest of confidence by certified financial counselors. Contact Stuart Lieberman who may be reached at (800) 556-1548 Extension 1126 A New Horizon – http://www.anewhorizon.org for more information
2010-03-08T08:18:05-07:00
MADISON, Wis.—David Leuthold, Executive Director of The Association of Settlement Companies (TASC), will provide insight on the benefits of debt settlement at the 14th Annual Collections & Credit Risk Conference, held March 21-23 at the InterContinental Hotel in Miami.
“I’m looking forward to talking about how debt settlement continues to be a reliable option for consumers in debt as well as for creditors,” Leuthold said. “Having representatives from the creditor side on this panel demonstrates this assertion.”
Leuthold will be joined by Carmine Dorio of Progressive Financial Services, Jenna Keehnen of the United States Organization for Bankruptcy Alternatives and Roger Knauf of DBA International.
The March 22 session titled “Why You Can’t Afford to Ignore Debt Settlement” will be moderated by TASC Executive Board Member Teresa Dodson.
More information on the conference, which is put on by Source Media, can be found at http://www.americanbanker.com/conferences/1_3/.
About The Association of Settlement Companies
The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit www.tascsite.org.
2010-03-05T07:46:50-07:00
MADISON, Wis. — A report released recently by the Federal Trade Commission reveals that services related to consumer credit continue to generate a high percentage of complaints and the need for watchdogs such as The Association of Settlement Companies (TASC) is stronger than ever, the organization announced.
In the FTC’s annual Consumer Sentinel Network report, third party and creditor debt collection ranked No. 2 (nine percent of all complaints), credit cards were No. 7 (three percent), advance-fee loans and credit protection/repair were No. 9 (three percent), banks and lenders were No. 10 (two percent), credit bureaus, information furnishers and report users were No. 11 (two percent) and debt management and credit counseling were No. 19 (one percent).
“Whether it’s credit cards, banks or even debt settlement companies, consumers should be extra vigilant when assessing their credit options,” Dave Leuthold, executive director of TASC, said. “With all the disreputable companies out there, our members are held to the strictest of operating standards and procedures to differentiate ourselves.”
TASC was formed to protect consumers by self-regulating the debt settlement industry. Its efforts have become even more important in light of this report, Leuthold added.
To view this report, visit http://ftc.gov/sentinel/reports/sentinel-annual-reports/sentinel-cy2009.
About The Association of Settlement Companies
The Association of Settlement Companies (TASC) promotes fair business practices, consumer protection and industry standards for the debt settlement industry. TASC, founded in 2005, serves to protect consumers through an organization seal that represents best practices and standards of reputable companies. The organization also protects its member companies through lobbying efforts at the state and national levels, as well as awareness initiatives to educate consumers on debt settlement as a financial solution. All TASC member companies pledge compliance to strict association bylaws governing business practices and ethics. For more information, visit www.tascsite.org.
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2010-03-04T07:24:59-07:00
iPay Technologies (http://www.ipaytechnologies.com), the nation's leading provider of online bill payment solutions and service to more than 3,600 financial institutions, announced the availability of Billpayperless™, an electronic invoicing and receivables management system designed specifically for small businesses. With Billpayperless™ small businesses can invoice customers electronically, in a highly efficient and professional manner, and can accelerate their cash flow by getting paid faster through electronic payments.
Small businesses easily set up a branded website, hosted by iPay and integrated with PayPal's checkout functionality. On that website, their customers are given the ability to pay the small business online with a credit card or a PayPal account. When payments are made, the money is deposited directly into the business account and the owner is notified about the transaction by text or email. Invoices are automatically updated in the Billpayperless receivables management system to reflect the electronic payment.
Billpayperless™ plugs seamlessly into iPay Biz 2.0, the industry's most customizable small business bill pay solution, delivering a total solution that financial institutions can offer to their small business customers. As a result, Billpayperless™ helps drive incremental fee income while expanding a financial institution's small business customer base.
