Waldberg&Hirsch Global Collections Ltd. debt management, fraud investigation, risk analysis, credit report, business & company information, market analysis, financial information, background investigations, financial investigation, background checks,  risk management &  business intelligence
Collection House Limited : Collection House successfully raises $13 million and announces SPP
August 28, 2013

PRESS RELEASE: Cushman & Wakefield Selected to Lease Prominent Orange County Office Portfolio
August 27, 2013

Missouri Attorney General Accuses Walgreens Of Overcharging
August 27, 2013

Trump University Made False Claims, Lawsuit Says
August 24, 2013

Federal Court Allows Consumers to Curb Robo-Calls from Debt Collectors
August 23, 2013

Veteran dismisses his abusive practices suit against debt collector
August 13, 2013

Boom time for Spanish debt collectors
August 9, 2013

Consumer credit industry criticizes Ohio, Pennsylvania legislation on debt settlement
June 27, 2013

Credit & Collection Forum 2013 took place on June 6'th, at the JW Marriott Bucharest Grand Hotel in Bucharest
June 10, 2013

Subscribe to our mailing list to receive regular announcements.


Collection House Limited : Collection House successfully raises $13 million and announces SPP
28 August 2013

Collection House successfully raises $13 million and announces SPP

Key Points

  • Successful placement completed raising $13 million at $1.65 per share
  • Share Purchase Plan (SPP) to raise up to a further $6 million at $1.65 per share
  • Funds raised under the Placement and SPP will be used to strengthen the balance sheet and fund the acquisition of debt ledgers
  • SPP opens on 5 September 2013 and closes on 19 September 2013
  • The SPP is underwritten up to $5 million

Capital Raising

The Directors of Collection House Limited (Company) are pleased to announce that the Company:

(a) has successfully completed a private placement to institutional and sophisticated investors at $1.65 per share to raise $13 million (Placement); and

(b) will undertake a share purchase plan (SPP) to raise up to an additional $6 million and to give eligible shareholders the opportunity to subscribe for shares at the same issue price of $1.65 per share.

Placement Oversubscribed

The Placement was strongly supported by both existing and new institutional investors.

The issue price under the Placement was priced at a 6% discount to the volume weighted average of the closing price over the 5 trading days ending 23 August 2013 of $1.75. The issue price for the SPP will be also attractively priced at $1.65 per share.

Funds raised from the Placement and SPP (in conjunction with the Company's debt facilities and existing cash) will be used, to strengthen the balance sheet of the Company and to take advantage of future investment opportunities, including the acquisition of debt ledgers.

In connection with the capital raising, Collection House Chairman, David Liddy said: "The Company appreciated the support of our existing major institutional shareholders and was delighted to welcome a number of new investors and institutions to the Company Share Register. The high level of interest in our business shows that institutional funds see the potential value of the Company's strong revenue from its Purchased Debt Ledger (PDL) pipeline and other business segments.

"The Company has delivered consistent results and improved performance across all key metrics including Earnings and Dividends per Share, Return on Shareholders' Equity and reduced gearing in FY13."

Managing Director and CEO, Matthew Thomas said: "This capital raising will enable the Company to maintain its lower gearing levels achieved in FY13 whilst also expanding its PDL acquisition program at a time where we are successfully identifying several attractive opportunities in the market through our extensive relationships with banks and other credit providers."

The Placement and SPP are jointly managed and underwritten by RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Ltd.

The issue of shares under the Placement is expected to occur on 3 September 2013.

Details of Share Purchase Plan

The issue price under the SPP will be the same as under the Placement ($1.65) and, funds raised through the Placement and SPP, in conjunction with the Company's debt facilities and existing cash, will be used to strengthen the balance sheet of the Company and to take advantage of future investment opportunities, including the acquisition of debt ledgers.

The SPP is underwritten by RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Ltd up to $5 million, and will be capped at $6 million.

The SPP will be open to all eligible shareholders of the Company who have a registered address in Australia or New Zealand as at 7.00pm Brisbane time on Tuesday 27 August 2013, being the Record Date. Shareholders, at their discretion, will be able to purchase up to a maximum of $15,000 worth of fully-paid ordinary shares in lots of either $1,000, $2,500, $5,000, $10,000 or $15,000. If the SPP is oversubscribed, the Board reserves the right to scale back applications at its discretion.

