Secure Collateral Management (www.secure-cm.com) who recently made news by offering their network of Recovery Agents “Same Day Pay” with zero fees on recovered assignments, announced Thursday, May 02, 2013 its desire to also offer Positive Resolution Fees to their Recovery Agents.
In an unprecedented move, Jim Farley, Principal-CFO, of Secure Collateral Management, emailed the entire network of Recovery Agents seeking their input and suggestions on this new program.
In the email, Mr. Farley states; “Secure CM believes that if an agent knocks on a door or makes contact with a debtor and is unable to repossess the vehicle, but the debtor goes the next day and pays current or pays the vehicle off that there should be a positive resolution fee paid to the agent.”
Mr. Farley continues in his message by acknowledging the importance of Recovery Agent input by seeking the agents’ help in setting the standards of the program, “We want your input on how to put this program together, what actions on your part would constitute a positive resolution fee and what you believe is a reasonable fee for these actions.” The input of agents is of such importance; Mr. Farley requested all suggestions to be emailed directly to him.
Secure Collateral Management also acknowledges in the email the recent increase in costs of compliance and insurance bared by the Recovery Agents, “We know it is tough out there especially with all the new compliance regulations and associated increased insurance costs. We want to work with you to help generate new income streams for your business. As always these fees will be paid the same day a close and bill is approved by the client (for all agents set up for electronic payments).”
Secured Collateral Management would like to implement the Positive Resolution Fee Program by mid-May.
While Secure Collateral Management currently offers assignments on a contingent basis, it cannot be denied their willingness to work with Recovery Agents to the best of their ability. Secure Collateral Management continues to set the bar higher for other forwarders and offer better benefits to Recovery Agents than any others in the Contingent field.
Secure Collateral Management can be contacted at info@secure-cm.com or (972) 226-2440
Jim Farley, Principal – CFO of Secure Collateral Management can be contacted at jfarley@secure-cm.com
Alex Allen
General Manager
Anytime Recovery
A few years ago Ron Brown sent out a note to TFA members about Resolution Fees with a good, to the point, easy for clients to understand explanation. I read it and it made perfect sense to me. I was charging an extra $50.00 over a close for what I billed out as a Cure/Locate or Resolution. After reading the note, I done away with the Cure/Locate fee and changed it to a Resolution Fee which is the same as a repo fee. I have had great results and have only been questioned one time about the fee. The client wanted to know why I charged the same since I didn’t actually tow it. I explained that the reason the debtor was so eager to resolve the account was because of the Driver and the $65k dollar wrecker in his driveway. I still had the same expense involved. I would like to share the note
, and hope Ron does not mind.
RESOLUTION…..SAME AS REPOSSESSION
I am often asked by clients and other recovery specialist exactly what does the phrase
“Resolution…same as repossession” actually mean and what a “Resolution” is.
I would like to explain this statement by first stating that when a request is made by a
lender for a repossession of mortgaged collateral and an assignment is placed with a
professional recovery agent one of three things are going to take place.
One, the mortgaged property is located and recovered; this is “Repossession”.
Two, the mortgaged property either cannot be located or due to extenuating
circumstances cannot be recovered without “breach of peace” and the client or recovery
specialist decides to cease further attempts to recover the mortgaged property. This is
usually referred to as a “Close”.
Three, the recovery specialists unable, for various reasons to affect a peaceable self help
recovery and contact with the consumer is warranted. This may be a case where the
vehicle is secured inside a garage, never present at the given address or it may be the
consumer just wants to talk with the lender before they surrender the vehicle. At this
point the lender has control of the situation and may decide to let the consumer “pay
current” and keep the vehicle. The recovery agent has no control over what the lender
decides. In most cases a knowledgeable lender, knowledgeable of the conditions of his
contractual arrangement with the consumer, will request the consumer to pay the past due
payment payments plus the recovery agent’s charges. If the consumer complies then
there has been no cost whatsoever to the lender and his account is now current. It also is
the lender’s right in most cases to add the recovery costs to the balance of the consumers
account so again there is actually no cost to the lender. This action is commonly
recognized in the lending industry as a “Resolution”.