Additional important features of Billpayperless™ include:
- Set up electronic invoices that match the small business's branding
- Send invoices electronically via email as a PDF, or print and mail invoices
- Control access by setting user entitlements to delegate invoicing responsibilities
- Use templates to design customized invoices and payment websites
- Receive automated notices for invoices that need to be printed, unpaid invoices, unfinished invoices or delivery failures
- Store customer records securely online
About iPay Technologies
iPay Technologies provides online bill payment solutions and unmatched service to more banks and credit unions than any other bill payment provider. That includes more than half of the nation's credit unions and nearly 40 percent of the nation's community banks that use bill payment software. iPay's turnkey online bill payment solutions help financial institutions to attract, retain and grow their most profitable customers. iPay was ranked a top performer among bill pay processors by Aite Group in their 2009 industry impact report. Co-founder Dana Bowers is a regional 2009 Ernst & Young Entrepreneur of the Year. Additional information is available at http://www.ipaytechnologies.com.
2010-03-01T08:26:14-07:00
(http://www.researchandmarkets.com/research/0a2c0b/creditor_metrics) has announced the addition of the "Creditor Metrics: Consumer Approaches to Payment Protection Insurance linked to Personal Loans and Consumer Credit in Europe" report to their offering.
Finaccords report titled Creditor Metrics: Consumer Approaches to Payment Protection Insurance linked to Personal Loans and Consumer Credit in Europe, offers detailed and unique insights into the behaviour of consumers in the context of insurance that protects the payments linked to their non-mortgage loans. Based on a primary survey of consumers in France, Germany, Italy, Spain and the UK carried out between June and August 2006, the research provides valuable data describing the extent to which they take out insurance to protect themselves in the event that they are unable to make the payments associated with their personal loan or consumer credit contract. In addition to calculating the percentage of borrowers that buys creditor insurance in conjunction with their personal loans and consumer credit contracts in each country, the investigation also clarifies the types of insurance policy that consumers purchase - insurance designed and marketed specifically for protection of non-mortgage loan payments or other forms of protection policy?
Moreover, it reveals the proportion of non-mortgage loan borrowers covered for each of the four main risks - death, permanent disability, temporary incapacity and unemployment - and verifies where, how and when the consumer acquired the insurance. Finally, the report measures the degree to which borrowers are satisfied with their insurance and for consumers lacking insurance, it investigates why they have chosen to remain uninsured.
Key features of this report include:
- a comprehensive overview of the types of insurance used by consumers in each country to protect their personal loan and consumer credit payments: specific payment protection insurance and / or other types of protection product including life insurance and other policies specific to the country in question;
- accurate data describing the percentage of borrowers covered in the event of temporary incapacity and / or unemployment in addition to death and / or permanent disability;
- robust statistics illustrating the extent to which alternative distribution channels, such as financial advisers and brokers, direct sales by the insurer and affinity channels (for example, car dealers or retailers) are eroding the market share of the entities offering the original loan;
- reliable benchmarking of the point in time chosen by consumers with a personal loan or consumer credit contract to take out insurance that protects their payments;
- valuable insights into the reasons given by borrowers for not purchasing insurance (for example, because they have not had time, because it is too expensive, because they do not see the benefit).
Key Topics:0.0 EXECUTIVE SUMMARY
- Borrowers in Italy are least likely to have insured their loan payments in some shape or form
- while those in Germany are most likely to use policies other than loan payment insurance
- Cover in the event of temporary incapacity is most commonly purchased by UK borrowers
- while protection for unemployment is least frequently held by their counterparts in Italy
- German borrowers are most likely to acquire ins. from a source other than the original lender
- and respondents in the UK are most inclined to utilise a remote distribution interface
- The shorter duration of non-mortgage loans restricts the potential for retrospective cross-selling
- UK borrowers express the least satisfaction with the ins. that they have bought in this context
1.0 INTRODUCTION
- Finaccord
- European consumer research
- Creditor insurance
- Mobile telephone insurance
- Travel insurance
- European market, partnership and bancassurance research
- Research rationale
- Mainstream bancassurance markets are comparatively well documented
- whereas creditor insurance is not
- Creditor insurance: a poorly understood third bancassurance market?