The proposed timetable for completion of the SPP is as follows:

Event Date
Record Date of the SPP (7.00pm Brisbane time) 27 August 2013
Opening Date of the SPP 5 September 2013
Closing Date of the SPP 19 September 2013
Issue and Allotment of new shares under the SPP 1 October 2013
Quotation of new shares under the SPP 1 October 2013

The above timetable is indicative only and the Company reserves the right to vary any of the key dates above, including the Closing Date and the Issue Date, without further notice.

The SPP is non-renounceable, therefore the right to purchase shares under the SPP cannot be transferred to another party.

The full terms of the SPP, including the application form and instructions for making an application under the SPP, will be despatched to shareholders on 5 September 2013. Eligible shareholders who are qualified custodians and want to participate on behalf of any beneficiaries will be able to obtain a custodian certification form upon request to the Company's share registry.

More details relating to the Placement and the SPP are contained in the attached Overview document.

About Collection House

Collection House Limited is Australia's leading receivables manager. With almost 700 staff, our core business is providing receivables management, debt collection, debt ledger purchasing and legal services to support collection activities. We are listed on the Australian Securities Exchange and operate throughout Australia and New Zealand.

For more information please contact:

Matthew Thomas Managing Director and Chief Executive Officer Ph: 07 3100 1245


This section of the presentation relates to the proposed conduct by Collection House Limited (CLH) of: (a) a placement to be undertaken under section 708 of the Corporations Act 2001(Cth) (Corporations Act); and
(b) a share purchase plan to be undertaken under ASIC Class Order [CO 09/425], (together the Offer), in relation to the issue of new shares in CLH (New Shares).


Summary only

The information contained in this presentation is of a general nature only and does not purport to contain all the information that a prospective investor may require in evaluating a possible investment in CLH or which would be required in a disclosure document prepared in accordance with the requirements of the Corporations Act. This presentation should not be used in isolation as a basis to accept the Offer or otherwise invest in CLH.
Statements in this presentation are made only as of the date of this presentation unless otherwise stated and the information in this presentation remains subject to change without notice. Reliance should not be placed on information or opinions contained in this presentation.

Not investment, legal or other advice

Nothing contained in this presentation constitutes investment, legal, tax or other advice.
Recipients of this presentation must make their own independent investigations, consideration and evaluation of CLH and the Offer. CLH recommends that potential investors consult their professional advisor/s as an investment in CLH is considered to be speculative in nature.
None of RBS Morgans Corporate Limited or Wilson HTM Corporate Finance Limited nor any of their respective affiliates, related bodies corporate (as that term is defined in the Corporations Act), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisors (together the Joint Lead Manager Parties) make any recommendation as to whether an investor should participate in the Offer nor do they make any representation or warranties, express or implied, concerning this Offer or any information contained in the presentation.

Not an offer

This presentation is not a prospectus, disclosure document or offering document under Australian law or under any other law. It is for informational purposes only. This presentation does not constitute, and should not be construed as, an offer to issue or sell or a solicitation of an offer or invitation to subscribe for the New Shares or to otherwise buy or sell securities in CLH.

Applications for New Shares can only be made using an application form and in accordance with the instructions contained either:

(a) a placement document to be prepared and issued to eligible investors; or
(b) the share purchase plan document which will be distributed to eligible shareholders of CLH following its lodgement with ASX.

The placement will only be available to sophisticated, experienced or professional investors who qualify under section 708 of the Corporations Act.

The share purchase plan will only be available to shareholders of CLH as at the relevant record date who have a registered address in Australia or New Zealand.

No representation or liability

None of RBS Morgans Corporate Limited or Wilson HTM Corporate Finance Limited nor any of their respective affiliates, related bodies corporate (as that term is defined in the Corporations Act), nor their respective directors, employees, officers, representatives, agents, partners, consultants and advisors (together the Joint Lead Manager Parties) have authorised or caused the issue or dispatch of this presentation and none of them, except to the extent specified in the presentation, makes or purports to make any statement contained in the presentation and there is no statement in this presentation which is based on a statement from them.

