Sunday, March 30, 2014

Value added tax (VAT) and Debt Collection


Debt Collection Expert Speaks Out Regarding VAT and Debt Collection



Rory Higgs

There has been a lot of talk throughout the Bahamas recently regarding the implementation of VAT and the collection of taxes. While for the most part the talk and views expressed are from respected individuals who are experts in their respective fields, none of the persons can claim to be experts in the field of “debt collection” in general or “debt collection in the Bahamas” in particular.

Apex Management Services has been in business for over 15 years and is the only debt collection agency in the Bahamas that is capable of handling the full spectrum of debt collection with state of the art technology and resources that are all under one roof.

While there are several debt collection options that include; In-house Collectors, Internal or External Attorneys, Internal Call Centers, External Call Centers and Offshore Call Centers, none of the options are as efficient and effective as a Local Full-Fledged Debt Collection Agency, which can handle matters from start to finish without gaps. 

Some of the inherent flaws that are associated with the various collection options that often substitute for Debt Collection Agencies are as follows:

Internal Attorneys at best would function similar to an external attorney with the difference being that they would be more accessible. At worst an Internal Attorney would also have a focus on other duties, which would diminish the attorney’s role as a specialist with 100% focus on debt collection. Although Day Court is an option, as a matter of convenience, many civil matters, which fall in the Magistrate Courts jurisdiction, are heard in evening court, which would often necessitate odd hour for an internal attorney.

External Attorneys do not operate debt collection agencies; in many instances their main focus is to obtain judgment with little if any interaction with the debtor. Prior to obtaining judgment and after judgment is obtained; attorneys do not have the capacity to provide the care and attention to each and every individual account. In most cases attorneys will bill the client after judgment is obtained and the client is still left to collect the amount of the claim.  Many matters handed to attorneys go uncollected long after the attorneys have been paid.

Onshore Call Centers are on the opposite end of the spectrum from Attorneys, in the debt collection process. While Onshore Call centers are extremely good at interacting with debtors, they have no enforcement capabilities. If a call center operator is dealing with a debtor who is not cooperating or refuses to pay, the call center has no recourse but to send the debt back to the client who will most likely send it to an attorney thus creating a time and process gap, when time is of the essence.

Furthermore Call Centers have no capabilities to locate debtors whose whereabouts are unknown (Skip Trace) even though a large percentage of bad debt matters require Skip Tracing. At best, Call Centers are only suitable for early stage debt not late stage debt.

Offshore Call Centers have the same disadvantages as Onshore Call Centers plus the following added disadvantages.

Communication and Culture - In most cases Offshore Call Centers operate in countries where there are cultural differences that are often subtle but significant. This is compounded when English is not the native language or where patois is predominant.

Geography – Psychologically if a debtor senses that there is some significant distance between the call center operator and themselves they are less likely to cooperate or pay.

Speaking from experience gained working with a major commercial bank that implemented an offshore call center option that failed miserably, Offshore call centers or Offshore Collection Agencies do not work.

The differences that a properly equipped and professional Debt Collection Agency such as Apex makes to the collection process that none of the above options can provide are as follows:

  •          Principal has over 30 years of Credit and Collection Experience.
  •          Principal is an accomplished Fellow and Member of the largest International Debt Collection Trade Association. ACA International, the Association of Credit and Collection Professionals.
  •          Agency has been in operation for over 15 years
  •          Easily accessible well-maintained and spacious offices conducive for customer service.
  •          Adequate telecommunication technology and operators to handle thousands of calls daily.
  •         Auto-dialers, which exponentially increase the calling and communication capacity of the call center.
  •         SMS technology which exponentially increases the communication capacity of the call center.
  •          State of the art Collection Management Software capable of handling unlimited number of accounts with integrated financial accounting, diary management and many additional features.
  •          State of the art Legal Case Management Software
  •          24/7 client web access
  •          Skip Tracing Database and Skip Trace Network
  •          In House Attorneys that are 100% dedicated to debt-collection-litigation.