- The Creditor Metrics series offers vital benchmarking data for lending insts. and underwriters
- Research methodology
- The research embraces a total of over 6,250 respondents across the five countries
- Research strengths and weaknesses
- A mixed Internet and telephone research methodology produces balanced results
- that offer a representative picture of consumers with at least one lending product
2.0 EUROPEAN OVERVIEW
- Introduction
- % of resps. holding a personal loan, consumer credit or car finance contract
- Respondents in France and the UK are most likely to possess a non-mortgage loan
- % of resps. with insurance that protects their non-mortgage loan payments
- Italian borrowers are least likely to have bought insurance to protect loan payments
- Attitudes towards ins. protecting non-mort. loans of resps. without cover
- UK borrowers are most likely to perceive this form of insurance as being too expensive
- Types of insurance used by resps. to protect non-mortgage loan payments
- Slightly over a third of insured borrowers in Germany use a loan payment protection policy only
- Risks covered by ins. used by resps. to protect non-mort. loan payments
- Borrowers reporting cover for temporary incapacity are most numerous in the UK
- while those in Italy are least likely to be have acquired protection for unemployment
- Insurance used to protect non-mort. loan payments - distribution channels
- The distribution share of the original lenders is strongest in France
- Insurance used to protect non-mort. loan payments - distribution interfaces
- UK borrowers are most inclined to buy this form of insurance through a remote interface
- Insurance used to protect non-mort. loan payments - point in time obtained
- Simultaneous sales of insurance to protect non-mortgage loans are highest in France
- while the potential for re-solicitation is apparently highest in Germany
- Attitudes towards insurance protecting non-mort. loans of resps. with cover
- Italian borrowers are most likely to express total satisfaction with this form of insurance
For more information visit
http://www.researchandmarkets.com/research/0a2c0b/creditor_metrics
2010-02-26T07:21:30-07:00
Alabama Attorney General Troy King and the state’s Securities Commission announced Wednesday that they had shutdown one of the largest debt settlement schemes in America.
Autauga County Circuit Judge Ben Fuller granted a request from the agencies to stop the illegal activities of a Prattville attorney, Keith Anderson Nelms, and his companies, Allegro Law LLC and Allegro Financial Services LLC.
Seven months ago, King filed a lawsuit to stop Nelms’ businesses and froze his assets while allegations were reviewed concerning Allegro’s unlicensed business, its ineffectiveness in reducing the debts of its clients, and its false representation of the services provided.
The Court's ruling now permanently prohibits Allegro and Nelms from engaging in any further trade practices and from operating a debt settlement or debt management business in Alabama.
According to press release from King’s office, the Court concluded that Allegro customers were deceived in the following ways: "(1)consumers were led to believe that Allegro Law, LLC was a law firm providing legal services, when in fact, consumers were not provided legal services; (2) consumers believed that Allegro was located in New York, when it was located in Prattville, Alabama; (3) consumers were not aware that they would be charged a fee of 16 percent of their total debt enrolled in the program and that 100 percent of their monthly bank drafts would go toward payment of that fee until the fee was paid in full; (4) consumers were deceived about the effectiveness of Allegro's program and the certification of Allegro's services; and (5) consumers were directed to stop making payments to creditors, which resulted in increased interest rates, late fees, further damage to their credit ratings, and additional and increased collection activities by their creditors."
Following the ruling, $12 million in assets will be held for approximately 15,000 Allegro customers nationwide, of which about 175 are Alabama residents. Refunds will be determined in the future.
