The Dangers of Ignorance and Complacency

Yesterday, we learned that state Attorneys General in Louisiana and Washington took actions against three collection agencies (“Two State Attorneys General Take Action on Debt Collection Agencies,” Jan. 11). I cringed as I read the announcement. What happened now?” I thought. “Who could it be?” I asked myself. I wanted to know.

Through the news article, I found out the names of the agencies and individuals involved. At first glance I did not recognize them and I felt somewhat relieved. I went further and checked our firm’s various databases because I wanted to confirm my initial notions which were absolutely correct.

These collection agencies and the individuals named were not in our records anywhere. I did a keyword search on SearchReceivables.com and could not find any information on either company (except for the original news article about the agency in Washington). I made some phone calls to check with some of my friends in the industry who I believe are well connected and found out they never heard of the agencies or individuals involved either. That’s why I decided to blog about this matter.

Without any other information, a casual reader might assume that this article describes typical behavior in the industry.  Most readers would have no way of knowing that these incidents involved rogue individuals who are not part of the ARM community and do not represent the ARM industry. We can’t count on mainstream media outlets and local press to cover the whole story. It’s up to all of us.

I think that it is critical for all of us to know what’s going on in our industry and take action when necessary. Take time each day to read the news. Find time to review information and analysis from reliable sources. Through insideARM.com, we strive to make it easier for you by providing timely and accurate news and information so that all of us, the constituents of this industry, can make informed decisions about how we should operate our own businesses. None of us want to be blindsided when we walk into our client’s or lenders’ office and they ask us to explain why the state AG obtained an injunction against a collection agency — and what measures are being taken to assure this won’t happen to them.

Once we know the facts, we can and should act upon these news items. Get involved. If it’s a local story, write to the editor of your local paper and tell them what you think. Make personal visits to your clients and prospects with a copy of the article in hand and tell the decision makers why your business is different and why they can rely on you. Don’t let them draw their own — often erroneous — conclusions. Call your lenders and business partners and tell them the rogue agencies are the exceptions and not the rule. Call your staff together, show them the article and proudly proclaim “not us.” Explain that you would never operate this way because you understand the rules, you train, supervise, and won’t tolerate it.

Pay attention. Know what’s going on. Get your information from a reliable source and take action. Get involved. It does not take much time to stay informed. It could be very positively received by your clients if you approach them directly. And misperceptions are not only painful and time consuming to deal with; they may have long term repercussions for your business and the industry.

Mike Ginsberg is the leading M&A expert for the accounts receivable management industry. He leads a premier advisory team that helps ARM industry owners and executives succeed in their growth, exit, and M&A strategies. Mike and his team will be hosting a live webinar, “The State of the Industry” at EXPO 3.0 on February 16, 2010. Admission is free, so register today!