Usually a “Resolution” is the most desirable of the three results if the consumer’s past
pay records so warrant. And it must be noted that the lender is the one who makes the
decision to enable the consumer to “pay current”.
Why then in this win-win situation, would not the recovery agent be entitled to his full
recovery fee? He certainly has earned it by making a direct face to face contact with the
consumer, which in itself can be extremely dangerous, and demanding surrender of the
mortgaged property. This action on the recovery agent’s part is the catalyst which has
brought the lender’s accounts current and once again put it in good status.
This is why we us the phrase “Resolution…same as repossession” and why the charge
is the same for each.
In my opinion,ANY work done by an agent deserves payment.It is very very funny to me that you people take work for nothing and then complain when companies want you to work for free!! Stop giving away your services for free and people will stop asking you to do so.Ken
When will someone speak up and voice what I have seen in every law suit where I have written opinions, given depositions and testified. CONTINGENCY CREATES A ULTRA VOLATILE SCENARIO WHICH WILL RESULT IN INJURY OR DEATH. It is all about money, if the vehicle is not recovered and the agent doesnt get paid then there will be chances taken, warnings ignored and laws broken… this is a proven and given fact. Two specific cases I have worked on resulted in death of a consumer, both because the agent went beyond normal and accepted recovery procedures and practices, ignoring the debtors demand to “STOP”. “Stop” meant “NO MONEY” and as I said, it is all about money.
I have written to the CFPB, citing the inherent dangers of “Contingency Assignments” and requested that they closely look at those entities requesting such services. Maybe some stiff fines will slow this trend down.
Work coming out our ears. Struggling to hire competent employees that did the job and didn’t lie to you because you were paying them so well for the units they brought in. Keeping equipment that was being rode hard and put away wet on the road and safe to operate. Getting paid to do your job, so you could afford to give those employees some of the benefits the people you worked for got as a matter of course. Yes, some companies just milked the system and others made commitments they felt morally obligated to keep. So when a brilliant gentleman in the recovery business in California decided to start contingent repossession as a way to get in the door to the majors where the volume was this industry started to change for the worse. I refused to work for free even though my recovery rate would have supported it at the fees being paid at that time. This was in the 80’s. The fees have not changed. The attitudes that you owe me an update every thirty minutes have not changed. The lack of professionalism in the industry as a whole has not changed. What has changed? How many of you can afford health insurance for yourself, let alone your staff. How old is your fleet? How many of you can afford an SASE16 audit? How many of you can say I make what the average profit is for a service company. How many of you even know what the average profit is for a service company? If you are working contingent and not screwing some other customers to make up for the volume, I don’t see how you can do it. What we lost in this industry was INTEGRITY. It is time to grow a pair, and start behaving like men instead of slaves. You can only be abused as long as you let it happen. And it is a start when a client understands that if he doesn’t start doing something, no one will hire him to hire you. But then again, if his business model was professionally oriented, customers would flock to him, just like they did to us when we got paid for everything because we did the JOB.
David: Thank you for your response. Please allow me to start with; I agree. I have spent sometime looking in to how the repossession industry got to this point; forwarders, contingent work, less fees, etc.
I do not like contingent work, lower rates, free storage, no close fees, free keys, and being dictated to by a financial institution as to how to run our agency or what I can or cannot charge anymore than any other recovery agency.
As specifically to close fees, based on what I have learned, I feel the recovery industry is to blame. We beat that horse right in to the ground. We abused it and thus we lost it. Back in the 90’s everyone was getting close fees. There was a direct relationship between banks and recovery agents. In looking back, it was utopia. Work was coming out our ears and agents started getting behind, taking short cuts, not thoroughly assignments, Google mapping updates, and at some point got a little lazy. All with the knowledge that at minimum, there was a close fee. The banks realized this and our trust was lost. Enter the forwarder and contingent fees.
Now my point here is not to dig up old bones, but simply to say that we are were we are. Where do we go from here? I personally feel the “just say No” campaign is not working, nor is the wishful thinking that forwarders and contingent work will suddenly be wiped from the face of the earth. So I am left with the choice of either continue complain or find ways to improve the current system. I have chosen the later as it seems to be more productive in the end.
