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Before extending credit to potential customers, companies need to validate the information provided on the credit applications. When fraudsters turn in their credit applications, they are hoping that creditors will not carefully check the information, thereby allowing fraudulent purchases. One important step in any credit application verification is to confirm the physical address of the customer is legitimate and a commercial building. This can be accomplished very quickly by any internet user using Google Maps.
Using your web browser, go to Google Maps. You will see an address field near the top of
the page. Enter the customer’s business
address in this field. Using the
satellite view zoom in to quickly determine the type of building at the
address. If it is available, use the
street view for an even closer look.
Continue to investigate if:
· the address is clearly a residence, not a commercial building;
· the signage in front of or on the building does not show the customer’s name;
· The building does not look like it would be appropriate for the type of business the customer has.
One important step is to determine if the address is a mailbox service, executive suites building, or a UPS store. In our experience, these types of buildings are frequently used by fraudsters.
There are several ways to determine if a commercial building is a mailbox service such as a UPS store. When you search an address on Google Maps, it will typically list the names of the businesses located at that address. Keep researching if:
· more than one business is listed at the address;
· the businesses at the address list suite numbers, which may actually be P.O. box numbers;
· The name of one of the businesses listed is recognizable as a mail service, package, copy or print business.
Once in a while, your Google Map search will yield no result. If this happens, copy and paste the address into your regular search engine for a quick search. Recently, when we ran a Google Maps search the address did not show a UPS store at the address. However, when we ran a search engine search, the result was a UPS store address and phone number which turned out to be fraudulent.
It is always risky to ship product to a P.O. Box because you will have no way to verify if your customer actually took possession of the merchandise. The only proof you will have is that the executive suite or mailbox service received the product. In this situation, if the customer ends up not paying for the merchandise, any collection effort will be unsuccessful.
If you determine that the customer’s address is a mailbox service, request the physical address and verify it. If the address is inside a mall, confirm that the physical location is a true store and not a kiosk in common space. Validate any home addresses listed using Google Maps and search engine searches. In a case where the business does not have a permanent commercial location or if the customer provides a personal guarantee, it is critical to request and verify the home address.
Confirming a customer’s business address is one of several steps to preventing fraud. For other tips on fraud prevention, visit The Kaplan Group’s website for free downloadable resources.
Just winning a lawsuit against a non-paying business customer does not guarantee that the debt will actually be collected. In fact, depending on the circumstances of the debtor, there is a significant chance that no money will be collected, and the creditor's loss will be even higher as they will also be out the costs of the lawsuit in addition to the original debt owed. For this reason, it is important for any creditor to determine the realistic chances of collecting on a judgment before any lawsuit is pursued.
Below is a list of questions that need to be answered when determining the likelihood of collection:
· Will the customer still be operating by the time the judgment collection process begins? (Remember, the legal system can be extremely slow and time consuming).
· Will the customer’s cash flow or assets provide the monies needed to satisfy collection of the judgment?
· Does the customer have secured creditors which may potentially block the collection of the judgment?
· Does the customer have any previous judgments or liens attached to the business which may increase the difficulty of collection or indicate that others have not been able to figure out how to collect judgments?
· Is there personal liability for the company's obligation, creating a secondary source of repayment?
· Does the person with personal liability possess income or assets which could be used to satisfy the judgment?
· Does the owner of the business have personal assets that could be put into the company even if the company is not personally liable for the outstanding debt?
· Can the owner of the business and/or the guarantor be found so that pursuit of the judgment collection can occur?
The more of these questions that can be answered, the more accurate the estimate of judgment collectability will be. It is harder to justify the cost of a lawsuit if you aren’t reasonably confident that the judgment can be collected.
We have several free resources on our website, including two short videos explaining commercial collection litigation and the judgment collection process as well as downloadable infographic that guides you through the process of determining if a judgment is likely to be collectable.
What does ROI (Return on Investment) have to do with choosing to sue a business customer who has stopped paying for product received? Everything! There are costs involved in filing suit against a customer. In addition, the legal process is typically very slow, and the chances of collecting the debt owed goes down the older the debt becomes. For these reasons, it behooves a company to look at the ROI of a law suit before any legal action is taken.
