Justin Zane offered vivid imagery to finance company attendees during the opening session of ALS Resolvion’s Innovations in Recovery Summit last week on the topic of updates regarding agencies’ efforts to find vehicles that are out for repossession.
“Visualize a truck backing up to your door every day with 410,000 updates, dumping it and then driving away,” said Zane, who is the chief executive officer of Recovery Database Network (RDN) and Clearplan, each part of the KAR Global family of companies.
“Most agents are contingency now. They’re not going to get paid unless they secure the collateral, so the actions don’t stop,” Zane continued. “These agencies are still going to run all these accounts repetitively try to secure your collateral, but their updates that they’re sending back to you, you can’t consume them.”
MBSi Corp. president Cort DeHart participated on this panel, as well, chiming in on Zane’s descriptions.
“These are remnants from a bygone era,” DeHart said. “It’s one of those habits that are hard to break.”
Both Zane and DeHart explained that their technology companies not only are trying to change industry habits, but also streamline processes by leveraging technology. Especially since when it comes to charge-offs, repossessions and recoveries, time truly is money.
Zane described enhanced ways firms are getting updates to finance companies.
“Whether it’s through API, whether you’re logging into Cort’s system, whether you’re logging into mine, you’re consuming all this data. What we’re trying to do is we’re trying to ease the industry into the process. Instead of a text update, what you’ll be receiving is kind of a categorized set of updates,” Zane said.
“If it’s a simple, ‘Ran the address, no unit found,’ that’s going to be an update type. And the next phase of that is also going to be your kind of discounted, or your invalidated information, because a lot of a lot of agencies will tell you in an update that this address is no longer any good. But per your automated systems, you are still asking for an update on 123 Main Street, even though on the first day, that agency told you this address is no good. It’s vacant, and it was vacant three times I ran it for three other companies,” he continued.
“So what we want to do is categorize those into buckets, if you will, or update types. The only thing you’re going to be doing is actually filtering through either we found new information, or we need information. But the simple status updates, we think that those are a thing of the past,” Zane went on to say.
Along with a new way of presenting data, Zane also elaborated on what else might be on the horizon for the recovery industry,
“You’re going to see cleaner data,” he said. “We’re already introducing you to real-time connectivity at the agent at the agent level. You’re already getting connected much, much quicker to your assignments. Your assignments are getting filled faster. Agents aren’t coming back and updating their accounts at the end of the night anymore, because they have to be within a certain proximity of the address to perform an update. The information you guys are getting is already better. You may not realize because it still comes through the same conduit.
“Now our job is to make the information cleaner and more consumable,” Zane added. “The next two to three year, even though even though our space has been really, really slow to move with technology, technology forces more speed now on every industry, and I think you’re going to see a lot of advancements.”
DeHart also insisted the recovery industry must continue to adopt technology to improve itself. He pointed to significant reductions in wrongful repossessions since mobile technology can connect the finance company with the repossession agent almost instantly if the customer finds the funds to redeem their contact and become current.
“I will say that to the extent that we can use data to make decisions in real time, that are not monolithic across the board, across the whole portfolio, but the ability to consume the data, use it to drive workflow and processes downstream, that might be where we could get in the near future. And I think that’s a huge step forward,” DeHart said.
“The new platforms will be able to keep up with data changes and things that we don’t even know are out there yet because they’re architected with different plug-and-play options and new technologies that may be developed in a different industry,” he went on to say.
Experian determined the 60-day delinquency rate remained almost at the exact same reading year-over-year, with the second-quarter rate coming in at 0.65%. That’s just 1 basis point higher than what analysts spotted after Q2 2018.
Experian’s Q2 2019 State of the Automotive Finance Market report did show a bit of rise in accounts set to be charged off among finance companies. That’s the collection of providers that Experian sees often catering to subprime customers while operating without deposits like commercial banks and credit unions.
For those finance companies, analysts noticed their 60-day delinquencies rose to 1.40% in Q2, representing an 8 basis-point lift year-over-year.
As far as the areas where 60-day delinquencies are most prevalent, Experian pinpointing the Top 10 for the second quarter, mentioning many locations familiar to skip-tracers and repossession agents. Here is the latest rundown:
1. Mississippi: 1.19%
2. Maryland: 1.10%
3. Louisiana: 1.08%
4. Washington, D.C.: 1.08%
5. Georgia: 0.94%
6. South Carolina: 0.86%
7. Alabama: 0.82%
8. Arkansas: 0.82%
9. New Mexico: 0.77%
10. North Carolina: 0.75%
During this summer’s Automotive Intelligence Summit, masterQueue finalized a partnership with PassTime. On Thursday, the web-based Software-as-a-Service platform that can automate the skip-tracing process expanded its relationship with PAR North America, a business unit of KAR Auction Services.
