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Archive for July, 2009
Friday, July 10th, 2009
Medical or health care collection agents, like Federal Management, specialize in handling defaults of payment by persons availing health care. As the cost of health care is rising so are the defaults. There are various ways of paying for health care that a patient wants to avail of like through individual health plans, health maintenance organizations (HMO), corporate health plans etc. Because health care plans are complicated like part payment by the person availing health care and the rest by the third party health care service provider and various categories of the same, debt collection of over-dues require special debt collection agencies for doing the job. Also it allows health care providers like doctors and hospitals to focus on their job of providing health care and frees them from the burden of pursuing defaults.
Health care plans are offered under all sorts of hues and variations like co payment by the patients, deductibles, reimbursement of certain non medical expenses etc. There are also various other minute details involved that might not have been clear to the subscribers before the availing medical care. Because of these reasons, a patient might have exceeded the permissible limits. The health care collection agent becomes the fourth member along with the patient, the doctor and the third party health care provider involved in this maze of reimbursement of medical costs.
The medical collection agency has to follow legal procedure to recover the unpaid amount of delinquent cases. It may have to investigate who is at fault before proceeding with the recovery. Consulting the health care service provider and getting the details of the case would be the first step. Contacting the third party health care provider is the next step to find out if the patient was a subscriber at the time of availing the benefit. Also whether the medical procedures were included in the plan or not and whether the patient had exceeded the permissible limits are also to be probed.
Finally the medical debt recovery or collection agency has to target the patient or the third party health care provider or both as the case may be in order to recover the dues.
Tags: healthcare debt collection, medical debt collection
Posted in Debt News | No Comments »
Thursday, July 9th, 2009
Before the recent economic downturn, it was rapists and murdered who took centre stage in the courts but since then they have been surpassed by an ever increasing amount of property developers, bankers and businessmen as the Commercial Court takes centre stage and the business world is catapulted into the spotlight by the merciless procedures and publicity generated by the Commercial Court.
Unfortunately, with the ever increasing amount of debt related claims being processed, the courts are struggling to cope with the high levels of cases being sent their way.
For example, from January to May, 192 cases were admitted to the Commercial Court, compared to 243 for the whole of last year and earlier this week the Court, headed by High Court judge Peter Kelly, reached a new record when it ‘celebrated’ the largest ever number of feuding parties seeking entry to its list.
As the caseload hitting the courts shows no sign of slowing down, anticipation is high that the courts will be coming under further pressure in the upcoming months as the recession deepens, deals collapse, debts fall due and more companies go to the wall.
In London, there is no entry threshold for commercial cases, but what constitutes a commercial claim is strictly defined.
Possession and debt collection, which are a major feature of the Irish Commercial Court’s day-to-day activities, are generally dealt with elsewhere in the chancery division of the English courts.
In Ireland, separate High Court lists are also allocated to deal with issues such as bankruptcy and examinership, and perhaps it is just a sign of the times that debt currently dominates the Commercial Court.
Some are even daring to ask if the award-winning, ‘cards on the table’ court is becoming a victim of its own success and whether it has enough judges to manage the caseloads it faces.
Others question whether some of the cases should be dealt with elsewhere in the courts system.
“There is a risk that the Commercial Court is becoming a debt-collection court. Many of the cases there are not truly commercial in nature at all,” said one partner in a leading Dublin law firm.
“Foreign clients can not believe how inefficient our debt-collection system is. Debt recovery should be routine but our laws are so antiquated that people seek out efficiency and that is why they seek judgment in the Commercial Court.
Tags: commercial court, irish court system
Posted in International Debt News | No Comments »
Wednesday, July 8th, 2009
Landlords with expensive properties in central London are being more discriminating about who they will accept as tenants as they become concerned about the threat of rent defaults and periods of vacancy.
Letting agents are putting prospective tenants through rigorous credit checks as property owners want to see proof of income, including bonuses, as well as highly personal information such as the value of investment and share portfolios and savings accounts.
Knight Frank, the agent, said it had reviewed its reference process for new tenants to make sure it could provide enough data for landlords. Rather than using traditional credit checking agencies it is now conducting manual checks itself.
In some cases it is having to procure an indication of the tenants’ net wealth from their banks as well as guarantees from their employers that their jobs are permanent and not under threat, and details of their anticipated bonuses.
