Alliance Collection Service

Alliance Collection Service, Inc. was recently named as one of the Best Places to Work in Collections. This program was created by insideARM.com and Best Companies Group. This survey and award program was designed to identify,recognize and honor the best places of employment in the collections industry, benefiting the nation's economy, its workforce and businesses.  

For the second year in a row, ACS has been recognized as a leader in the collection industry.

This year, the Best Places to Work in Collections list is made up of 31 companies divided into three size categories:

Small (15-74 employees), Medium (75-249 employees) and Large
(250+ employees).

To be considered for participation, companies had to fulfill the
following eligibility requirements:

- Be a for-profit or not-for-profit business;
- Be a publicly or privately held business;
- Have a facility in the United States;
- Have at least 15 employees in the United States;
- Must be in business a minimum of 1 year;
- Must be a Collection Agency, Collection Law Firm or Debt Buyer.

Companies from across the U.S. entered the two-part survey process to determine the Best Places to Work in Collections. The first part consisted of evaluating each nominated company's workplace policies, practices, philosophy, systems and demographics. The second part consisted of an employee survey
to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.  For more information on the Best Places to Work in Collections
program, visit http://www.insidearm.com/features

ACSI to launch new website

Alliance Collection Service, Inc. is in the process of revamping our website at www.alliancecollectionservice.com.  The site will be upgraded with a new look and lots of new content but will be simpler to use and easier to navigate.

Stay tuned!  We hope to go live sometime around the end of August 2012!

Inside ARM Article Worth Reading

Collection Agency Layoffs Reach Highest Level of Downturn in Q2

August 17, 2009

Collection agencies and debt buyers reported layoffs at a record pace in the second quarter, according to the results from insideARM's latest Credit & Debt Collection Industry Confidence Survey. But collection performance is improving from late last year.

by Patrick Lunsford
insideARM staff
August 17, 2009

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Accounts receivable management companies reported a record level of layoffs in the second quarter of 2009, according to the latest insideARM Credit & Debt Collection Industry Confidence Survey.

The Summer 2009 survey showed more collection agencies and debt buyers reporting layoffs since the beginning of the survey in mid-2008.

When asked, “Did you eliminate any positions or layoff workers in your company in the 2nd Quarter of 2009?” more than 32 percent of collection agencies answered yes and 41.4 percent of debt buyers said the same, a record high for any group taking the survey.

The previous Confidence Survey, 25.7 percent of collection agencies reported layoffs in the first quarter with 33.3 percent of debt buyers cutting positions.

In and open response follow-up question, many survey participants gave their rationale for the increased layoffs:

"60% of our expenses are people. Only place to significantly cut costs."

"Only employees that share the desire to show up on time and produce consistently at a profitable level should expect to remain employed."

"Leveraging technology instead of hiring more staff to cover the inflated business. Although business is up it is uncollectable currently."

"We down sized to align with our revenue flow. We do anticipate improvements in the 1st and 2nd quarter of 2010 and will staff up to accommodate growth."

The Summer 2009 confidence survey was taken by 401 ARM industry professionals from July 17 through August 6. The full results, with all data and comments from the survey, can be found at http://www.insidearm.com/go/survey-results. Results from past surveys can also be found in the new section.

ARM companies did report better levels of performance in the second quarter. Although performance ratings were lower than in the first quarter, they significantly outpaced the performance reported in the fourth quarter of 2008, when the economy was seemingly in freefall and panic was the order of the day.

On a scale of 1 to 5, with 5 being the best performance, collection agencies rated second quarter performance with an average of 3.08, down from the 3.35 reported for the first quarter, but up from the 2.81 reported in the fourth quarter of 2008. Debt buyers gave second quarter performance an average rating of 3.03.

First quarter collection and liquidation performance was likely helped by early tax returns in late February and March, a typically good time for recoveries.

To view the complete results of the survey, including responses from creditors, collection law firms and vendors to the ARM industry, please visit http://www.insidearm.com/go/survey-results.

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NOTE: Even with national numbers continuing to look bleak for agencies, Alliance Collection Service remains strong and continues to break records almost monthly. We have had no lay offs and do not foresee any at this time. Maybe the hard work that Mr. Chambers and Ms. McLemore did in the fall of 2008 had everything to do with this. The question now is, how are these other agencies going to make up for their losses because laying off employees is usually a bandaid where a large bandage is needed. Most will likely revert to old collection tactics to increase collections and as a result, put their clients at great risk. We continue to receive reports, as lately as this morning, of horrific tactics being utilized by agencies nationwide.

Red Flag 101

For those of you that might not be knowledgeable about "Red Flag", the Red Flag rules are our government's latest response to the identity theft crisis.

According to the rules, any company that extends credit in any fashion, must comply by implementing a complete program by August 1, 2009. What does this mean for the consumer? Well, hopefully it will mean that you can worry a little less about having your identity stolen; however, the ultimate responsibility rests with you. Under the rules the covered entities must put into place a program that can do three things:

1. Identify potential identity theft threats
2. Respond to those threats through an established set of guidelines and policies
3. Report the threats to the appropriate authorities.

Each covered entity must have a program in place that is approved by their board of directors and must appoint a "Red Flag Officer".

The Federal Trade Commission is the governing authority over the program. Each violation by a covered entity will be worth a penalty of $2500 as the rules stand right now.

Please feel free to post any questions or comments here and I will do my best to respond quickly and accurately.