“International financial institutions, such as the World Bank and International Monetary Fund (IMF), have propagated a conventional wisdom that revenue collection authorities are more effective when they operate autonomously from the state, as a commercialized entity at arms length from government rather than as a department within the government administration”.  (Source: Preconditions for Effective Tax Collection, By – Economic Policy Research Unit, Bergen Norway)

A growing number of U.S. states are expanding their relationships with private collection agencies to settle long-overdue taxes.

Her Majesty Revenue & Collection (HMRC) has outsourced some of its debt collection to external agents. Following a pilot, a notice entitled ‘Modernizing debt collection’ was released explaining that four debt collection agencies will be employed by HMRC to collect an outstanding £140 million of outstanding tax debt. (Source: HMRC sends in debt collectors for unpaid taxes. By-Nick Lodge, Director of debt management and banking HMRC.)

In Spain alone more than 800 companies specialize in collection of outstanding debt, handling a total of 71 billion euro and generating close to 560 million euro for their business. (Source: DBK, “Empresas de Gestion de Impagados)

With an obvious eye on an opportunity to capitalize on the existing situation, a number of over-night debt collection vendors are beginning to surface without any experience or capacity to perform at a level that would be required.

It would be a shame if we as a country succumb to the temptation to award debt collection contracts based on patronage rather than on merit, at such a time when our country’s financial wellbeing is at stake.

March 28, 2014

Media Contact: Rory Higgs  
Phone: 424-0985 (Cell)

Bahamian Shanendon E. Cartwright ...encourages all Bahamians to actively participate in the continuous positive advancement and further greatness of our beloved Commonwealth of The Bahamas

Want real change in The Bahamas? It’s time for active citizenship

Shanendon Eugene Cartwright
On July 10, 2013, the Commonwealth of The Bahamas celebrated 40 years of independence.

The annual recognition of self-determination inherently gave way to a national reflection on self-evaluation and an assessment of how far we have come as a nation and what is the way forward for the next 40 years.

An objective, fair and realistic evaluation would render a judgment incredibly favorable to the Commonwealth of The Bahamas. As the adage goes, “To whom much is given, much is expected.”

We, the Bahamian people, have been given a great country by our God, our forefathers and Bahamians of generations past. The expectation now even more than ever is for every Bahamian citizen, every one of us, to make individual contributions to the continuous advancement and further greatness of our beloved commonwealth.

As we embark upon the next 40 years, all of us must embrace an active citizenship, one that asks: “How does my attitude, my lifestyle and my behavior either contribute to the increasing development or gradual weakening of the Commonwealth of The Bahamas?”

An active citizenship that says to be born Bahamian is not a right, but a privilege, a privilege that must be honored by an equal and unshakeable resolve to “do my part” to make The Bahamas better.

Occasionally lost sometimes in the usual rhetorical scuffle and paralysis of analysis that at times handicaps the national dialogue on pertinent issues is a fundamental and undeniable fact that history has been a witness to time and time again. When real change and transformation altered the Bahamian national landscape in the Commonwealth of The Bahamas, it was an active citizenship that served as a catalyst.

From the Burma Road Riot in 1942, to the taxi cab blockade in 1958, to the historic vote of Bahamian women in 1962, to Bahamian independence in 1973, to the formation of both the Free National Movement and the Progressive Liberal Party, these historic events have been shaped by ordinary Bahamian men and women with extraordinary passion, resolve and selfless love of country.

Admirably, we have become a very vocal and critically thinking citizenry, but the ongoing sense of entitlement, over-reliance and excessive dependency on government have in many ways reduced the incentive for some Bahamians to be involved in their own development.

There must be a collective commitment to change the status quo and create a country for active citizenship to flourish. We must foster a culture that rejects the idea that political access to the Public Treasury is either the only way or the primary way for economic empowerment to occur. Governments ought to not simply act on behalf of the Bahamian people. They should act with them and create an environment ripe for economic independence and empowerment.

