Monday, July 13, 2009

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Debt collectors oppose call for dunning laws By INDERIA SAUNDERS ~ Guardian Business Reporter ~ inderia@nasguard.com: A local collections agency asserts aggressive collection efforts are needed in an economy saddled with a 600-percent increase in delinquent accounts — his comments flying in the face of calls for dunning law to match those of the U.S. "There is nothing wrong with calling people on the job, we call whatever numbers are provided to us," said Rory Higgs, president of APEX Management Services Ltd. "Bear in mind [that] nobody, absolutely nobody likes to be contacted when it comes to outstanding debt so we're starting from a deficit (position)." His statement comes as Guardian Business follows growing calls for government to so-called dunning laws into effect, hemming in what exactly collection agents can and cannot do in pursuit of an account. The term specifically refers to the process a creditor goes through in communicating with customers to ensure the collection of accounts receivable. The end of that process involves handing the account to a collection agency. In the U.S. and Canada, the hands of that agency are tied in that they are specifically prohibited from telephoning a debtor at work if told not to. Even if phoning them at home, the collector is restricted in the hours those calls can be made. And shaming techniques of contacting relatives, employers and friends of a debtor are strictly forbidden. In fact a debtor can legal direct the agency to cease all and any attempts at contact what so ever. None of that is now the case in The Bahamas where banks and other lenders are grappling with soaring delinquencies as the economy remains mired in recession. Debtors are now complaining of the same kind of aggressive dunning outlawed in the U.S., although none are pointing to APEX. The industry as a whole has moved to counter suggestions that the government must move to rein in their collection approach. How exactly each deals with stubborn delinquent accounts varies. The situation takes a balance of aggressiveness and understanding, Higgs said, asserting that the use of certain guidelines were best to deal with the situation. "We're members of the American collectors association and in order to be a member you have to follow those standards set by the Federal Debt Collection Processing Act," he said. "There are certain guidelines we have to follow with regard to how we deal with a person we're seeking to get money from and we follow those guidelines." They're guidelines that could see a collection agency ceases calling persons at their job at the debtor's request. To avoid any angry exchanges, Higgs also works on an automated dialer system that makes roughly 1,000 calls in an hour leaving messages for call backs. In his experience, said persons are more receptive to this because they want to have the matter resolved and can return the call at a more convenient time. While he has seen a growth in his business, Higgs said his case load reflects the accounts that are past 90 due and in most cases were in arrears way before the economic decline. They are accounts centered around consumer debt ranging from credit card payments to auto loan payments. He is now pointing to the success rate of collection agencies as proof that their methods are warranted. "Around 60 percent of the matters actually pay off," he said. "And we have a lot of matters that stall in court and are working on having the court deal with those matters more efficiently." But questions about how Higgs and others go about collecting those past-dues are likely to get amplified over the next several months are more and more lenders turn over those accounts to collection agencies. Monday, July 13, 2007