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:
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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
-
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)
Email: rhiggs@apexbahamas.com