To the maximum extent permitted by law, neither CLH nor any of their affiliates, related bodies corporate and their respective officers, directors, employees, advisors and agents (Relevant Parties), nor the Joint Lead Manager Parties, accept any liability as to or in relation to the accuracy or completeness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or any omission from this presentation or of any other written or oral information or opinions provided now or in the future to any person.

To the maximum extent permitted by law, CLH, the Relevant Parties and the Joint Lead Manager Parties disclaim any responsibility to inform any recipient of this presentation on any matter that subsequently comes to their notice which may affect any of the information contained in this document and presentation and undertake no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.

No representation or warranty, express or implied is made, in relation to the accuracy or completeness of the information provided in this presentation or any other information concerning CLH otherwise provided to the recipients. No responsibility is accepted by CLH, the Relevant Parties and the Joint Lead Manager Parties for any information provided in this presentation or otherwise provided to the recipients or for any action taken by the recipients on the basis of such information.

Forward Looking Statements

This presentation contains certain "forward-looking statements". The words "expect", "should", "could", "may", "predict", "outlook", "guidance", "plan" and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors and are subject to significant business, economic and competitive uncertainties and contingencies associated with exploration and/or production, many of which are beyond the control of CLH, the Relevant Parties and the Joint Lead Manager Parties, that may cause actual results to differ materially from those predicted or implied by any forward-looking statements. CLH makes no representations as to the accuracy or completeness of any such statement or projections or that any projections will be achieved and there can be no assurance that any projections are attainable or will be realized or that actual outcomes will not differ materially from any forward-looking statements. The Joint Lead Manager Parties have not authorised, approved or verified any forward-looking statements.


This presentation does not constitute an offer of New Shares in CLH in any jurisdiction in which it would be unlawful.

New Shares offered under the placement may not be sold or offered in any country outside of Australia. New Shares offered under the share purchase plan will only be available to shareholders of CLH as at the relevant record date who have a registered address in Australia or New Zealand.

This Presentation does not constitute an offer to sell, or a solicitation to buy, any securities in the United States. New Shares in CLH have not been, nor will be, registered under the U.S. Securities Act of 1933 (U.S. Securities Act) or the securities laws of any state or other jurisdiction of the United States. Accordingly, New Shares in CLH may not be offered or sold, directly or indirectly, in the United States, unless they have been registered under the U.S. Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the regulation requirements of the U.S. Securities Act and any other applicable securities laws. This Presentation may not be released or distributed in the United States.


Offer size and structure

Capital raising of up to approximately $19m by way of:

- Fully underwritten Placement of approximately 7,878,000 new ordinary shares to be issued to Institutional and Sophisticated Investors to raise approximately $13m

- Share Purchase Plan (SPP), underwritten to $5m, will be capped at $6m (approximately 3,636,000 shares) which will provide eligible shareholders as at the Record Date with the opportunity to purchase up to $15,000 worth of new ordinary shares Capital raising shares will be entitled to the FY13 full year dividend of 3.6 cents per share

Offer Price The Offer price for the Placement and SPP of $1.65 per new ordinary share which represents:

- 6% discount to the 5 day VWAP of $1.75

Use of Proceeds Syndicate Structure

Funds raised from the Placement and SPP (in conjunction with the Company's debt facilities and existing cash) will be used to strengthen the balance sheet and to take advantage of future investment opportunities, including the acquisition of select debt ledgers/portfolios, as they arise, to improve shareholder value

RBS Morgans Corporate Limited and Wilson HTM Corporate Finance Limited are Joint Lead

Managers and Underwriters to the Placement and SPP


Macroeconomic Environment

Changes in macroeconomic factors such as an increase in interest rates and cost of living may impact debt recoverability levels.

Regulatory environment and adverse publicity Reliance on key personnel and staff

Loss of key clients Ability to accurately determine the price of debt ledgers

Collection House must ensure that there are no material breaches of the relevant existing legislation in relation to its debt collection practices (eg Competition and Consumer Act, Privacy Act etc). If a material breach occurs, it could have an adverse effect on the reputation of the Company and the ability to retain existing business and attract new business.

The success of companies in the collection industry is heavily dependent on their ability to hire and train collection personnel. Collection House needs to retain its existing trained workforce and attract new personnel as it grows. While the Company has initiatives in place to mitigate the risk of its key staff leaving, the loss of such staff may have a negative impact on Collection House.