To estimate a lawsuit’s ROI, the company must look at four things:
· the original debt amount;
· the lawyer’s contingency fee;
· the chances of successfully collecting the debt;
· and the company’s out of pocket court costs.
The total amount that could potentially be collected is the dollar amount of what is owed by the customer. From this total amount, the contingency fees of the lawyer must be deducted. If the litigation contingency fee is 35%, the Net Potential Recovery would be the original amount plus interest and recoverable costs less the contingency fee. Next we estimate the likelihood of collecting from the customer. Factors such as if the business is likely to continue operating, the quality and value of the customer’s asset base, other liens or judgments, must be looked at to arrive at this percentage estimate. Apply this percentage to the Net Potential Recovery amount to calculate the Expected Value of Recovery. The difference between the Expected Value of Recovery and the company’s out of pocket costs to litigate is the estimated return on investment..
If the ROI is large enough to make filing suit against the customer worthwhile, then the company should move forward with a lawsuit. If, however, the ROI is not significant, then it is probably better to not invest time and money in litigation. The Kaplan Group is a commercial collection agency specializing in large claims. More information including an infographic depicting the decision process behind filing a lawsuit and sample ROI calculations can be found on our website.
A Cause to Support – the ARM Industry Needs To Occupy Wall Street!
I know, I know, we're getting into the game a bit late, but this may be our final, great chance to not only get positive press but to further our own agenda as well. It's time to Occupy Wall Street.
What's that, you say? Leave our comfy desks and auto-dialers and join a bunch of recycled or reincarnated Hippies to bite the manicured fingers on the hand that feeds us, to attack the very same financial institutions which has filled our calling queues and pockets for oh-so-many glorious years? Yes.
Hear me out as I present a considerable number of reasons for us to weigh in on the side of these protestors and others of us who comprise the "99ers." (1% rich; 99% poor)
#OccupyWallStreet (on Twitter) is a movement that began in NYC on September 17 with an encampment in the financial district. The occupiers proclaimed their methods to be non-violent and their purpose to be the ending of the moneyed corruption of this country.
Like a spark to tinder, it caught fire.
What started out as an isolated protest group unacknowledged in the mainstream press has spread nationally and internationally, reaching Madrid, San Francisco, Los Angeles, Madison, Toronto, London, Athens, Sydney, Stuttgart, Tokyo, Milan, Amsterdam, Algiers, Tel Aviv, Portland, Chicago, Palestine, Phoenix, Montreal, Cleveland, Atlanta, Kansas City, Dallas, Orlando and Miami…and on and on.
Notice any positive parallels? Our industry is certainly people-powered, we can be found in cities nationally and internationally, we assert that our methods are non-violent, and our purpose is to…make a buck or two? (That last doesn't seem catchy enough.)
And, we have common ground in attacking Wall Street transgressions. After all, have these people not undermined the very source of our revenue – uncontested debt? Legitimate debt, legitimately owed, has always given our industry a fairly decent shot at working hard to both satisfy our clients and make a fair return on that effort.
Thanks to Wall Street, this is becoming impossible.
Think about it. Even if a debt we are pursuing is undisputed and acknowledged by the debtor, thanks to the ripple effects of the Great Recession (which no one disputes was brought on by the greed and excesses of Wall Street), fully one-sixth of U.S. citizens live in poverty and overall some 18% of our workers are either unemployed or underemployed.
A few examples of the getting-blood-out-of-turnips problem we are facing:
Medical. Roughly 40% of consumer collections is in the medical field. With roughly 50,000,000 Americans without health insurance and health-profiteering unencumbered by legal strictures adding to what is owed, how do we expect to collect from a shrinking pool of those who are still well and still employed?
School Loans. Wall Street moved into "Higher Ed" a few years back by bankrolling For-Profit Colleges. They, in turn, charged excessive tuition (by any standard) and then annually proceeded to dump students into the workforce burdened by tens of thousands of dollars in loans. Student debt is reaching 1 Trillion dollars – already having passed credit card debt – and is seen as the next "meltdown bubble." Student loan default rates are vaulting into the teens, and fully 50% of these defaults are from students who attended for-profit colleges.
