Hey Lenders, Cut Out the Middle Man and Save a Small Business

GUEST EDITORIAL

Lenders, it has been mentioned by some of you that you are turning to forwarders as a last-ditch effort to find an accredited repossessors. Before spending the extra money for lesser results, how about reaching out to the State Trade Associations, Eagle Group XX or one of the industry expert national trade associations, the AFA or ARA? We understand this is a frustrating time for many of you, just as it is with many small business owners in the asset recovery industry who are likewise experiencing hardships beyond measure. Better than the forwarders, the state trade associations, Eagle Group XX and the national trade associations, the AFA and ARA, have the ability to assist you in locating a professional, properly insured, and CFPB compliant recovery agency to handle your assignments and, without the forwarders added fee.

Take advantage of our services and use US!!

The truth is that if repossession agents were paid for what they do and not forced to work below cost, as the forwarding industry demands, or provide their services for free, qualified repossession agencies wouldn’t be closing their doors. Long-term, if your recoveries are only handled through the forwarders, you will not only pay astronomical fees, but will experience recovery rates in the 20%-30% range. Whereas, with assigning directly to the agency or through one of the associations (who do not charge a fee) you will see recovery rates of 50%-70%. Why would you pay more for lower performance, it just doesn’t make sense.

Those additional expenses that you pay to the forwarder are very likely to be looked on by the incoming CFPB administration and other regulatory authorities as predatory or deceptive in that they are quoting rates as high as $450-$475 as repossession fees when the actual repossession is only costing $275-$350. That’s called an Unfair, Abusive and Deceptive Business Practice (UDAAP.)

This is a slippery slope and is not a sustainable model. With the new administration, the broker, forwarder, middle-man model is going to be a tough sell when they come knocking on your door, and they will. D-Day is coming. We can all turn a blind eye, but the inevitable will need to be addressed. By using direct agents, you can bypass this stress.

The associations are the most experienced managers of repossessions in the industry and many have been at it their entire lives. The AFA and ARA have been managing lenders and clients since the 1930’s and 1960’s and evolved with it. Working directly with companies and associations who have proven consistently over the decades to be reliable, trustworthy, and professional is still the safest and most effective strategy that you can employ.

We are here to help you and the consumer. The less money the consumer has to come up with to reinstate their vehicle loan, without having to come with extra fees for the broker/forwarder/ middle-man’s fees, the better for the consumer and, the higher the number of reinstatements. You are not in the business of losing money and the only way to make money is to make loans work! Keeping the consumer in the vehicle is a “win-win.”

As a lender, you know that there is no worse feeling than being on the wrong side of a wrongful repossession. It creates a pit in your stomach when the tables are turned. Communication breakdowns are the usual culprit and, the more points of communication to go through, the more that can go wrong.

Remember direct contact is best. Wrongful repossessions cannot be corrected through an app. It’s human error. The process of going through several parties when an account is going on hold or closing, causes delay. The direct contact relationship reduces any delay dramatically.

Always remember, these are your accounts. You need to be in control of them and you need to know who represents you in the field. With the forwarding model you lose that control.

Save a small business and get better and safer results! Use an association or direct agent for your assignments!