According to a news release, PAR said it has enhanced its capabilities through the power of masterQueue — giving PAR a more efficient tool for skip-tracing.
“As they face higher recovery costs, our customers demand solutions that can provide efficiencies while increasing recovery rates,” PAR president Lisa Scott said. “Partnering with one of the most reliable, respected automation platforms in the industry gives our customers confidence, knowing they are getting the most precise skip tracing information that ultimately could lead to increased recovery rates.”
masterQueue can improve productivity and efficiency by combining the power of artificial intelligence and data with its seamless, streamlined collections and skip tracing information solution. Its platform is a single software solution uniquely designed to automate data collection, manage regulatory compliance and maintain data privacy.
“The skip-tracing process has its challenges, especially when lenders lose touch with their customers,” said Shannon Berry, skip services and project manager at PAR.
“Now, together with masterQueue, we have simplified the process with aggregated, up-to-date information in one easy-to-use solution. PAR customers will benefit from enhanced, informed reporting and potentially improved recovery rates,” Berry went on to say.
Representatives from both masterQueue and PAR will be participating in Repo Con, which is presented by Millennium Capital and Recovery. Repo Con is part of the industry-leading conference conducted during Used Car Week, which begins on Nov. 11 at the Red Rock Resort in Las Vegas.
Agenda details and Early Bird Registration discounts available through Oct. 1 can be found by going to www.usedcarweek.biz.
Collections agents, skip-tracers and other personnel associated with repossessions and recovery will have to wait a while longer for a federally operated database of reassigned phone numbers to become available.
Despite objections from a private sector company, an order released by the Federal Communications Commission last week said the regulator’s Consumer and Governmental Affairs Bureau (CGB) and the Wireline Competition Bureau (WCB) granted, in part, a request for an extension of time filed by the North American Numbering Council’s (NANC) Numbering Administration Oversight Working Group (NAOWG).
In December 2018, the FCC adopted rules that would establish a single, comprehensive database containing reassigned numbers information. The database will enable any caller to verify whether a number has been permanently disconnected before calling that number, “and it will help consumers avoid unwanted calls intended for others,” according to the FCC.
The FCC directed the NANC to present a technical requirements document (TRD) containing the NANC’s recommendations on certain technical aspects of database establishment, operation, and funding no later than June 13, Specifically, the FCC directed the NANC and its NAOWG to consider technical issues surrounding how the database administrator can collect fees from callers that use the database.
In a letter dated April 30, the NANC requested an extension of the deadline from June 14 of this year until April 13 of next year. On June 12, the bureaus granted the NANC an additional three months setting a new deadline of Sept. 13 to provide its reassigned numbers database recommendations to the FCC.
The FCC’s bureaus also required that the NANC provide a progress report by July 12 so that the commission could evaluate its progress toward the deadline.
Well, according to the latest FCC document, a letter dated July 11 said the NANC chair provided the FCC status report that indicated that the NAOWG was “making progress but that an additional extension would likely be needed to complete the NAOWG’s work.”
Then on Aug. 14, the NAOWG submitted a letter requesting an additional seven-month extension of the deadline to April 13, 2020 as mentioned in its earlier extension request.
“The NAOWG asserts that although it has continued to work diligently, additional time is necessary to complete its work on the database’s Technical Requirements Document and to make recommendations on the funding, pricing, and fee structure issues,” the latest FCC order said.
“In addition, the NAOWG claims that progress has been slow because of the complexity of the task, which has been made greater by a reluctance by vendors of similar databases to provide assistance out of fear of disqualification from bidding on the reassigned numbers database contract,” the document continued.
“In support of its request, the NAOWG argues that it has been diligently engaged in meeting the Commission’s deadline, conferencing for approximately four hours each week, and resolving details which, if left unresolved, would be deferred to another time,” the document also said.
The FCC explained what elements went into making its latest decision.
“In this instance, however, it is important that the commission receive a complete set of technical recommendations in order to establish an operational database efficiently,” officials said in the order. “At the same time, it is important that the Reassigned Numbers Database be launched as quickly as possible.
As a result, the FCC granted the NANC an additional four months, until Jan. 13, to complete its work on the Technical Requirements Document associated with the Reassigned Numbers Database and to present its recommendations to the commission.