"People who were in desperate circumstances came to Allegro for help, and instead they suffered greater harm. With this ruling, Allegro will not be allowed to cause further damage, and steps are being taken to restore as much money as possible to the victims whose trust was betrayed. My office will not permit any person or business to operate massive scams within our state," Attorney General King said in a statement.
2010-02-25T08:19:30-07:00
CHANTILLY, Va. – Online Resources Corporation (Nasdaq: ORCC), a leading provider of online financial services, today announced that it has launched a downloadable application enabling customers of client PeoplesBank to access mobile banking and payment services through the iPhone®. The Massachusetts-based $1.5 billion asset bank is now one of fewer than 50 U.S. financial institutions that currently offer the iPhone application through the App Store or iTunes®.
PeoplesBank has used Online Resources’ full suite of retail and business Internet banking and bill payment services since 1999. An extension of these online services, the new iPhone application allows users to view account balances, transaction history, schedule same day transfers, pay bills, and send and receive secure in-session messages. PeoplesBank customers simply register online for mobile access and download the iPhone application, which also works on iPad® and iPod® touch devices.
“Mobile access for online banking furthers PeoplesBank’s goal to provide our customers highly convenient services,” said Karen Buell, Internet Branch Officer for PeoplesBank. “Online Resources has played a crucial role in our mobile strategy, from development to marketing to customer care. This is the latest example of continued innovation we have come to expect from an online channel specialist and trusted partner.”
“PeoplesBank chose to be a frontrunner in providing mobile access because it views the online channel, and the convenience it provides customers, as critical to their success,” said Ron Bergamesca, executive vice president and general manager of Community Bank and Credit Union Services for Online Resources. “It was our priority to enable PeoplesBank’s customers with an iPhone app that optimizes their mobile banking experience, and we are pleased to provide the necessary technology, operation and marketing support required for this highly
sought after service.”
About Online Resources
Online Resources (Nasdaq: ORCC) specializes in powering financial interactions between millions of consumers and the company’s financial institution and biller clients, including 12 of the top 13 U.S. retail banks and 13 of the top 20 U.S. card issuers. Backed by its proprietary payments gateway that links banks directly with billers, the company provides web and phonebased financial services, electronic payments and marketing services to drive consumer adoption. Founded in 1989, Online Resources has been recognized for its high growth and product innovation. It is the largest financial technology provider dedicated to the online channel.
For more information, visit www.orcc.com.
2010-02-23T07:50:10-07:00
Atlanta, GA - The Ulzheimer Group, LLC and WebRecon, LLC announced today a strategic partnership to provide well qualified credit expert witnesses with information on newly filed credit-related lawsuits using WebRecon's consumer litigant database. The proprietary database allows for access to class actions and other consumer claims involving Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA) alleged violations. Both companies are market leaders in their respective areas.
The alliance will give The Ulzheimer Group's stable of credit expert witnesses the ability to proactively offer their expert witness services to the law firms and the attorneys engaged in consumer credit litigation significantly in advance of the timeframe during which expert witness reports are usually exchanged. Having an expert witness engaged earlier in the process allows for better discovery and better preparation for both sides of the litigation.
According to WebRecon CEO Jack Gordon, "The number of consumer credit related lawsuits is growing each year," he said, "The attorneys involved in these cases frequently find themselves in need of a good credit expert and there simply aren't many good ones on the market."
"Every case deserves to have a credit expert witness who truly understands credit reporting, credit scoring, credit damages, and credit law" says John Ulzheimer, CEO of The Ulzheimer Group, an experienced credit expert witness and an 18-year veteran of the consumer credit industry. "Access to WebRecon's database gives us the ability to quickly identify the law firms and the attorneys who are filing suit or defending credit industry players such as collection agencies, debt buyers, credit bureaus, and lenders. Securing a strong credit expert witness sooner rather than later frees up the attorneys to do what they do best, which is to represent their clients' interests rather than spending time searching for an expert witness at the eleventh hour and having to settle for anyone who picks up the phone."
