Ross Chapman, FCADebtorCorp CollectionsPrompt, Professional, Receivables Solutions

DEBT COLLECTION:

or Aggression?

Profession…

OR

So What Are We?

• Stress for owners, staff, creditors, debtors

• Pressure on cash inflows & outflows

• Household debt as percentageof disposable income – 150%

• 1992 – 50%

• Truth v Lies

• Iron Fist–Velvet Glove :: Loudspeaker–Sledgehammer

Tackling the Post-GFC Financial Crisis

Industry & Professional Standards• Debt collection guideline for

collectors and creditors:joint publication by ACCCand ASIC

• Department of FairTrading - Privacy Acts – Self Regulation

• The Institute ofMercantile Agents

Industry & Professional Standards (cont’d)

• Australian Institute of Credit Management

• Financial OmbudsmanService

• Credit OmbudsmanService

• Energy & WaterOmbudsman

• TelecommunicationsIndustry Ombudsman

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

So What are People Sayingand What is Reality?

• Threats of legal action – deliberatemisinformation & phone harassment

• Continuous phone calls inside and outsideof allowable calling times

• Bullying, coercion, manipulation, pressure

• Enquiring about bonafide long outstanding debtwhich is detrimentally impacting creditor’scashflow and business including staff retention

• Attempting to work with debtorto arrange mutually beneficialpayment arrangement

• Calmly responding to abusivebarrages from debtor

• Dealing with false claims ofharassment, breaching ofACCC / ASIC guidelines,denial of signed documentsproving debts due – by serial non-payers

Telecommunications Ombudsman

• Creditors have better memories thandebtors – 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. “

Could it be the Lure or the Lack of the Almighty Dollar $$$ !!!

• “When I was young I thought that money was the mostimportant thing in life; now that I am old I know that it is”-Oscar Wilde

• “The hardest thing is to take less when you can get more”-Kin Hubbard

• Client and collection firms’ internal staffperformance measurement policies

• Remuneration policies

• Pay peanuts—get monkeys

Where are we in the World of Debt Stress?AVERAGE NATIONAL TRADE PAYMENT DAYSQ2 2009 – Q2 2012 (Dun & Bradstreet)

PeriodNew South

Wales Victoria QueenslandSouth

AustraliaWestern Australia Tasmania

Northern Territory

Australian Capital

Territory Australia

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

ANNUAL (2008–2011)

Australian insolvency statisticsReleased: 3 July 2012Table 1.1 - Companies entering EXAD–Region summary, ANNUAL, QUARTERLY

The Answer…

Did you really doubtit would be anything else…

MELBOURNE • SYDNEY • BRISBANESUNSHINE COAST • AUCKLAND, NZ

Prompt, Professional Receivables Solutions

1300 433 2826 • debtorcorp.com.au