“The additional time will ensure the development and consideration of a complete record on the complex technical aspects of the database’s establishment, operation and funding,” officials said. “The additional time is also necessary for the NAOWG’s, and in turn the NANC’s, development of fully informed recommendations and thus serves the public interest.
“To ensure that we can monitor the NANC’s progress and encourage timely completion, we condition the entirety of the extension on the NAOWG submitting an adequate work plan, including a detailed timeline by Sept. 30, showing how the NANC will complete its work by the specified dates,” they went on to say.
“We do not believe that a grant of the NAOWG’s requested seven months is warranted under the circumstances. In the NAOWG’s extension request, it notes that the NAOWG will likely complete the Technical Requirements Document by the end of year,” officials added. “We find, therefore, that the bureaus’ four-month extension allows sufficient time for the NAOWG to complete its work, seek agreement from the NANC, and present the Technical Requirements Document to the Commission by the Jan. 13 deadline we establish herein.
Meanwhile in the same order, the FCC also touched on a letter it received from Somos, Inc. that challenged the need for the NANC to receive any additional time to complete its work.
“Specifically, Somos argues, among other things, that the reassigned numbers database will not be difficult to set up, based on its experience with administration of toll-free numbers, and that the Commission could outsource the NAOWG’s remaining tasks to bidders,” FCC officials said. “We treat Somos’s filing as an opposition and note that it was untimely filed later than the 10-day deadline specified pursuant to … the commission’s rules.
“Even if we were to consider Somos’s opposition on the merits, however, we find it unpersuasive because we accept the NAOWG’s expert view that preparing the Technical Requirements Document poses significant complexities and that preparing a detailed TRD will benefit the procurement,” officials continued. “We believe that there are complexities to the Reassigned Numbers Database, as described in the NANC’s requests, that are different from a toll-free number database and that necessitate the NANC’s expertise and the additional time it seeks.
“Indeed, the NANC is the commission’s expert advisory body on these matters and we see nothing in Somos’ filing that would justify reversing the commission’s directive to consult the NANC on the relevant issues, or that persuades us that additional time is unnecessary,” officials went on to say. “Moreover, we are concerned that outsourcing the remaining tasks to bidders could negatively impact the procurement because doing so would require bidders to speculate on the matters the NANC has not addressed and make it extremely difficult for the commission to consistently compare bids.”
With the threat of security breaches haunting companies large and small, Recovery Database Network (RDN) is taking steps to ensure its systems connected with repossessions and recoveries are safe.
The division of KAR Auction Services announced it achieved the six components that go into Veracode Verified Team Status certification. Veracode Verified is a program that validates a company’s secure software development processes by testing for potential vulnerabilities and evaluating its software security.
The company explained this verification helps assure RDN customers across the repossession and disposition value chain of its commitment to securing their data.
“RDN is continuously making enhancements through data science and building on its digital suite of solutions,” RDN vice president Pradeep Mahdevu said in a news release. “Undergoing rigorous security testing, implementing strict development practices, and earning Veracode Verified certification ensures that our digital solutions meet a high standard of application security, reducing risk for our customers.”
Organizations like RDN that had their secure development practice validated, and their application accepted into the Team Tier, have demonstrated that the following security gates have been implemented into their software development practice:
• Assesses first-party code with static analysis
• Documents that the application does not allow Very High flaws in first-party code
• Provides developers with remediation guidance when new flaws are introduced
• Assesses open source components for security flaws
• Identifies a security champion within the development team to ensure secure coding practices are used across the development lifecycle.
• Provides training on secure coding best practices for the identified security champion.
“RDN is committed to delivering secure code to help organizations reduce the risk of a major security breach,” Veracode’s Asha May said. “Companies that invest in secure coding processes and follow our protocol for a mature application security program are able to deliver more confidence to customers who deploy their software.”
For more than 10 years, RDN highlighted that its software-as-a-service technology has helped finance companies with improved recovery performance and increased operational efficiency while providing full security and transparency.
Similarly, Clearplan’s digital platform provides recovery agents, drivers, forwarders and automotive lenders a centralized, mobile, cloud-based hub for repossession workflow and logistics management.
Together, Clearplan and RDN connect thousands of recovery agents and finance companies to a streamlined vehicle recovery process — with reduced redundancies and increased actionable data.
Signing bonuses aren’t just for professional athletes as Location Services is looking to add qualified repossession agents by using the same personnel strategy.