“This is a pretty radical change,” said David Mumby, who runs Knight Frank’s Chelsea office. “We are doing much more thorough checks as putting tenants through a reference company is simply not enough any more.”
Tags: london landlords, tenant credit checks
Posted in Debt News, Financial News | No Comments »
Tuesday, July 7th, 2009
In an investigation run by the Observer, it was revealed that four of the UK’s largest debt collection agencies were owned by private equity firms, a revelation that has caused concern amongst politicians.
A fifth is also partly owned by a hedge fund and two banks, including HBOS.
The largest of the four firms, is 1st Credit a large debt recovery company who are owned by Bridgepoint, one of the largest private equity firms in Europe. 1st Credit featured heavily in the press earlier this year after being hit with several serious sanctions by the Office of Fair Trading, who decided the firm caused unnecessary hassle and worry to debtors and raised concerns with the way in which 1st Credit handled debtors with mental or medical health problems.
The other three firms who are owned by private equity firms are Wescot Credit Services who are owned by Alchemy Partners, a leveraged financial outfit managed by Jon Moulton; Cabot Financial, one of the most profitable firms in the debt collection industry, owned by Nikki Citigroup; and Lowell Group, which buys debt from banks that most firms will not touch, owned by Exponent, a medium sized private equity firm.
Lord Oakeshott, the Liberal Democrat Treasury spokesman, said: “There are a lot of people who are struggling with debts and unemployment. They’re now paying for the private equity leverage boom as the economy pays a price for over-borrowings by these firms.”
Faisel Rahman, managing director of Fair Finance, which offers affordable loans to those with financial problems, said: “We have seen in recent months a shift in the way these firms approach their clients. As times get tougher, rather than being more responsive to the real difficulties people face, they are being far tougher.
“Banks lend to individuals through brokers and the debt is packaged up and sold on … My fear is, banks are so far removed they can’t see the impact on their customers.”
Tags: debt collection agencies, private equity firms
Posted in Debt News, Financial News | No Comments »
Monday, July 6th, 2009
Two hundred and seventy-six people were imprisoned for not paying their debts last year, according to a report published today by the Free Legal Advice Centre.
The centre says the figures underline the need for urgent reform of Ireland’s “Dickensian” laws on debt enforcement.
It says the process of debt collection in Ireland almost seems designed to exclude the debtor from having a role and from understanding what is involved.
FLAC’s call for reform is being supported by the Irish Banking Federation, which says the current process causes unnecessary distress and wastes resources.
Posted in International Debt News | No Comments »
Friday, July 3rd, 2009
If you are a small business owner, you know how important customers are to your success. By making timely payments on the goods and services you provide, customers help give your company the resources vital to growth. Unfortunately, there will probably come a time when a customer fails to pay off a debt, and you will be forced to seek payment by any means necessary. One such way to receive overdue payments is through using a debt collection agency.
A debt collection agency is basically any company hired by a business to collect money that is owed. These companies should be employed as a last resort, but they can be very helpful if needed. One major benefit to employing a debt recovery agency is time; more specifically the recovery of time crucial to operating your business. If you are busy writing letters and making phone calls to a customer who owes you money, you are certainly losing productivity. Debt collection agencies have the people available to handle all aspects of getting your money, so you can return your focus where it belongs – on your business.
Debt collection agencies also send a message to the customer that you are serious about recovering the funds. When faced with the prospect of a constant barrage of phone calls at home and work, most people elect to pay off the debt. In addition, the threat of having their credit score negatively affected usually yields payment. But despite these negative consequences, there are still people who refuse to pay. How can a debt collection help in this case?
Depending on the size of the outstanding debt, and if there is still no sign that a customer intends to pay, you do have the option of going to court. A debt collection agency will be able to handle the legal aspects of the proceedings, which can be a huge advantage. However, it is important to consider all sides of the case before deciding to proceed. Court will likely be a costly proposition, and unless the debt is large enough to warrant legal action, it may be best just to bite the bullet and take the loss.
One final benefit of employing a debt collection agency is the fact that these companies only get paid if they can recover the debt. This makes a debt collection agency a low-risk option in your attempt to recover back payments. If they are unable to get the customer to pay, you have at least saved the time that would otherwise have been lost. And if they are able to secure the payment, you will only have to pay them between 4% and 10% of the debt. This creates a win/win situation for both you and your business.
