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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.
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