MARKET MAKER

There was a time in the finance business where companies had to rely on people to do all of their collecting. These folks had to be hired, trained, monitored, and of course paid, then promoted or lost and the process began again. Expensive, you bet. Each business person tabulates their own costs for this, but it is not cheap.

That was then. Now, people are costlier, monitoring is costlier, and even with automatic dialers collections are not what they should be. When you consider this was the case prior to the current ‘economic climate’.

Funny thing happened on the way to the NADA, {San Francisco - (2008)}. At the AFSA conference just prior, there was a panel with industry heavy hitters, I will not name them, but AFSA knows who they were. A key topic was technology: one of the CEO’s said, “auto dialers do not work anymore, maybe even did not work that well before, what is the next technology?” Not an exact quote, but that was the gist of his statement. Another funny thing happened; the other panelists agreed.

Oops. I hope there was not a dialer salesman in the room. I do not remember anyone running out grabbing Kleenex or a weapon.

What does this have to do with ‘market maker’? Everything. In 1998, two nascent companies brought a new technology to the arena…starter interrupts. One was programmable with codes and an onboard clock while the other used RFID tags to advance their timer. The object was to have a programmed consequence if a customer did not pay.

Other benefits are:

• No unanswered phone calls
• No do not call me again messages
• Just a simple consequence
• No payment no drive… Just like the utility companies.

Now that is Cool! Besides that, it is profitable. Shareholders and board members, not to mention fund managers tend to like an increased R.O.I. Credit Unions, you too can play in this game and get an increased R.O.E.

Yes, it is Cool because they work. In the ensuing 12 years, these concepts developed into an industry that has proven results. These results are far and beyond any auto dialer’s etc. results. Static pool proof is available.

Question: Are you using them?
Answer: If not, you should be!
Why: They work!
Suggestion: Add them to your ‘secret sauce of underwriting’.

With deference to the panel (they have a higher pay grade than this writer), the answer to their expressed concern about what technology is next…it’s already here. Where! Check out one of the companies in the business. The professionals can be found at their association website. The Payment Assurance Technology Association (PATA), www.patassociation.com.

These are the people with the technology and the answers. What is more important today…they have the SOLUTION to non/sub prime auto collections, and they can prove it.
Combined technologies, automated reminders coupled with starter interrupts and location technology (gps) have proven to be the number 1 solution to collections nightmares. Either technology alone works, but when all three are combined, ‘the force is with you.’

Keep in mind what Mills B Lane the now deceased CEO and Chairman of the old C&S National Bank chain (large component of the current BofA) used to say: “Only the dead fish go with the current, don’t be afraid to swim upstream.”

My ex partner, Bill Robbins taught me, “the fruit is at the end of the limb.” Check out the companies that are PATA members and learn how to make solutions to your collections problems. You have a problem if your sub, sub, prime is not at 94% to 98% current.

If you have any concern about portfolio improvement and increased profitability, make the call now.