The provider of loss-mitigation outsource solutions for the financial services industry is hiring for repossession agents and offering a $1,000 signing bonus to support the growth of the organization. The company explained part of the signing bonus ($500) will be delivered upon successful completion of 90 days of employment with the remaining $500 upon successful completion of six months of employment.
Location Services indicated in a news release that these positions are nationwide, and benefits include:
— Health
— Dental
— Vision
— 401K
— Paid holidays
— Paid time off
“Location Services offers competitive compensation packages as well as training,” the company said. “Repossession agents play a vital role in the overall success of Location Services. These positions are responsible for the recovery and transportation of vehicles and there is regular interaction between outside business contacts, clients, other professional businesses and internal support teams daily.”
The company added other responsibilities of repossession agents include investigating and tracking known locations of assigned vehicles and securing them in accordance with local, state and federal laws.
Location Services mentioned that it has several positions available. Applicants can apply online at www.location-services.com/careers/.
One of the most frequent guests on the Auto Remarketing Podcast is back for another episode.
DRN’s Jeremiah Wheeler recapped his TED-style presentation during this summer’s Auto Intel Summit along with looking ahead to Used Car Week, which begins on Nov. 11 in Las Vegas.
The full discussion can be found below.
Download and subscribe to the Auto Remarketing Podcast on iTunes or on Google Play.
You can also listen to the latest episode in the window below.
Catch the latest episodes on the Auto Remarketing Podcast homepage and on our Soundcloud page.
As Intellaegis, which does business as masterQueue, gears up for a potential award-winning appearance at the Finovate Fall conference in New York this September, the company announced an executive adviser joined the team, bringing a diverse technology background.
Intellaegis’ newest executive adviser is Victor Kan, former president and chief executive officer of Fujitsi Computer Products of America, the U.S. division of the world’s seventh-largest IT services provider.
Intellaegis highlighted Kan is a tenured Silicon Valley veteran with more than 25 years of executive leadership in sales, marketing and product management.
Kan started his career at Fujitsu of America in 1999 as senior director of product and channel marketing, culminating in his promotion to president and CEO in 2012.
“While we’re honored to bring in a person with the track record Victor has, what’s even more exciting is his desire to get in the weeds at an entrepreneurial level and roll up his sleeves in a very modest, matter-of-fact manner that we believe will help our organization continue our upward growth pattern well beyond what we have projected for 2020,” Intellaegis founder and chief executive officer John Lewis said in a news release.
Kan explained why he decided to become an executive adviser to Intellaegis.
“After meeting with the co-founders of Intellaegis, John and Perla Lewis, I was captivated by the energy and passion they displayed in transforming their years of experience in skip tracing and debt collections into a thriving and cutting-edge software business,” Kan said.
“masterQueue is a unique product solving a real need, and I’m excited about the opportunities for the product in the marketplace and was ecstatic to accept their offer to join the company,” Kan continued.
The company’s offerings are impressing other industry leaders, too, as Intellaegis was named a finalist in two fintech award categories for the upcoming Finovate conference.
Intellaegis is also one of 75 fintech companies selected as a presenter to showcase the features that generated these nominations during the two days of demos of the newest fintech products at the event. The opportunity marks the second appearance for the company at this conference. Intellaegis also appeared at Finovate in 2011 when it launched masterQueue.
The masterQueue fintech platform is used to help financial institutions and their third-party vendors automate the process of contacting customers who have fallen out of touch
“This allows financial institutions and their customers an opportunity to re-establish broken communication to help resolve past due account issues before the situation becomes further delinquent and more serious,” the company said.
Intellaegis explained the features masterQueue built into its debt-collection platform can create efficiencies utilizing automated data processing power that can streamline a time-consuming manual process better known as skip tracing.
masterQueue can automates this process while at the same time simultaneously layering in the various regulatory and data privacy laws to ensure the multiple and complex state and federal compliance requirements needed for accessing and using consumer data in debt collections can be met, providing CCPA and FDCPA solutions for the debt collections industry.
These regulatory features were architected by a combined effort from a Fortune Top 100 financial institution and the team at masterQueue. This resulted in the two nominations at Finovate for Best FinTech Partnership and Best RegTech Solution.
For more information, contact masterQueue at [email protected] or (866) 563-7547.
The American Recovery Association (ARA) and the Harding Brooks Insurance Agency previously collaborated on a health-insurance program for members.
This week, the partnership evolved into another benefit for compliant members — preferred pricing for workers’ compensation.