Meeting the needs of clients is critical and a loss of key clients or margin pressure may have a negative impact on Collection House. The Australian market for Purchased Debt Ledgers (PDLs) is limited and is heavily weighted toward the four major Australian banks. The Company ensures it minimises the risks of loss of a key client by, in general, no one client representing a significant proportion of the Company's revenue and a comprehensive process of pro-active and superior professional service to clients to meet their needs.

The price paid for a debt is critical to being able to make a profit on any debt purchase and Collection House has invested significant resources in being able to accurately price debts prior to submitting a bid to purchase and has the appropriate highly skilled and trained personnel to make the accurate assessments of the correct price to be paid for debts.

Ability to value an existing purchased debt portfolio Reduced returns on PDLs

Collection House must have the information systems and employee skills (which enables the Company to accurately price debts) to manage the purchased debt portfolio on an ongoing basis and take appropriate action (eg sell, trade portfolios), if required.

Lower than forecast returns from PDLs could result in lower than anticipated profits and write downs in the value of Collection House's debt ledgers.

Ongoing access to capital

Collection House requires continuing access to debt and equity capital to achieve sustainable growth. A downturn in equity markets or a restriction on debt capital availability could restrict the Company's ability to access the capital required to continue its growth.

Competition Increased competition from both domestic and international competitors could impact Collection House's ability to purchase PDLs in the future. General risks An investment in Collection House is also subject to general risks including those related to the share market (such as volatility and liquidity risks), general economic conditions, accounting standards, taxation, Government actions and relevant legislation.


PRESS RELEASE: Cushman & Wakefield Selected to Lease Prominent Orange County Office Portfolio
August 27, 2013

ORANGE COUNTY, CA - Cushman & Wakefield, the world's largest privately‐held commercial real estate services firm, today announced it has been appointed exclusive leasing agent for Plaza Tower, Center Tower and Park Tower, a portfolio of iconic office buildings in the world renowned South Coast Plaza complex. Rick Kaplan, Robert Lambert and Matt Moore of Cushman & Wakefield will market the properties and represent the landlord in lease negotiations.

"We are honored to be selected for this project by one of the most respected real estate investment and philanthropic families in the country," said Joe Vargas, Cushman & Wakefield's West Region President. "Our global platform, strength of brand and solid foundation are perfectly aligned with the strategies necessary to fulfill this assignment."

The prominent trio of properties includes Plaza Tower, a 460,852-square foot office building designed by renowned architect Cesar Pelli; Center Tower, a 462,191-square foot office building that features 21-stories of Swedish Napoleon red granite and houses The Center Club, a prestigious dining and meeting facility; and Park Tower, a 17-story 338,070-square foot office building, that was renovated in 2000 by renowned architect Helmut Jahn and offers immediate access to the world renowned South Coast Plaza via the Unity Pedestrian Bridge. Each building is LEED Gold Certified and has a high Energy Star rating.

"The office properties within the complex are an impressive collection, with some of the most prestigious professional firms and tenants in the market," said Mr. Kaplan, a Vice Chairman in Cushman & Wakefield's Orange County office. "We look forward to the opportunity to build on that tenant base."

The properties are owned by affiliates of the Segerstrom family, which has been an integral part of Orange County since moving there more than 100 years ago. The family's holdings exceed 6 million square feet of retail, office, industrial, entertainment and residential properties, including South Coast Plaza, one of the highest grossing shopping malls in the country. The family has also been involved in multiple philanthropic ventures, including the donation of funds to build Sergestrom Center for the Arts, located in the complex, as well as nearby Sergestrom High School.


Missouri Attorney General Accuses Walgreens Of Overcharging
August 27, 2013

ST. LOUIS -- Missouri Attorney General Chris Koster filed a lawsuit Tuesday against Walgreen Co., accusing the nation's largest pharmacy chain of overcharging customers and using deceptive display advertising and pricing schemes.

Koster filed the suit in Kansas City and announced details at a news conference in St. Louis. The suit seeks an injunction forcing the Chicago-based chain to stop the allegedly deceptive practices. It also seeks unspecified fines and damages.

"My concern is this is not sloppiness - this is a business practice that is consciously intending to steal from sick people that go into Walgreens, from old people that go into Walgreens," Koster said.

Walgreen spokesman Jim Graham said the company has not seen the lawsuit and declined comment.