FTC EXTENDS RED FLAG DEADLINE TO AUGUST 1, 2009

The following was released by the FTC on Thursday, 04-30-09. You can view the entire document on at www.ftc.gov. We will continue to keep you posted. KEN

For Release: 04/30/2009
FTC Will Grant Three-Month Delay of Enforcement of ‘Red Flags’ Rule Requiring Creditors and Financial Institutions to Adopt Identity Theft Prevention Programs

The Federal Trade Commission will delay enforcement of the new “Red Flags Rule” until August 1, 2009, to give creditors and financial institutions more time to develop and implement written identity theft prevention programs. For entities that have a low risk of identity theft, such as businesses that know their customers personally, the Commission will soon release a template to help them comply with the law. Today’s announcement does not affect other federal agencies’ enforcement of the original November 1, 2008 compliance deadline for institutions subject to their oversight.

“Given the ongoing debate about whether Congress wrote this provision too broadly, delaying enforcement of the Red Flags Rule will allow industries and associations to share guidance with their members, provide low-risk entities an opportunity to use the template in developing their programs, and give Congress time to consider the issue further,” FTC Chairman Jon Leibowitz said.

The Fair and Accurate Credit Transactions Act of 2003 (FACTA) directed financial regulatory agencies, including the FTC, to promulgate rules requiring “creditors” and “financial institutions” with covered accounts to implement programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft. FACTA’s definition of “creditor” applies to any entity that regularly extends or renews credit – or arranges for others to do so – and includes all entities that regularly permit deferred payments for goods or services. Accepting credit cards as a form of payment does not, by itself, make an entity a creditor. Some examples of creditors are finance companies; automobile dealers that provide or arrange financing; mortgage brokers; utility companies; telecommunications companies; non-profit and government entities that defer payment for goods or services; and businesses that provide services and bill later, including many lawyers, doctors, and other professionals. “Financial institutions” include entities that offer accounts that enable consumers to write checks or make payments to third parties through other means, such as other negotiable instruments or telephone transfers.

During outreach efforts last year, the FTC staff learned that some industries and
entities within the agency’s jurisdiction were uncertain about their coverage under the Red Flags Rule. During this time, FTC staff developed and published materials to help explain what types of entities are covered, and how they might develop their identity theft prevention programs. Among these materials were an alert on the Rule’s requirements, www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm, and a Web site with more resources to help covered entities design and implement identity theft prevention programs, www.ftc.gov/redflagsrule. The compliance template will be available on this Web site.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

From ACA Newslink: Consumer Delinquencies Continued Rising in Fourth Quarter of 2008

The American Collector's Association (ACA) is our trade association. News continues to point to lower recovery percentages for businesses across the nation and the Southeast. It is important that we, as your agency, help you to capture every dollar as credit tightens even more and consumers become more sensitive to abusive collection tactics. The ACA just sent us the following information:

"Job losses continued taking their toll on consumer finances during the fourth quarter of 2008, as evidenced by rising delinquencies in almost every loan category. The U.S. economy lost nearly three million jobs in 2008, with nearly two million of them occurring in the fourth quarter.

The Consumer Credit Delinquency Bulletin reported the composite ratio, which tracks eight closed-end installment loan categories, rose 32 basis points to a record 3.22 percent of all accounts. The bulletin is published by the American Bankers Association.

According to the bulletin, home equity loan delinquencies rose 40 basis points to 3.03 percent of accounts, setting a new record. Home equity lines of credit delinquencies also reached a new record, rising 31 basis points to 1.46 percent. Every category saw rising delinquencies except mobile home loans. The report defines a delinquency as a late payment 30 days or more overdue.

Credit card delinquencies also increased from 4.20 percent to 4.52 percent, but still remain near the four year average of 4.47 percent. This is likely due to the ability of card holders to adjust their monthly payments, unlike other loans with fixed payments.

The composite ratio is made up of eight closed-end installment loan categories: home equity, property improvement, indirect auto, direct auto, marine, RV, mobile home and personal. All figures are seasonally adjusted based upon the number of accounts."

Economic News Affecting Collections

According to the U.S. Bureau of Labor Statistics: Nonfarm payroll employment continued to decline sharply in March (-663,000), and the unemployment rate rose from 8.1 to 8.5 percent. Payroll employment has decreased by 3.3 million over the past 5 months. In March, job losses were large and widespread across the major industry sectors. (Source: http://www.bls.gov/ces/)

The Financial Forecast Center released the following projections through October 2009 on March 9, 2009 on unemployment:

U.S. Civilian Unemployment Rate Forecast
Percent Unemployed Seasonally Adjusted.
Month Date Forecast

0 - Feb 2009 - 8.10 - 0.0
1 - Mar 2009 - 8.5 - 0.3
2 - Apr 2009 - 8.8 - 0.4
3 - May 2009 - 9.1 - 0.4
4 - Jun 2009 - 9.4 - 0.4
5 - Jul 2009 - 9.7 - 0.5
6 - Aug 2009 - 10.0 - 0.5
7 - Sep 2009 - 10.2 - 0.5
8 - Oct 2009 - 10.3 - 0.6
Updated Monday, March 09, 2009 (Source: http://forecasts.org/unemploy.htm)

These numbers and other factors will dramatically affect the recovery percentage of collection accounts nationally. Alliance continues to see a steady recovery rate to spite the economic downturn.

The one thing the we find most interesting is that consumers are responding to positive treatment and respect. There are countless reports of collection agency abuse in the news, and numerous agencies utilizing abusive tactics are believed to be experiencing a drop in recovery.