“ARA is dedicated to ensuring our members can follow our high standards of safety and compliance,” ARA President Dave Kennedy said in a news release. “With the addition of preferred workers’ compensation pricing for ARA members, we are not only working to ensure the well-being of our members’ employees and families, but also helping protect their businesses from expensive lawsuits.”
ARA explained Harding Brooks will handle everything for member companies that use this new benefit. This coverage includes securing the best workers’ compensation package available by working directly with carriers to show the compliance of ARA members and negotiate lower rates.
The association added this preferred pricing is not a payroll program, and members who take advantage can continue using their own payroll system.
“It has been a pleasure to work with ARA in developing new and creative program strategies for their members and the industry as a whole,” said Mike Peplinski, vice president of Harding Brooks Insurance Agency.
“By leveraging ARA’s CCRS compliance and safety training program, we can significantly reduce the cost and burden of selecting a workers’ compensation plan for members,” Peplinski added.
To learn more about this offer as well as other ARA insurance programs including health care and life insurance, members should contact Peplinski at (315) 214-5822.
Coming off of what the president and chief executive officer described as a “transitional year,” Nicholas Financial opened its 2020 fiscal year with positive net income after finishing its 2019 fiscal year with a loss.
The publicly-traded specialty consumer finance company operating branch locations in both the Southeast and Midwest, recently announced its net income for the three months that ended June 30 came in at $0.6 million. Nicholas Financial generated that figure even though revenue decreased 11.3% to $16.6 million.
Still, the metrics are an improvement from the close of its 2019 fiscal year that included a net loss for the entire reporting period of $3.6 million.
“We are pleased to be able to report positive earnings in our first quarter,” Nicholas Financial president and CEO Doug Marohn said in a news release. “Although it is only one quarter, the results indicate that the strategy and tactics deployed during fiscal 2019 are starting to pay dividends in fiscal 2020.
“Our core operations were profitable independent of the Metrolina acquisition, and that acquisition definitely helped to increase our realized net earnings for the quarter,” Marohn continued.
Back at the end of April, Nicholas Financial announced that the company acquired substantially all of the assets of ML Credit Group, which does business as Metrolina Credit Co. and provides financing to consumers by direct loans and through purchases of retail installment sales contracts originated by dealers in North Carolina and South Carolina.
“We are very pleased to announce the company’s acquisition of Metrolina. Metrolina’s local focus in North Carolina and South Carolina nicely complements our existing automobile financing program,” Marohn said at the time of the acquisition.
“Having been the CEO of Metrolina Credit Company for four years from 2014 through 2017, I am very versed in their operations, personnel and culture. We are excited to be consolidating our two companies that are so well aligned in many aspects,” continued Marohn, who noted that the transaction brought scale to its existing operations in the Carolinas by adding more than 3,000 accounts and more than $22 million in net receivables.
Turning back to the Q1 results, Marohn emphasized the strategy changes Nicholas Financial has implemented. Marohn previously explained that the company returned to a 120-day charge off policy that includes Chapter 13 bankrupt accounts, “which is more in line with industry standard.” The company also trimmed its market footprint by closing branch locations in Texas and Virginia.
And the results?
“More importantly, our portfolio metrics continue to improve and will be the driving force behind future earnings,” Marohn said. “We continue to book loans with higher rate, increased discount, lesser advance and shortened term. Our return to disciplined underwriting has had a positive impact on our portfolio yield as our gross portfolio yield has increased to 28.3% compared to 25.3% in the prior year first quarter.
“The return to a 120-day charge-off policy along with adjustments to our servicing approach has resulted in improved performance, too,” he continued. “Our 30-day delinquency is down approximately 100 basis points with most of that coming from a reduction in the 60 days past due category.”
Furthermore, Nicholas Financial reported that it’s gaining traction beyond the paper its buying from its network of dealerships.
“We are also starting to see our direct loan product contributing to our top and bottom lines. Our direct loan portfolio has now grown to over $8 million and performs better than our indirect portfolio in terms of delinquency and losses,” Marohn said.
Currently Nicholas Financial offers direct loans in Florida, Georgia, North Carolina and Ohio, and the company is in the process of obtaining licenses in the remaining states where it operates.
“As of July, we obtained licensing in Tennessee, and we intend to initiate direct consumer lending there during the second quarter of fiscal 2020. Several other states are in the final stages of licensing and we intend to have all states licensed and operational this calendar year,” Marohn added.