Our industry has already begun to collect on those accounts, and we are surely "feeling their pain." Try getting as much as a $50/Month payment out of a kid flipping hamburgers at a local fast-food outlet who is saddled with as much as $100,000 in debt.
In fact, there is a major student-stoked national campaign that is demanding that ALL student loan debt be forgiven – and it is gaining momentum. Put THAT in your portfolio and smoke it.
Credit Cards. Speaking of credit cards – a major source of lust and revenue for debt purchasers as well as traditional agencies – but is it really profitable – or even ethical to collect on? Banks not only ran up these losses by the unconscionable escalation of interest rates and service fees, but then sold our industry hundreds of millions of dollars in "tainted" write-off's which never should have been sent out to third-parties to start.
I am referring, of course, to the famous "Linda Almonte" whistle-blowing case at JP Morgan Chase which is still wending its way through the halls of government oversight agencies. That shoe, when it drops, will not land lightly. It will shake the banking – and our – industry.
Mortgage/Home Loans. Faulty foreclosure paperwork, loans proven to be incomplete and in some cases downright fraudulent, and the outrageous robo-signing of mortgage with or without proper authentication; how it is that not one banker or wall street executive has been arrested?
Things are so rotten in Bankster Land that the Attorney Generals in a number of states are refusing to release a number of our major banks from lender liability. Banks have been seeking broad releases to protect them from legal claims growing out of securitization, servicing, loan costs, unresponsiveness to requests for modification and robo-signed foreclosures, etc. Santa will not grant them their wishes this year.
Collateral Damage. Yep, you know them well – the people who acknowledge their debts, are more than willing to pay them off, but due to job or home loss brought about by a bankrupted economy – have barely enough to meet even basic needs for food and shelter.
Now, let's get back to our thesis – that the ARM Industry would be well-served by joining our young and unemployed friends on the protest lines. Let's let them know that they are not the only ones who feel, in their words, "wronged by the corporate forces of the world" and that "upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors."
As responsible citizens and business owners, we must stand up for the legitimate rights of the debtors, our neighbors.
After all, we want our neighbors to stand up for OUR legitimate rights, yes? See you at "Liberty Square."
Do we need more proof Washington's not working for middle class families? We got it once again this week.
The big banks and their army of lobbyists couldn't stop the creation of a new Consumer Financial Protection Bureau, so now they are trying to undermine its work, enlisting their Republican friends on the Senate Banking Committee to stop the nomination of Richard Cordray to lead the agency -- just to try to slow up the agency from doing its work.
It's outrageous -- and we've got to hold them accountable.
I'm starting a petition: Sign on now to call on the Republicans on the Senate Banking Committee to protect the interests of middle class families, to confirm a director for the Consumer Financial Protection Bureau, and to let the agency do its work.
The goal of this new agency is to protect consumers by ending the tricks and traps and fine print banks have used to make it hard to understand and compare the costs of mortgages and credit cards. We need to hold Wall Street accountable for issuing the kinds of deceptive loans that nearly brought our economy to its knees in 2008.
I fought hard for these new protections and faced an army of lobbyists to hold the banks accountable. I am proud to have been part of the David vs. Goliath effort that led to the passage of this new agency. I was also proud to help set up the new agency over the past year as an assistant to the President.
We've made a lot of progress toward fixing the broken credit markets and preventing the next crisis, but the enemies of reform are at it again.
It's time for Republicans in the Senate to put the interests of hard working middle class families over the special interests of large financial institutions. We've got to speak out and make sure our fellow Americans know the truth.
Sign my petition to Senate Republicans now: Urge them to put the interests of families first and to allow this consumer protection agency to do its work!
We need clear rules to fix broken credit markets, protect consumers, and get our economy growing and creating jobs.
I've made my life's work fighting for middle class families and pushing back against special interests. I know what it means to live one pink slip or one health crisis away from economic disaster, because I did. That's why I'm working so hard to change things.
But I can't do it alone. I need you to stand with me, today. I need you to make this an issue that the Republicans can't duck.
Sign my petition to Senate Republicans now: Urge them to put the interests of families first and to allow this consumer protection agency to do its work!
And I'll make sure the petition and our signatures get delivered to the Republicans on the Senate Banking Committee.
Thanks so much for your help.
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