The Ulzheimer Group, LLC is the only credit expert witness firm that exclusively retains credit industry veterans with significant and relevant credit experience. The company also provides training to enable their witnesses to leverage their knowledge for the best service of attorneys. "Anyone can read a few credit books and post an advertisement on some expert witness clearinghouse website," says Ulzheimer. "That doesn't make you an expert in credit and that's not a commitment to the service of our industry. Our partnership with WebRecon allows us to pair our industry experts with attorneys with sufficient lead time to do our job right rather than do it fast", he says. "We're thrilled to be associated with WebRecon."
About The Ulzheimer Group, LLC:
The Ulzheimer Group, LLC was founded in 2005 and is headquartered in Atlanta, GA. The Ulzheimer Group's core offerings, FDCPA Expert Witness, FCRA Expert Witness and Credit Damage Expert Witness services, have become highly sought after as credit litigation volume has increased.
The Ulzheimer Group's core team of expert witnesses have a collective 82 years of work experience in the consumer credit industry including time with credit reporting agencies, Fair Isaac and other relevant credit industry players. Since 2005, The Ulzheimer Group's expert witnesses have taken on over 50 credit-related cases representing both plaintiffs and defendants.
About WebRecon LLC:
Creditors and collection firms use WebRecon's services to easily segregate predictably litigious consumers from their databases. A significant percentage of consumer litigation is initiated by the same consumers over and over again, and screening them out of the general population can reduce lawsuits by as much as a third.
2010-02-22T08:02:43-07:00
NORCROSS, Ga.–– Teletrack, Inc., an industry-leading provider of credit and fraud risk solutions for non-traditional lenders, has added access to TransUnion credit information and scores to its specialty credit platform for non-traditional credit grantors.
Integration with TransUnion allows Teletrack’s non-traditional consumer finance customers to access a single-source specialty credit platform with all of the relevant risk management solutions they need to efficiently make business decisions. Built upon the largest single source of alternative credit performance data, Teletrack integrates and manages data from an extensive network of risk management solution providers. Having access to data from all of these providers through a single-source platform dramatically shortens the time and expense required for non-traditional lenders to achieve a competitive advantage in today’s dynamic consumer finance market.
“Dramatic shifts in the macro-economic environment and product innovations in consumer finance offerings have prompted our customers to increase focus on credit risk. Many are expanding into longer term installment, line-of-credit and related financial products, which require an increasingly thorough evaluation of risk,” said Dale Williams, president of Teletrack. “Intent on supporting this evolution of alternative credit products, we have invested heavily in creating a fast, flexible platform with access to a comprehensive set of premier risk management solutions, which includes TransUnion.”
Teletrack’s specialty credit platform offers companies an extended set of credit and fraud-risk solutions beginning with its own proprietary data assets, which include more than 240 million consumer credit records, representing approximately 39 million unique consumers. In addition, these solutions include access to a variety of external data services and scores such as multiple traditional credit databases, public-record data and historical bank account information to manage risk.
“Teletrack provides the foundation of the risk assessment process for our clients in the non-traditional credit market, but it is critical for these same clients to have access to extended risk management resources,” said Williams. “Accessing TransUnion information and scores through Teletrack allows our clients to offer services to consumers based on prior credit performance with non-traditional businesses, as well as within the broader credit market.”
The TransUnion database contains more than 200 million files, which profile nearly every credit-active consumer in the United States. This database contains information provided by more than 85,000 credit-granting institutions and is updated, audited and monitored on a regular basis.
“For more than 30 years, we have worked with businesses and consumers to gather, analyze and deliver the critical information needed to help businesses better manage risk and grow customer relationships,” said Steve Hamby, group vice president of TransUnion’s Resale Division. “Our relationship with Teletrack allows us to serve a unique customer base, bringing credit access to a traditionally underserved market while providing a more complete risk assessment to businesses that leverage our separate and unique databases.”
