FTC Publishes Top Consumer Complaints- released March 2011

17 03 2011

The Federal Trade Commissions compiled a list of consumer complaints for last year, 2010..  Among complaints over internet services, imposter scams, internet auctions, foreign money and counterfeit scams, identity theft topped the list captivating 19% of complaints. Debt collection ranked number 2 for top consumer complaints.

Identity Theft is estimated to affect about 9 million Americans a year. Most victims do not find out until they are denied from mortgage or car loan because of credit issues, receive letters from collection agencies for debt that the person never incurred, or receive something in the mail about a house the consumer never bought, apartment they never rented, or a job they didn’t have. It is important for a consumer to protect by monitoring their personal information, such as their credit scores, to prevent identity theft or catch it early before too much damage is done.

The FTC reported 144,150 collection complaints in 2010.  Illinois Attorney General Lisa Madigan claimed that her office received more than 7,000 debt related consumer complaints last year taking the number one spot on her costumer complain list.  With more people struggling to pay off mortgage loans and credit card debts, consumers worry about their financial future.  For the Illinois Attorney General’s complaint list, identity theft came in at number 2 with more than 3,600 complaints about fraudulent credit card charges, utilities opened in the victim’s name, and bank fraud.

For the first time, Imposter Scams made the list of complaints for 2010.  This growing crime includes people posing as friends, family, or trusted businesses or government agencies to get consumers to send them money.  Consumers should be wary of any entity that wants them to wire money, pay to collect winnings, or claim to be with a government agency or someone you care about, or want you to act immediately. 

A favorite impostor scam during tax season is the fake Internal Revenue Service e-mail. The target of the fraud gets an e-mail with an official-looking IRS logo demanding a credit card number to settle a tax debt. If the potential victim doesn’t come through, the e-mail warns, the agency will take action by garnishing the person’s wages or placing a lien on his or her home.

The IRS doesn’t contact taxpayers by e-mail or even by phone, but by email.  A person who doesn’t know that might be shaken enough to click on the link in the e-mail and plug in a credit card number.

Another impostor fraud, the grandchild scam, used to target seniors by phone. An elderly person would get a call from someone claiming to be his or her grandchild in distress, wrongly arrested in a foreign country and desperately in need of money to get out of jail. But because the grandchild scam required a gullible senior, who was perhaps forgetful or hard of hearing, con artists have moved on to pastures where the potential victims are more plentiful: social networks.

Impostor Scams should contact the FTC immediately http://www.ftc.gov/

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Small Business Loans for 2011 Unlikely: Businesses turn to Collections for Cash

3 12 2010

Cash is needed in order for any business to operate.  In the past it was easier for Banks to lend money in order for the business to continue operating but since banks have tightened up giving loans to small businesses, many have been forced to max out their credit cards carrying further debt into 2011. Businesses will continue to need economic relief. The question is “where will it come from?”

 

Fico claims that banks as Lenders may not be able to meet the credit demands of small businesses seeking relief in the future.  59% of those surveyed expect small businesses to request a higher amount of credit over the next six months, but less than 37% expect lenders to increase the amount of credit given to those small businesses.

 

According to Standard & Poor’s Data, only four companies last month received leveraged loan covenant relief for a total of $883 million in leveraged loans.  This is the lowest amount of relief given since February 2008.

 

S&P expects covenant relief activity to be high in the beginning of 2011 as checks due to lender agreements from 2008 and 2009 are paid.  But as the year goes on, businesses may not be able to get relief from banks.

 

Until problems in mortgage portfolios are solved and private sector employment grows, the gap between credit demand and credit supply is unlikely to close. Along with this, the number of failing banks is increasing as well.  In 2010, 141 banks failed, making it the worst year ever, and this list is expected to continue to grow.

 

With banks unable to loan money, small businesses will seek other ways to generate cash to operate.  THERE IS A SOLUTION.  Businesses can rely on Commercial Collections professionals to recoup lost cash flow from customers who have not paid. Although times continue to be hard professional B2B collection agencies have the tools, the staff and the expertise to put your receivables on the TOP of their bills to be paid.

 

Caine & Weiner reported that out of the businesses surveyed, 57.5% plan to place accounts for collection in order to generate cash and the sooner the better. Credit and Collection managers also plan to reduce credit lines given to clients and to initiate collection sooner in order to protect their accounts receivables and generate money as banks are unable to offer financial relief in the upcoming year.

 

The bottom line is that businesses can no longer continue to be their customer’s bank and CFO’s; Controllers and Credit Managers must be more proactive in 2011. It can be argued that revenue generation is the most critical function of a company.  However, that revenue must be converted into cash.  Cash is the lifeblood of any company.  Every dollar of a company’s receivable must be managed and collected.





International Debt Collection

19 11 2010

With the growth of a global economy, more and more companies are able to advertise and sell their products and services in other countries as well as their own.  Global economies also lead to the expansion of debt collections into foreign countries. When doing business in a different country, you need experience and knowledge of the countries government and laws, trade restrictions and requirements, and the differing currencies and credit reporting criteria.

Debt Collection Agencies collecting from or for companies outside the United States need to consider a few factors:

1. Language – Working with people from different countries often presents a language barrier.  It is important to have a translator for communication.

2. Time Zones – Working across time zones presents communication challenges and time constraints regarding when you can talk with someone in the opposite time zone.

3. Foreign Partner Relationships – Gaining the cooperation and a positive attitude while working with a foreign country will build a quality relationship between the client, collection agency, and debtor.

4. Laws – It is important for a debt collection agency to understand their country’s laws and the other country’s laws and policies regarding credit, collection, and the court systems.

At Butler Robbins & White Global Revenue Recovery, we are able to collect foreign debt with our unique research.  We may be able to transfer a judgment to a foreign country. We are sensitive to the different cultures we work with and offer an extended arm, so companies are able to interconnect with the United States.

Let us help you! Email us today at RKluge@brwcollect.com