The company settled pricing practice lawsuits with California and Wisconsin earlier this year.

The Missouri investigation began after many consumers complained that display tag prices didn't match up with what they paid at checkout, Koster said. His office sent undercover investigators to eight Walgreen stores in five Missouri cities - St. Louis, Kansas City, Springfield, Jefferson City and Osage Beach - in June and July.

What they found, Koster said, "was appalling."

Koster cited several ways in which consumers were overcharged: outdated price displays for sale items; confusion created by multiple prices displayed for the same item; displays offering discounts for rewards members, but with no discount given; and full prices charged for items in clearance bins.

Of 205 items purchased by investigators, 43 had price discrepancies ranging from a few cents up to $15, Koster said.

He cited examples: A container of Muscle Milk was supposed to be $6.99 with a rewards card, which the investigator had, but was charged $8.99; a package of Lipton tea that normally sold for $3.79 was marked with a tag to save $1.90, but the full price was charged. And Oreo cookies marked at $3.29 each or two for $6 were charged at $4.19 per package.

In January, Walgreen agreed to pay more than $1.4 million in civil penalties and to establish a price guarantee program in California after four Bay Area counties sued over price discrepancies. And in March, the company paid nearly $30,000 to settle claims that it scanned inaccurate prices and didn't post refund notices at stores in Wisconsin.

"I expect this will not be the last state to take on Walgreens," Koster said.

Walgreen has more than 8,000 pharmacies in 50 states and Puerto Rico.


Trump University Made False Claims, Lawsuit Says
August 24, 2013

The New York State attorney general's office filed a civil lawsuit on Saturday accusing Trump University, Donald J. Trump's for-profit investment school, of engaging in illegal business practices.

In a statement, Eric T. Schneiderman, the attorney general, said Mr. Trump appeared in advertisements for the school making "false promises" to persuade more than 5,000 people around the country - including 600 New Yorkers - "to spend tens of thousands of dollars they couldn't afford for lessons they never got."

The advertisements claimed, for instance, that Mr. Trump had handpicked instructors to teach students "a systematic method for investing in real estate." But according to the lawsuit, Mr. Trump had not chosen even a single instructor at the school and had not created the curriculums for any of its courses.

"No one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers," Mr. Schneiderman said in the statement. "Anyone who does should expect to be held accountable."

The inquiry into Trump University came to light in May 2011 after dozens of people had complained to the authorities in New York, Texas, Florida and Illinois about the institution, which attracted prospective students with the promise of a free 90-minute seminar about real estate investing that, according to the lawsuit, "served as a sales pitch for a three-day seminar costing $1,495." This three-day seminar was itself "an upsell," the lawsuit said, for increasingly costly "Trump Elite" packages that included so-called personal mentorship programs at $35,000 a course.

On Saturday evening, Michael Cohen, a lawyer for Mr. Trump, denied the accusations in the lawsuit and said the school had received 11,000 evaluations, 98 percent of which rated students as "extremely satisfied."

George Sorial, another lawyer for Mr. Trump, called the lawsuit politically motivated. He said that Mr. Schneiderman had asked Mr. Trump and his family for campaign contributions and grew angry when denied.

"This is tantamount to extortion," Mr. Sorial said.

Andrew Friedman, a spokesman for the attorney general's office, said that although Mr. Schneiderman had accepted a contribution from Mr. Trump in the past, "the fact that he's still brave enough to follow the investigation wherever it may lead speaks to Mr. Schneiderman's character."


Federal Court Allows Consumers to Curb Robo-Calls from Debt Collectors
August 23, 2013 (Stephanie Levy)

he 3rd U.S. Circuit Court of Appeals in Philadelphia ruled unanimously Thursday that, under the Telephone Consumer Protection Act (TCPA), consumers may withdraw their consent to have robo-callers contact them by cell phone. The ruling directly applies to debt collectors that use automated calls to notify customers of delinquent payments. Now, if a consumer says in writing (s)he wants robo-calls to stop, collection agencies have to comply.


"Because the TCPA is a remedial statute, it should be construed to benefit consumers," Circuit Judge Jane Roth wrote for the three-judge panel. "TCPA provides consumers with the right to revoke their prior express consent to be contacted on cellular phones by autodialing systems."

