Debt Collection: Profession... or aggression?

1. DEBT COLLECTION:
Profession…
or Aggression?
Ross Chapman, FCA
DebtorCorp Collections
Prompt, Professional, Receivables Solutions

2. So What Are We?
OR

3. Tackling the Post-GFC Financial Crisis
• Stress for owners, staff, creditors, debtors
• Pressure on cash inflows & outflows
• Household debt as percentage
of disposable income ‟ 150%
• 1992 ‟ 50%
• Truth v Lies
• Iron Fist‟Velvet Glove ::
Loudspeaker‟Sledgehammer

4. Industry & Professional Standards
• Debt collection guideline for
collectors and creditors:
joint publication by ACCC
and ASIC
• Department of Fair
Trading - Privacy Acts ‟
Self Regulation
• The Institute of
Mercantile Agents

5. Industry & Professional Standards (cont’d)
• Australian Institute of Credit Management
• Financial Ombudsman
Service
• Credit Ombudsman
Service
• Energy & Water
Ombudsman
• Telecommunications
Industry Ombudsman

7. Pay, or I’ll rip your bloody arms off!!

8. So What are People Saying
and What is Reality?
• Threats of legal action ‟ deliberate
misinformation & phone harassment
• Continuous phone calls inside and outside
of allowable calling times
• Bullying, coercion, manipulation, pressure
• Enquiring about bonafide long outstanding deb
which is detrimentally impacting creditor’s
cashflow and business including staff retentio

9. • Attempting to work with debtor
to arrange mutually beneficial
payment arrangement
• Calmly responding to abusive
barrages from debtor
• Dealing with false claims of
harassment, breaching of
ACCC / ASIC guidelines,
denial of signed documents
proving debts due ‟ by serial non-payers

11. Telecommunications Ombudsman

12. • Creditors have better memories than
debtors ‟ Benjamin Franklin
• Abuse reports to FTC † >144,000†
more than any other industry
• FTC v West Asset Management
$US 2.8M fine
• Persuing widows
• “We know where you live,
we know who your wife is. “

14. Could it be the Lure or the Lack of the
Almighty Dollar $$$ !!!
• “When I was young I thought that money was the most
important thing in life; now that I am old I know that
-Oscar Wilde
• “The hardest thing is to take less when you can get mo
-Kin Hubbard
• Client and collection firms’ internal staff
performance measurement policies
• Remuneration policies
• Pay peanuts†get monkeys

15. Where are we in the World of Debt Stress?
AVERAGE NATIONAL TRADE PAYMENT DAYS
Q2 2009 ‟ Q2 2012 (Dun & Bradstreet)

16. Australian insolvency statistics
Released: 3 July 2012
Table 1.1 - Companies entering EXAD–Region summary, ANNUAL, QUARTERLY
Australian
New South South Western Northern Capital
Period Wales Victoria Queensland Australia Australia Tasm ania Territory Territory Australia
ANNUAL (2008–2011)
2007-2008 3,820 2,134 1,196 286 291 42 17 121 7,907
2008-2009 4,487 2,616 1,806 338 543 43 24 148 10,005
2009-2010 3,935 2,327 1,894 312 580 81 24 128 9,281
2010-2011 4,072 2,603 1,894 352 681 79 33 115 9,829
2011-31Mar 3,325 2,020 1,764 342 547 72 24 111 8,205
Based on quarterly trends for 2011 - 2012 anticipate June 2012 quarter EXAD's at 2,000+
© Australian Securities & Investments Commission

17. The Answer…

18. Did you really doubt
it would be anything else…
Prompt, Professional Receivables
Solutions
1300 433 2826 „ debtorcorp.com.au
MELBOURNE „ SYDNEY „ BRISBANE
SUNSHINE COAST „ AUCKLAND, NZ