A Letter from the President
When is the last time you rated the performance of your collection agency? For some of you this is all you do. But, for many of you, it can be a confusing process. Here are some guidelines I presented to a healthcare association recently that might be good food for thought for you as well.
TAG’s Top 10 Attributes of an Awesome Collection Agency
1. People
Are the agencies people positive? Do they act with professionalism and integrity? Are they knowledgeable and active in the industry? Do you like them?
2. Results
Do they provide outstanding net-back? This is not necessarily, and probably isn’t, the lowest price. Do they share their work standards with you? Are those work standards tailored to your type of debt and your philosophical view toward recoveries?
3. Technology
Is your data safe? Is there a solid disaster recovery plan? Do they provide a useful web portal to access data on your accounts? Do they provide innovative predictive dialing capabilities?
4. Customer Service
Are they available when you need them? Do they understand your debt? Do they possess the proper “service” mentality? Are they easy to work with?
5. Compliance
Do they comply with all laws that affect your business as well as theirs? Do they self-audit against their work standards? Are complaints kept to a minimum?
6. Collection Processes
Are they shared with you? Do you get the opportunity to influence them? How do they skip-trace? How do they manage their legal process?
7. Reporting
Are you able to get the information you need, when you need it? Is there a 24/7/365 way to get this information?
8. References
Do they have solid references that will speak openly with you about their experiences with the same agency?
9. Auxiliary Services
Do they offer services beyond bad debt collections that span the whole revenue stream, including credit policy review, early-stage delinquencies work, debt purchasing?
10. Trust
Do you trust them? Do they under promise and over-deliver? Are their sales people easy to work with and knowledgeable? Have they earned the right to serve you?
Picking partners to help you manage your receivables is not an easy task. Utilizing the tips above will provide you with a quick checklist and make this job more successful and less stressful. Have a great month!
How Would Workers Use An Extra Paycheck to Improve Their Financial Wellness?
U.S. workers would invest an extra paycheck or pay down debt with it, rather than use the money to buy themselves an extravagant gift or make a down payment on a new car, according to a new survey of managers and executives at small– to medium–sized companies conducted by Ceridian, a managed human resource outsourcing solutions company.
When asked, “If you could take one paycheck and do anything with it, what would it be?” 40 percent of respondents reported that they would invest the paycheck, followed by 29 percent of respondents who would use the money to pay down debt. Save the money for a rainy day ranked third at 15 percent. Less popular responses were starting a home improvement project (7 percent), and contributing to a favorite charity (5 percent). Buying an extravagant gift for themselves or making a payment on a new car were decidedly lowest on the list of choices. Managers were more likely than executives to report that they would pay down debt with an extra paycheck; managers were largely split between paying down debt and investing the money.
Paychecks and personal finance choices have the potential to impact employee productivity. In the American Payroll Association’s 2005 Getting Paid in America Survey, nearly 74 percent of people surveyed revealed that it would be very or somewhat difficult to meet current financial obligations if their next paycheck were delayed for a week.
Increased Social Security Awareness Driving Many Consumers To Plan for Retirement
While many consumers continue to express a great deal of uncertainty and worry about how well they are preparing for retirement, concern over Social Security has led to additional planning, saving and investing for retirement, according to a new Wachovia survey.
Wachovia's annual Retirement Fitness Survey revealed that more than 80 percent of consumers said Social Security will be important to their own retirement well–being, yet nearly half are not confident that it will be available to them when they retire.
As a result, 51 percent of consumers say they are making changes to how they prepare for retirement. Those changes include increasing their retirement savings in 401(k) plans and IRAs, planning more precisely, investing in alternate investments like real estate and working with a professional advisor.
In recent years, the future of Social Security has been a topic of national debate, and several companies have announced plans to freeze their pension plans. In his State of the Union address, President Bush called on Congress to create a commission to examine the full impact of baby boom retirements on Social Security.
Wachovia's annual Retirement Fitness Survey examined consumers’ emotions along with their actions, or what they are doing to prepare for retirement. The national survey of 2,100 consumers follows Wachovia's inaugural Retirement Fitness Survey released in 2005.
While more consumers are responding to issues over Social Security, the number of those who are concerned about retirement is similar to the initial survey. More than half of consumers expressed uncertainty (58 percent), worry (55 percent), or fear of making a mistake (50 percent) when preparing for retirement. Also, 43 percent reported feeling overwhelmed, saying there are too many choices of where and how to invest, the market requires constant monitoring or they can't afford to save. Women, on average, were more likely to express one of these emotions.
Consumers were asked in the survey to provide tips to help others get in better retirement shape. Their top responses included talking to an advisor (16 percent of respondents); setting up automatic deductions or direct deposits into accounts (12 percent); depositing small amounts of money every month (12 percent); contributing to an IRA 0r 401(k) (11 percent); and budgeting and tracking expenses to find money to save (8 percent).