Since businesses that serve the financial needs of unbanked and under-banked consumers rarely report to traditional credit bureaus, Teletrack’s integration with TransUnion will facilitate the reporting of payment history for installment loans, open lines of credit and other consumer finance arrangements.
“Many of our clients have expressed a desire to help their customers build credit,” said Williams. “Our customers serve the approximately 100 million U.S. consumers lacking a detailed traditional credit history and Teletrack’s affiliation with TransUnion will enable these businesses to report payment history with ease.”
TransUnion credit reports feature four standard types of information: identifying information, credit history, public records and inquiries. Accessing TransUnion data and scores via Teletrack’s interface aids businesses in determining eligibility for new product offerings when used in conjunction with Teletrack trade-line credit data, and further minimizes risk when offering higher-dollar, alternative loans or open-ended lines of credit. TransUnion data can enhance credit screening when there is little or no record of the applicant in Teletrack‘s database and provide incremental segmentation of applications with a detailed history in the Teletrack database.
About Teletrack, Inc.
Founded in 1989, Teletrack, a wholly owned subsidiary of First Advantage Corporation, provides lenders and businesses with the actionable intelligence they need to make smart decisions. Businesses across the country access our consumer data for risk mitigation, identity verification, fraud detection and skip tracing. When businesses use Teletrack, they gain the right information at the right time so they can make the right decisions for the right reasons.
Teletrack’s databases access information from a variety of sources and contain unique, non-traditional consumer information that is not available from other sources. As a Fair Credit Reporting Agency (FCRA)-compliant consumer reporting agency, Teletrack gathers records from businesses across the country that cater to non-traditional credit consumers. For additional information, please visit the company’s Web site at www.teletrack.com.
About First Advantage
First Advantage combines industry expertise with information to create products and services that organizations worldwide use to make smarter business decisions. First Advantage is a leading provider of consumer credit information in the automotive, mortgage and specialty finance markets; business credit information in the transportation industry; motor vehicle record reports; employment background screening; occupational health services; applicant tracking systems; recruiting solutions; skills and behavioral assessments; business tax consulting services; corporate and litigation investigations; computer forensics; electronic discovery; data recovery; due diligence reporting; resident screening; property management software and renters insurance. First Advantage ranks among the top companies in all of its major business lines. First Advantage is headquartered in Poway, Calif., and has offices throughout the United States and abroad. More information about First Advantage can be found atwww.FADV.com. First Advantage is a wholly owned subsidiary of The First American Corporation (NYSE: FAF), a FORTUNE 500® company that traces its history to 1889. First American is America's largest provider of business information, supplying businesses and consumers with valuable information products to support the major economic events of people's lives. Additional information about the First American Family of Companies can be found at www.firstam.com.
2010-02-18T08:17:59-07:00
TransUnion's quarterly analysis of trends in the mortgage industry found that mortgage loan delinquency (the ratio of borrowers 60 or more days past due) increased for the 12th straight quarter, hitting an all-time national average high of 6.89 percent for the fourth quarter of 2009. This quarter marks the first time the mortgage delinquency rate increase did not decelerate after doing so for three consecutive periods.
This statistic, which is traditionally seen as a precursor to foreclosure, increased 10.24 percent from the previous quarter's 6.25 percent average. Year-over-year, mortgage borrower delinquency is up approximately 50 percent (from 4.58 percent).
The report is part of an ongoing series of quarterly consumer lending sector analyses focusing on credit card, auto loan and mortgage data available on TransUnion's Web site. Information for this analysis is culled quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.
Quarterly Statistics
Mortgage borrower delinquency rates in the fourth quarter of 2009 continued to be highest in Nevada (16.19 percent) and Florida (14.93 percent), while the lowest mortgage delinquency rates continued to be found in North Dakota (1.84 percent), South Dakota (2.46 percent) and Alaska (2.84 percent). Areas showing the greatest percentage growth in delinquency from the previous quarter were the District of Columbia (+20.2 percent), Louisiana (+17.7 percent) and Delaware (+14.8 percent). Unlike last quarter, no state showed a decrease in mortgage delinquency rates from the previous period.