Secure Collateral Management is a contingent forwarder. Regardless of your personal choice in doing contingent work or not, I am not in the position to tell them how to run their business while at the same time being upset by someone else telling me how to run ours. What I can do is keep the lines of communication open and encourage them to work with us to the best of their ability.
No, Mr. Farley is not a savior, nor has he stumbled on to anything new. What he has done in the past few weeks by offering same day pay without fees and now by offering cure fees, is to put the other forwarders and contingent assignees on notice that they need to raise their game and recognize the importance recovery agents and financial challenges they are facing.
I applaud Mr. Farley and Secure Collateral Management for their strides in this endeavor. I recognize that Mr. Farley has his bills to pay and mouths to feed as much as any of us. I would rather have someone make money with me, than off me.
Hopefully next year at NARS, we will be discussing 2 ideas I have presented. One is to establish an anonymous recovery agent “score card” on lien holders and forwarders, the second is to present to the CFPB a minimum standard index (similar to the federal minimum wage law) that would protect the consumer from unethical repossessions performed by sub-standard lien holders, forwarders, and recovery agents.
There is more to it, but as they say; more will be reviled.
Regardless, I am glad we are all moving forward to a unified industry.
I would say it is a start. However, I believe that we need to be compensated for any close – regardless of the results. It’s just not justifiable to expect us to work an account (sometimes for weeks or even months), close it with us for any number of reasons that the bank my not consider to be positive (bankruptcy, car is in another state, car is impounded, time to try another agency, etc…) – and then pay us nothing. In many cases we have expended untold hours talking to the customer, neighbors, relatives, bank reps – you name it – and our thank you is CLOSE – NO BILL. I can tell you that doesn’t work. Another thing that I see happenning more and more with all of these forwarding companies popping up everywhere (and Secure Property Management is another one that I’ve never heard of until today) is banks closing accounts with one forwarder or agent and opening that same account up with another forwarder or agent – and they do this because there is no close fee associated with it. Often times agents will have an account closed by ABC Forwarding Company in the morning and have it opened with XYZ Forwarding Company in the afternoon. The same account…the same info. I get putting a new set of eyes on an account. But so often a company has wrung out all the information that there is to wring out of an account – or is unwilling to do something illegal to get the collateral (cut a lock on a fence, break into a garage) and the forwarder or bank rep wants to find someone that just might do something that will get them the car. They’ve got nothing to lose because we don’t get close fees in so many cases. So, again…this is a start – a STEP in the right direction – but a long ways from satisfactory. By the way, in reading the comments on this discussion you would think that Mr. Farley has hit upon some previously unheard of idea…perish the thought. Lots of lenders are doing this and more and have been for some time. Come on guys – we deserve better…someone tosses a crumb our way and we act like he’s a savior. I applaud anyone that is willing to make things better but what you need to be telling him is that it’s still not enough. Wait until you do all of these things to get your Positive Resolution Fee only to find out that the bank won’t pay because they say that they talked to the guy’s wife the night before, or they don’t want to deal with the account anymore – they just want the money – or he didn’t pay enough. We need to be Non-Contingent people. That is the only way it works.
ps: as always, thanks Alex for bringing this information forward.
Mr. Farley,
With technology what it is today, most repossessors have the ability to make personal contact with your customers and actually put your customers on their smart phone to speak directly with your internal collectors and arrange for immediate payment. This is as valuable and in some cases more valuable than actually the repossession of your collateral. This form of service deserves payment of a close fee, or PRF as you refer to it. Thank you for your willingness to recognize the value of what additional services repossessors can bring to the table. I’m sure I’m not the only one who would be happy to discuss this matter further with you.
Art Christensen, President
Commercial Service Corporation
Newark, NJ
973-699-8276
This looks like someone that gets it, treat me right and I will work hard for you.
So this looks like someone that gets it. Treat me right and I will work hard for you.
A man with a vision !!! There might be hope for you guys still.