New Zealand Firm Aims to do Away with 'Debt Collection'

A Christchurch, New Zealand entrepreneur has formed an online credit-checking business aimed at doing away with old fashioned debt collection.

Robert Gutry was working in the finance industry when he decided a gap existed in the market for more up-to-date credit information and a better way of getting people to pay.

He came up with Final Check, an online credit checking system whose sole purpose is to get people to pay, without having to use debt collection.

The system works on a membership basis, involving a flat $660 annual fee.  Firms sign up and share information about creditors online.  Debts are listed on the system after 30 days, and a letter is generated to the debtor to say they need to pay up.  The penalty for not paying is having your name put on the Final Check’s list, which means none of its members will give you credit.

"Once you pay you come off the list and you can get credit again," said Gutry. "The incentive is that if you pay you get off the list, rather than banning someone from getting credit for five years regardless. Once you do that there is no incentive to pay. We believe that this is preferable to having to waste valuable time and money associated with debt collection."

Final Check is targeting members in the same industries such as building.

"Members may be rivals but it is in everyone’s interest to join. That way they look after each other," Gutry continued. "They may be in competition but they don’t want to see individuals going around ripping off everyone. If we get enough members using the system the likelihood of anyone getting credit who shouldn’t is limited. We then eliminate the need for debt collection."

Final Check started out with 10 members six months ago. It has six staff and is planning to take on another four in the new year.

However, Gutry said getting it off the ground had taken a long time because of the amount of legal work involved. The system had been designed to meet the requirements of both the Privacy Act and the Credit Reporting Act.

Final Check is also targeting commercial and residential landlords with rental defaulters listed.