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Using Google Maps to Prevent Fraud

posted on 2012-11-29 by Dean Kaplan

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.




How to Determine the Likelihood of Collecting on a Judgment

posted on 2012-11-14 by Dean Kaplan

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. 




Using ROI to Decide if you should Sue a Customer for Unpaid Invoices

posted on 2012-10-29 by Dean Kaplan

 

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!

posted on 2011-10-04 by Jerry Ashton

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."




Understanding the New Maryland Rules for Collecting Debt

posted on 2011-09-19 by Jeffery Scholnick

Beginning January 1, 2012, new Maryland rules will make it tougher for debt buyers to collect their debt

The Baltimore Sun reported on September 7, 2011, that Maryland’s Court of Appeals has enacted new rules to protect Maryland debtors- http://www.baltimoresun.com/news/maryland/bs-md-court-of-appeals-ru... .

Reading the new Rules, http://www.courts.state.md.us/rules/rodocs/ro171.pdf , at p.4 through 11, it is clear that the Court is reacting to the excesses of debt buyers who have been forced to dismiss thousands of debt collections cases. Just about ten days ago,  LVNV Funding LLC, was forced to write off about $10,000,000, in debt owed by approximately 3,500 people, as part of a class action suit, see article in Baltimore Sun
http://www.baltimoresun.com/business/bs-bz-debtors-settlement-lvnv-...

The new Maryland Rules, 3-306, 3-308 and 3-509, apply to all cases filed after December 31, 2011. Given the fact that tens of millions of dollars of debt were sold to debt buyer who did not know about the new Rules, the interesting question, is, “What will happen to all of that debt?” I cannot imagine that the debt buyers required the detailed records necessary now to prove their cases. Particularly, if the debt was sold more than once, the chain of paperwork may well be lacking. Debt buyers who purchase large blocks of debt may not be able to obtain the paperwork on each debt to prove their case. As a bankruptcy attorney who is consulted by debtors on a daily basis, I will recommend to them, even more so than in the past, that they should go to court and demand strict proof of the purchased debt. It will be a brave new world after January 1, 2012.
Many of the new requirements in the overhauled Rules specifically do not apply to original creditors. In contrast, if suit is filed by a plaintiff who is not the original creditor, this debt buyer will have to either show: (1)proof of the original debt with proof of debtor’s signature; (2) a bill with actual purchases; or (3) proof from the original creditor of the debt.
The requirements on the debt buyers will now be extremely high. The new Rules may even discourage many companies from buying debt of Maryland residents.
Here are some of the changes:
If the plaintiff wants to get a judgment by affidavit and is not the original creditor, it will have to show the chain of custody of the debt from the original creditor until plaintiff’s purchase of the debt as well as a bill of sale for each sale in the chain.
If the plaintiff attempts to obtain an Affidavit Judgment, and is making a claim for interest on the debt and/or attorney fees, the plaintiff will have to submit the following:
1. an interest worksheet that follows a new form to be prescribed by the Chief Judge of the District Court;
2. “sufficient proof evidencing” the claim for attorneys’ fees, and that the fees are “reasonable,” Rule 3-306 (c);
3. an “Assigned Consumer Debt Checklist,” based on another new form to be created by the Chief Judge of the District Court;
4. all necessary documents to comply with the new Checklist (the documents must be “clearly numbered and referenced per Rule 3-306 (d));
5. In addition, the Plaintiff will need to submit one of the following:
a.  a document signed by the defendant evidencing the debt or that the account was opened;
b.  a bill of sale, purchases, payments or other use of the credit card or account; or
c.  an electronic printout of such purchases or payments;
6.  plaintiff will have to submit a “chronological listing of all the prior owners of the debt" and the applicable dates and a certified or “properly authenticating bill of sale” for each transfer;  

7.  the Affidavit will have to include the name and last four digits of the account number for the original creditor and the nature of the debt;

8.  if the account was charged off, the Affidavit will need to include information as to when and the amount of the charge-off, as well as an itemization of additional fees and payments made after charge off and the date of last payment; and                                                                                

9.  (in direct response to companies such as LVNV Funding, who were not licensed properly as a debt collector when they filed suit), the plaintiff must include in the Affidavit their Maryland debt collection licensing numbers and dates issued.

If the Debtor files a Notice of Intention to Defend and there is a trial, what does a Plaintiff have to prove? According to the new Rules, if a plaintiff is not the original creditor, the Court “shall consider the requirements” listed in (1) through (9) above before granting a judgment. What does it mean that the Judge should “consider the requirements”? The new Rules give the Judge a certain amount of flexibility, but, clearly, some Plaintiffs, who bought debt that was sold three or four times, will not be able to obtain judgments against the debtors.
So, if you get a call from a client after December 31, 2011, who has been sued for a debt and the plaintiff is a company who bought the debt from a credit card company or store, you should tell your client to go to court and make the plaintiff prove their case. Your client has nothing to lose by going to Court and they just might be surprised to find that that debt buyer cannot prove their case! Furthermore, depending on the size of the debt, you may now be able to assist them in defending the charge.  Depending on whether the plaintiff can fulfill the nine requirements above, there may sufficient basis for you to charge a fee for taking the case to trial.

The devil (and the debt) will now be in the details.  :)





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