So while I do concede that social services agencies and programs are necessary to act as a collective safety net for our brothers and sisters who are ill-equipped and less fortunate, they cannot be embraced as a sustainable method through which we empower. We the citizens must be engaged sufficiently that we ensure that political, business, civic and religious leaders are accountable for their actions as we have to be accountable for ours. We must work with other community stakeholders to forward development, provide serious long-term solutions for our social, economic and educational ills.

Each of us should champion the concerns for those who have no voice and those whose influence is limited by virtue of education or economics. An active citizenship and social agitation is the bedrock of any mature democracy and it must be dynamic, visible and vibrant. Let me submit this, that our desires for our country are directly connected to what we are willing to give it individually. Now let me register this admission for the record. There are thousands of great Bahamians who helped to build this country and there are countless others who make their contribution to their community and this nation everyday. Yet, there still remains a sizeable portion of the population who sit on the sidelines; people who spectate not participate. Simply put “the work is plentiful in our country and the laborers are few”.


We must embrace the notion that each of our roles is significantly important to the transformation of our country. Whether you are the right honorable prime minister or a painter, an engineer or an evangelist, a taxi driver or a janitor. We must all lead from where we stand and alter our surroundings for the good of The Bahamas. It is my belief that we must weave into our social fabric a sense of a “through the corner”, “in the yard”, “everyday” patriotism. An ever-present patriotism that will stir the soul of the Bahamian people daily and incite a level of pro-activeness and a relentless focus on nation building. I’m reminded daily of the impact of this when I talk to and observe a remarkable lady on the corner of Meadows and West Streets affectionately known as “Mother Blessed” as she cares for and transforms the lives of young children in the Bain Town community. I’m reminded of this when I drive on Baillou Hill Road and see Troy Clarke of the L.E.A.D institute as he inspires the young men in his program. I am reminded of this when I think of Tyrone ‘Goose’ Curry of the Foundation Junkanoo group, who works tirelessly to uplift the spirits of the young men and women in the Chippingham area.

There is, however, a stark and festering reality that has been with us for decades that seems to evade our consciousness and that is there is no amount of legislated public policy that can stem the instances of chronic lawlessness, social deterioration and corruption that we are now facing. To begin to usher in the change needed it will involve an active citizenship and an engaged, aggressive, demanding Bahamian citizenry whose members work tirelessly within their circles of influence to begin to eliminate and battle those elements of our society that weaken us as a country.

We have much to be proud of as a country and are truly blessed for having been given the Commonwealth of The Bahamas by our creator. We are therefore both citizens and caretakers. Let us remind ourselves daily that citizenship is not simply a status of national residence. It is an unwritten, sacred, solemn and binding pact between us and our country. We are exposed to unlimited privileges of being Bahamian; the absolute advantages of our climate; our geography, our seas. We benefit from a sometimes, yes, challenged but underestimated thriving democracy and a stable economy. We are in the elite and enviable position of being one of six countries in the world that have United States pre-clearance. We enjoy the relatively peaceful and tranquil experience that is the Bahamian way of life. All that is asked of us is to do our part and make individual and collective contributions to our Bahamaland that has given us so much. We reap the harvest from our land but in my humble view too many are unwilling to till the soil for the next generation just as the land was prepared for them.

There is no more room for idle hands or the absentee citizen. For the very same community and society we neglect today are the same ones we will become victims of tomorrow. We must awaken those patriotic passions and cultural ideals that were so prevalent during the pre-independence years and those immediately after. There must be a huge shift in how we view our citizenship. Let us harness that unique Bahamian spirit of excellence that has given us world-class leaders, scholars, actors, painters, song writers, musicians and athletes and become consumed by what will make us individually better neighbors, ideally better Bahamian citizens, because the future of the Commonwealth of The Bahamas depends on it.

• Shanendon E. Cartwright is the founder and facilitator of Vision 21 – an educational, motivational and interactive lecture series on leadership.

March 28, 2014