The court ruled in favor of Ashley Gager, who complained that Dell hounded her with more than 40 calls in less than three weeks to collect a delinquent debt, even after she had sent a letter asking for the calls to stop.

According to the court's opinion, in 2007 Gager used her cell phone number instead of her home phone number on an application for a Dell credit line, and then bought thousands of dollars of computer equipment. After Gager defaulted, Dell began leaving her automated messages, and continued doing so even after receiving a letter from Gager in December 2010 demanding that the calls stop.

Roth wrote that Dell will still be able to contact Gager by phone about her debt, as long as it doesn't use an automated dialing system.

The Federal Communication Commission stated in a 2008 Declaratory Ruling on TCPA, "autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the ‘prior express consent' of the called party." But the court concluded that a newer Declaratory Ruling by the FCC in 2012 supports the claim that a consumer may fully revoke prior express consent by transmitting an opt-out request to the sending party. This ruling reverses a lower court opinion from 2012 that said a letter by a debtor to a creditor does not revoke prior express consent.

Collection agency questions about this ruling can be asked at our upcoming Ask the Attorney webinar on August 29 at 2 p.m. Eastern.

The TCPA is set to outpace the Fair Debt Collection Practices Act (FDCPA) as the statute that causes the most confusion and lawsuits for compliance officers and operations, and it wasn't even geared toward the collection industry in the first place. Learn more about what collectors can do to stay up-to-date on the latest requirements under TCPA.


Veteran dismisses his abusive practices suit against debt collector
August 13, 2013 (Erik Slavin)

A disabled veteran who sued a law firm for allegedly telling him he "should have died" rather than collect disability payments has voluntarily withdrawn his lawsuit, according to federal court documents.

Michael Andrew Collier, a 100 percent disabled veteran, and his wife, Kim Collier-Dingman, withdrew their claims of abusive practices and violations of the Fair Debt Collection Practices Act following the case's Aug. 5 dismissal by Arizona District Court.

Gurstel Chargo, the law firm, had been hired by a loan corporation to collect on Collier-Dingman's defaulted student loan. In April 2012, the firm obtained a court order that required Desert Schools Federal Credit Union to block Collier-Dingman's access to the $6,143.88 in her account.

But the money came from veteran disability payments, as a result of head and spine injuries that Michael Collier suffered while serving in the Army, according to court documents. At a 2012 hearing, a judge ruled that the funds were legally exempt from debt collection. Following the hearing, Collier said he called an unidentified legal assistant at Gurstel Chargo to find out how to collect his money. During the call, he claimed, he was told:

"[Expletive] you! Pay us your money!" the complaint stated, attributing the words to the unnamed legal assistant. "You can't afford an attorney. You owe us. I hope your wife divorces [you]. If you would have served our country better, you would not be a disabled veteran living off Social Security while the rest of us honest Americans work our [expletive] off. Too bad; you should have died."

Harassment and use of profanity are illegal under the Federal Debt Collection Practices Act. The call led the Colliers to sue for the sum in the account, along with punitive damages.

A spokeswoman for Gurstel Chargo declined to say what eventually happened to the $6,143.88. The Colliers were unavailable for comment at home Monday evening in Arizona.

Gurstel Chargo stated that it conducted a thorough investigation and found no one associated with the firm to be at fault.

By signing the dismissal, the Colliers agreed that whomever it was that Collier may have spoken with had no affiliation with Gurstel Chargo.


Boom time for Spanish debt collectors
Collection agents, the "cobrador del frac," are shamelessly profiting from thousands of businesses going bus
August 9, 2013

(Credit: Flickr/ o.moreno_112)

Shameless. That is the word on everyone's lips as each day more revelations surface about the venality and corruption of Spain's political and business class. And yet there is one sector of Spanish business that is predicated on shame. It is the cobrador del frac (the frock-coated debt collector), a peculiarly Spanish institution that is booming as thousands of businesses go to the wall.

It is a simple and powerful device. If you see a man dressed in a black frock coat and top hat, carrying a black brief case standing outside an office, a house or next to someone's table in a restaurant, you know that person has not paid their debts. In effect, they are being named and shamed.

"The figure of the cobrador is so well known he doesn't have to say anything," says Juan Lorca, manager of the Barcelona office of the Cobrador del Frac, a company that has branches all over Spain and Portugal and which has been chasing debtors for the past 25 years.