For a small business owner, the benefits of employing a debt collection agency are undeniable. In a perfect world, your business will avoid ever needing to use such a company. But it’s nice to know that a debt collection agency is standing ready, just in case.
Tags: debt collection agencies, small business debt
Posted in Debt News | No Comments »
Thursday, July 2nd, 2009
Bad debt is basically receivable accounts that will likely remain uncollected and will ultimately be written off. To a company, bad debt collection will appear as an expense on a companies income statements which reduces a companies net income.
Many companies use bad debt figures when estimating earnings, using past records for the relevant time period to estimate how much bad debt the company may incur. A lot of companies will make an allowance for bad debt as not all debtors will clear off their bad debt.
One of the ways of increasing the amout of bad debt that is collected is through the use of a bad debt recovery company, such as Federal Management, who can help to quickly recover the bad debts of a company and icnrease the incoming cash flow. Federal Management provide many bad debt recovery services throughout the UK and internationally.
Many companies experiencing financial difficulties will prioritize their creditors for payment. This suggests those creditors who demonstrate the seriousness of continued non-payment are most likely to be paid first. Our, i.e. Federal Management’s bad debt collection services can help do just this, and are one of the most efficient and cost-effective ways of prioritizing an account for payment.
Tags: bad debt, increasing cash flow
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Wednesday, July 1st, 2009
In hiCopany Penalties, Banking Systems introductory statement, Lord Turner, chairman of the FSA, said that since mid 2007, confidence in the global banking system has suffered a dramatic collapse and clearly this has implications for finance ministries, central banks and regulators.
Lord Turner said:
“The year 2008-09 has been an extremely difficult one for regulators across the world. Looking at the year as a whole, I believe the FSA has dealt successfully with the immediate crisis, and taken actions to ensure that we build a more stable financial system for the future.”
In his report the FSA chief executive Hector Sants summed up the year by saying:
“It is critical to understand that the individual firm problems we have seen emerge in the last year had their origins in the boom, and were not reversible in the current market conditions. Our objectives in the past 12 months have been to minimise the impact of these weaknesses and to lay the foundations of a more effective and better regime for the future. I believe we have made good progress in extremely difficult conditions in pursuit of these goals.
“I hope we have begun the process of rebuilding confidence in the system and the regulator by demonstrating that we are an organisation that is willing to learn and that we have the ability to change radically. I believe enduring and respected organisations are forged in times of adversity and that this will ultimately be seen as such a time for the FSA.”
The key element of radical change has been the implementation of the Supervisory Enhancement Programme.
In this respect the key points are:
- The increase in the supervisory staff from 526 to 703
- The FSA began changing the authorisation process for Significant Influence Functions (SIFs) to ensure it was judging the competence and regulatory knowledge of senior people at firms as well as their probity
- The FSA reorganised and strengthened its risk identification and mitigation capacity
- The FSA revised its supervisory risk assessment framework to include greater focus on business models
- The FSA increased its engagement with auditors and investors to emphasise their role in the oversight of firms.
Appendices to the report, also published today on the FSA website, provide further statistical information on the FSA’s work during the year.
This includes:
- The FSA’s enforcement division closed 302 investigations during the year resulting in 371 outcomes. Of these, 243 concluded with the use of powers (such as prohibition, financial penalties and variations of permissions) and 128 without the use of powers. 30 of these 128 outcomes were private warnings.
- The FSA levied £27.3 million in financial penalties during the year compared to £4.4 million last year and prohibited a record 58 individuals from carrying out regulated activities compared to 30 the year before. This reflects the FSA’s more proactive approach to enforcement – the credible deterrence philosophy – set out last year.
Of the 59 targets the FSA set itself for 2008/09, 39 were delivered on schedule. Of the other 20, 10 were re-planned but still delivered in the 2008/09 financial year and 10 are still to be delivered.
- The number of regulated firms decreased from 28,325 to 27,340.
- The number of approved persons decreased from 172,077 to 166,420.
Page 79 of the Report sets out details of the remuneration of FSA Board members
Adair Turner’s total remuneration for the period 20/09/08-31/03/09 was £246,546, made up of salary of £219,000 and benefits totalling £27,346. Hector Sants’ total remuneration was £623,170 (2007/08: £661,948). This comprised salary of £478,000 and other benefits totalling £145,170. He declined to take his bonus award of £130,000.
Tags: Company Penalties, financial system, FSA
Posted in Financial News | No Comments »
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