The average national mortgage debt per borrower increased (0.29 percent) to $193,690 from the previous quarter's $193,121. On a year-over-year basis, the fourth quarter 2009 average represents a 0.47 percent increase over the fourth quarter 2008 average mortgage debt per borrower level of $192,789, which further suggests stabilization in housing prices, traditionally seen as a key ingredient for a sustained economic recovery.
The area with the highest average mortgage debt per borrower was the District of Columbia at $372,869, followed by California at $352,688 and Hawaii at $317,599. The lowest average mortgage debt per borrower was in West Virginia at $99,028. Quarter over quarter, the District of Columbia showed the greatest percentage increase in mortgage debt (+3.63 percent), followed by Vermont (+3.03 percent) and Georgia (+2.38 percent). Areas showing the largest percentage drop in average mortgage debt were Alaska (-3.5 percent), South Dakota (-1.58 percent) and Nevada (-1.26 percent).
Analysis
The news was not altogether bad for the mortgage sector in the fourth quarter, as bright spots appeared at the metropolitan level. Thirty-eight MSAs (Metropolitan Statistical Areas) showed a decrease in their mortgage loan delinquency rates since third quarter. Heading the pack for improving credit conditions were Corvallis, Oregon; Lafayette, Indiana; and Sharon, Pennsylvania. This compares to only 27 MSAs that showed a quarterly decrease in delinquency last year between third quarter and fourth quarter.
"At the national level, these results are in part due to seasonality effects. Consumers tend to run low on cash at the end of the year, after spending for the holidays, but before receiving year-end bonuses and tax refunds," said FJ Guarrera, vice president of TransUnion's financial services business unit. "At a more granular level, variations in delinquency highlight the fact that the recession and the eventual recovery are both regional phenomena tied for the most part to localized house price conditions and unemployment levels. It is good news that, while the median price of existing single family homes dropped almost seven percent between the third and fourth quarters of 2008, it dropped only 0.4 percent between the third and fourth quarters of 2009. We're not out of the woods yet. The continuing rise in foreclosures, in conjunction with low consumer confidence in the housing market, continues to hinder housing value appreciation and impede recovery in the mortgage industry. Furthermore, there is wave of adjustable rate mortgages (ARMs) that have yet to reset. Many of these are Option and Alt-A loans. When the interest rates on these loans reset many consumers potentially will not be able to meet their debt obligations.
"We are now facing the challenge of achieving consistent growth in home sales and thereby improving home values," added Guarrera. "Even with the introduction and extension of multiple tax incentives available to both home buyers and sellers, home sales decreased in December of 2009. As the unemployment rate is expected to hover near 10 percent for the remainder of 2010, consumer spending will likely remain tepid."
Forecast
TransUnion's 60-day mortgage delinquency rate forecast made at the beginning of the year fell in line with year end 2009 actual results -- falling short by only 2.5 percent. TransUnion's forecasts for 2010 are slightly more pessimistic than before due to questions concerning house price appreciation, the continued high level of unemployment, and the potential eroding of consumer confidence as the effects of the government stimulus begin to fade.
"We believe that the 60-day mortgage delinquency rate will peak between 7.5 and 8 percent over the course of 2010, depending on the prevailing economic conditions associated with the housing market," said Guarrera.
With regard to regional forecasts, Nevada is still anticipated to experience the highest mortgage delinquency rate by mid-2010, reaching as high as one in five mortgage borrowers. North Dakota is expected to continue to exhibit the lowest mortgage delinquency rate by the summer (less than one in 50 borrowers, with forecasts showing a downward trend over the course of 2010.)
TransUnion's Trend Data(SM) database
The source of the underlying data used for this analysis is TransUnion's Trend Data, a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels.
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 employs associates in more than 25 countries on five continents. www.transunion.com/business
2010-02-16T07:13:04-07:00