"All they have to do is stand there. They never speak to the subject. They never do more than hand the debtor our card."

Business has risen by some 40% over the past five years as more and more Spanish companies go to the wall. "We're one of the few Spanish companies where business is booming," Lorca says. He says the idea originated in Ecuador where a group of business people decided to shame their creditors into paying by having them pursued by a man dressed as a chicken.

As well as the frock coat, other debt-collecting agencies employ actors to dress up as monks, bears and bullfighters. Each carries a black briefcase with "debt collector" printed on it in large letters, lest anyone be in any doubt.

Lorca says almost all their clients are businesses owed money by other businesses. The debts involved begin at €1,000 (£861) and there is a special department that deals with debts in excess of €100,000. "We do have clients who are owed millions, and this is becoming more frequent," he says. They work either for a fixed fee or for a percentage of the debt recovered. He claims an 80% success rate.

The industry is barely regulated and their methods can border on harassment.


Aware of these criticisms, Lorca is quick to point out that they only pursue "people who are able to pay but refuse to pay. We don't pursue people who have no money, but people who may have concealed their money in fake companies for example."

Consumer credit industry criticizes Ohio, Pennsylvania legislation on debt settlement
By Bank Credit News Reports
June 27, 2013

Both Ohio and Pennsylvania have introduced legislation that is intended to ramp up oversight of the for-profit debt settlement industry, but some industry participants maintain that the legislation does not address practices that may be harmful to consumers.

"We have written to the state legislators sponsoring this legislation in both Ohio and Pennsylvania outlining our concerns for consumers," David Jones, the president of the Association of Independent Consumer Credit Counseling Agencies, said. "Recent actions taken by the Consumer Financial Protection Bureau against abusive and even criminal debt settlement abuses would indicate that many consumers are still suffering because of the practices of some for-profit debt settlement companies, and these proposed bills will not help address the problem without substantial amendment."

Ohio H.B. 173, a bipartisan measure sponsored by Reps. Louis Terhar (R-Ohio) and Dale Mallory (D-Ohio), seeks to codify consumer protections adopted by the FTC into state law. Pennsylvania S.B. 622, sponsored by Rep. Kim L. Ward (R-Penn.), seeks to require licensure for individuals who provide debt settlement services.

AICCCA recommended amending both states' legislation to include caps on fees, restrictions on enrolling consumers whose financial conditions make it unlikely that they can successfully complete a debt settlement program, requirements to provide restitution and increased penalties for violations.


Credit & Collection Forum 2013 took place on June 6'th, at the JW Marriott Bucharest Grand Hotel in Bucharest
June 10, 2013

The event addressed credit and debt collection issues in the current economic environment, while attendees were treated to a wealth of learning and networking opportunities.

This year's list of speakers was composed of field experts, which focused on important aspects for improving their debt collection practices in such difficult economical conditions, in order to better control their liabilities.

Julieta Simionescu, Product Manager at ASF, held a speech on "How to increase the recovery rate from insolvency and forced execution processes", focused on optimizing collection processes for corporate customers portfolios, using Capone. Her audience found out that "Good knowledge of managed customer portfolio and its efficient segmentation, applying a risk profile in the early stages, applying prevention actions, adapting to a debtor's specific situation, closely monitoring insolvency and forced execution processes are key elements for debt collection in 2013."

Towards the end, all the speakers joined a discussion panel, where they answered questions from the audience and engaged in a debate, trying to estimate how debt collection industry will evolve during the following year and what collection companies should do, to secure their own financial situation.

Advantage Software Factory was present at the 4th edition of Credit Risk Management Conference, held on 24th may 2013 at Radisson Blu Hotel Bucharest and organized by ICAP Romania.

This year special guest was Prof. Edward Altman, Stern Business School from New York University, who spoke about the old and new models for estimating Default Probability, and their application in the current Romanian market environment.

The event included a discussion panel where Stefan Paun, ASF's CEO and other c-level executives of the Romanian market, debated on the topic "Credit Risk Management: What has changed and what do Credit Risk professionals have to be careful about in the present situation".

Home · About W&H · Credit Services · Risk Services · Countries Serviced · News · Links · Contact Us