ARMS (American Recovery Management Solutions) is a not-for-profit corporation formed by the American Recovery Association (ARA). It came into being because many of the large forwarding companies (auctions) have driven the price of repossessions down to a point of non-viability. To stay in business many repossession companies have had to hire unqualified employees and adopt shoddy or even unethical, dangerous and unlawful business practices. (Look at all the headlines today featuring repossessions gone bad to see examples of this)
Many of us can remember a time when the collector developed a strong business relationship with the repossession agent or agents they used. Together they worked to find the collateral and get it recovered. Each unit found was a shared success with shared celebration. This partnership is very effective because each is in close communication with the other and they can share information readily. Most local credit unions or finance companies and a few national lenders still operate this way. If you talk to any person in collections, virtually all of them will agree that this is the ideal scenario for efficiency and high recovery rates, not to mention the high morale that comes from successful business relationships.
The forwarding model is good for lenders in that it enables them not to have to maintain a large repossession department and all the added expense associated with monitoring and staffing it. However, as has been proven time and time again, putting an extra layer and additional people between the collector and the repossession agent severely cuts down the recovery rate, overall profitability and morale of the lender. The national auctions didn’t truly understand the repossession business when they set up their forwarding companies and so underpaid the repossessor. This has resulted in sub-par repossession companies coming into existence and previously highly qualified companies cutting corners in order to make a profit. Now, with the CFPB scrutinizing lenders and their venders, lenders and repossession companies are going to have to meet compliance standards never before dreamed of in the repossession industry.
These are the reasons it became necessary to form ARMS. ARMS is the new “forwarding” model formed by the American Recovery Association which, while handling all compliance issues, billings, assignments and other matters for the lender, facilitates that one-on-one communication between the lender and the recovery agent. Virtually all ARMS agents are members of the ARA and each meets ARMS’ demanding compliance standards. Every ARMS agent is fully qualified, has an experienced track record in the industry and is thoroughly inspected and vetted as to their operations, insurance, bonding, personnel, continuing education and more. As it is not for profit, more money is passed along to the recovery agent who can now maintain a quality service and put the correct amount of effort into securing the collateral. All of this results in a higher recovery rate, increased profits, brand protection and higher morale for the lender.
ARMS is set up now to handle large lenders who have accounts to assign out anywhere in the country and local lenders who have their own local agents but need help getting some of their out-of-town or national recoveries done. More information about ARMS can be found at www.ara-arms.com or by calling (855) 272-2767.