Total Bankruptcies Eclipse the Two Million Mark in 2005
Bankruptcy filings eclipsed the two million mark for the first time in the United States as 2,078,415 filings were reported in calendar year 2005, according to data from the Administrative Office of the U.S. Courts. The total in this 12–month period ending Dec. 31, 2005, represents a record 30 percent increase compared with the 1,597,462 total filings for the same period in 2004.
Driven largely in response to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), consumers provided 98 percent of the overall total filings, the highest concentration of consumer filings on record, as nonbusiness filings during the 12–month period ending Dec. 31, 2005, increased to a record 2,039,214, which was a 31 percent increase from the total of 1,563,145 of the same period in 2004. Business filings also increased to 39,201 for the 12–month period ending Dec. 31, 2005, representing a 14 percent increase from the total of 34,317 from same period in 2004. This is the highest total of business bankruptcies in a calendar year since 2001’s total of 40,099.
“It is ironic that, at least in the short term, a law Congress hoped would reduce bankruptcies instead caused the largest upward spike in history,” said Samuel J. Gerdano, ABI executive director. “Bankruptcies have, in fact, fallen dramatically so far in 2006 under the new, more–restrictive law."
The record high of 667,431 bankruptcies recorded during the 4th calendar quarter of 2005 (Oct. 1–Dec.31, 2005), is representative of the many debtors who rushed to file prior to the Oct. 17 implementation date of BAPCPA.
October 2005 filings alone totaled 630,497, representing 95 percent of the filings for the three–month period and 30 percent of the 12–month period ending Dec. 31, 2005. Nonbusiness filings in October 2005 reached 619,588, which represented 30 percent of the nonbusiness filings for the 12–month period ending Dec. 31, 2005, and 95 percent of the 654,633 total nonbusiness filings for the 4th quarter of 2005. The 10,909 October business filings were representative of 28 percent of the 12–month period ending Dec. 31, 2005, business filings and 85 percent of the 12,798 business filings for the 4th quarter 2005.
Largely as a result of the BAPCPA, dramatic decreases in filings were seen during the months of November and December 2005 as the combined filings of 36,934 for those two months represented just 1.78 percent of the total 12–month period ending Dec. 31, and 6 percent for the 4th quarter 2005.
November’s total filings dropped to 14,324, which represented less than one percent (0.69 percent) of the total for the 12–month period ending December 2005 and 2 percent of the 4th quarter total. The total of 13,643 nonbusiness filings in November was representative of less than one percent of the total nonconsumer filings (0.67 percent) for the 12–month period ending Dec. 31, 2005 and just 2 percent of the 4th calendar quarter nonbusiness filings. Business filings experienced a similar decline as the 681 filings in November represented less than 2 percent (1.74 percent) for CY2005 and 5 percent of the 2005 4th quarter’s total of 12,798. By comparison, 2004 totals for the month of November were 122,796 total filings, 2,643 business filings and 120,153 nonbusiness filings, each representative of nearly 8 percent of the 12–month total for their respective categories.
Total filings increased in December 2005 to 22,610, which represented a 63 percent increase over November total filings, but just over 1 percent of the 12–month period ending Dec. 31, 2005, total (1.09 percent) and just over 3 percent (3.39 percent) for the 4th quarter 2005.
Consumers Lack Basic Facts About Their Credit Cards
A new national survey reveals that consumers know very little about the credit cards they use most often, including annual percentage rates (APRs), credit limits and basic credit card fees. The survey, conducted by Princeton, N.J.–based Braun Research, was released by personal finance expert Lynnette Khalfani, author of the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.
The survey results suggest that some of the problems may begin with the credit card offers consumers receive in the mail. Nearly one–third of the cardholders surveyed said they either don't read or don't understand the fine print contained in mail offers. More than 20 percent of respondents had trouble locating pertinent information, such as the APR being charged on a credit card.
The good news is that consumers want more information. A full nine out of 10 consumers say they want banks and other credit card issuers to highlight the fine print in their mail offers and make them clearer and easier to understand.
The most troubling findings of the survey revealed:
Nearly 44 percent of respondents did not know the APR charged on their credit cards, and 20 percent of cardholders did not know their credit limit.
Nearly seven out of 10 people surveyed said they didn't know whether being late on a payment to another creditor could cause their credit card company to hike their interest rate, suggesting a vast majority of consumers are unaware of the “universal default” clause present in most credit card agreements.
When asked what information card holders would most like included in credit card offers, nearly 40 percent said they want clear terms and information outlining the specific actions that can cause credit terms to change, such as paying a bill late or going over a card’s credit limit.
Consumers are not taking the time to shop around to find the best card to fit their needs. More than 40 percent of the cardholders surveyed accepted the credit cards that were offered to them without comparing them to any other offers.
