Rebuttal: Consolidated Asset Recovery Systems Response to Punishment over Reporting Breaches Editorial

EDITORIAL REBUTTAL

Kevin,

Before I reply, I want to first thank you for the fine job you do. I find your site to be informative and insightful providing needed information on our industry and a platform for sharing opinions and observations.

Your article on Consolidated Asset recovery Systems is accurate but may leave some questions unanswered. I will address those later in this reply.

I have often considered writing a post on the relationships that exist between the forwarding companies and the repossession agencies. As a forwarding company we are thrown into the mix of service providers we compete with and though we are alike, in many ways we differ from others. Your survey on CUCollector looks to do just that.

Over the years we have established many mutually valued and symbiotic partnerships, with those that help us in providing an “industry best” recovery solution. And though the majority of our suppliers agree, I know that there are a handful of agency owners that feel differently. We operate with the best of intentions and work hard to provide a fair and mutually beneficial working relationship for each company for which we contract services. This is often a compromise that balances the need of our clients with the needs of our suppliers.

In the many articles and blogs I read I see the frustration and challenges felt from those in our industry yet most of the posts fail to deal with the root cause of why and what is causing the pressures we face. Some want to blame and identify the forwarder as the root cause for all of the issues. But the fact is we live in a world where the services offered are transitioning from a specialty market to a commodity priced service and Forwarding companies are not immune to this pressure to deliver on price. On its own this would be challenging but not impossible to address. However there is the additional issue of escalating cost related to fuel, insurance, salaries, facilities, and compliance expenses. Together these reduce margin lowering profits. Unfortunately some of us will not figure out how to adapt to today’s market and will not survive, while others will thrive. This adds to the frustration.

The challenge facing all of us is: knowing how to redefine our business to compete in a commodity market, to gain efficiencies offsetting cost and allowing services to be priced competitively. We are aligned with agents in that the majority of our contracts are at a fixed price so we too must manage cost and find efficient ways to conduct business.

Understanding, what is a cost of doing business vs. what is costing business, is paramount to increasing topline revenue and margins.

By example, we have reengineered our business more than once over the years to allow us to provide a superior competitive offering in the market and minimize erosion of our profits. This has impacted almost every aspect of our business at some point. We did this in response to changes in the market, competitive threats, and in response to our clients. This has allowed us to continue to grow and thrive. How many repossession agencies have had to do the same? I imagine the answer is most. But for those that desire for time to go backwards to how things were, they have lost an opportunity and precious time not spent evolving their business to compete in a changing market. For without this their business most likely will not survive. With that said I believe there is a silent majority than run strong profitable businesses that are adapting to market changes and pressures and are thriving quite well. We know we work with them every day and appreciate all that they do.

We are not perfect as mistakes are made when you are managing tens of thousands of repossessions every month, but we try hard to rectify them when they occur. In the past we have been guilty of not explaining well why we require changes in policy and our contracts or on how we quantify, distribute volume or even pay for services These changes are driven by an evolving market, regulations and customer Service Level Agreements (SLA’s), In the example of disciplinary actions listed above, it is an escalation based on continued failure to comply with our service level agreement, not our initial action to hold monies. As you acknowledged, we are fair and reasonable in the request we are making. But what is not stated is that we do not get paid by our clients when we do not meet the SLA requirements including collecting the repo fee, key fee, or transport fee. WHY? Because the compliance risk is that great to our clients and can create exposure in the hundreds of thousands or even millions of dollars. And let’s be honest these are not unrealistic requests, just good business practices. Things we should be doing anyway. As to the question of how often it happens, it is infrequent but compliance is measured on a different scale. One occurrence can be impactful and initiate legal consequences so the threshold for tolerance is low. I can also state that there are many times when we pay our agents even when we are not paid because we value the relationships we have and circumstances indicate the agent worked to the best of their ability to meet the client’s needs.

The communication we distributed is one of several changes we are making to update and share not just our service level requirements but market changes. A few months ago I also hosted a webinar to share some of the market indicators we are seeing in addition to future policy changes that may occur as a result. Our business is not static and we will see changes in the future in response to the market. We will continue to do our best to share this with our suppliers and balance their needs with those of our clients.

In closing, I believe there are opportunities for Forwarding companies and repossession agencies to work closer together to build better methods for asset repossessions and help build efficiencies. Rather than fight this idea we should embrace it. Because I do not see a future without repossession agents nor do I see one without Forwarding companies. Our reliance on each other is truly symbiotic

I welcome the opportunity to collaborate with, and desire to see all our current and future suppliers be successful with us.

Terry Groves

Consolidated Asset Recovery Systems