March/April 2005

Commercial Collections

Sherlock Holmes Meets the Collector

By Scott H. Cytron, ABC


You would probably have to conduct an extensive study to find out the answer to that question. However, Jim Bessenbacher Jr., immediate past president of the International Association of Commercial Collectors (IACC), offered his views on what it takes to work in the commercial collection space (see sidebar), and the reigning qualities include dedication, resolve and patience.

Based on the agency featured in this month’s Collection Advisor, these three attributes certainly come shining through, but I want to add one more to the mix: integrity. Without a doubt, it is evident when researching agencies that specialize in commercial collections that owners view their businesses as highly ethical, and attempt to weave the integrity quotient into their companies.

Sherlock Holmes Meets the Collector

It’s almost like a chapter out of one of Sir Arthur Conan Doyle’s famed mysteries of yesteryear—yet with a sublimely modern aspect to it.

Johnson, Morgan & White (JM&W;,, a commercial collections agency in Boca Raton, Fla., has 27 employees, 11 of which are collectors. Headed by Robert Cooper, president, and Paul Eisenberg, chief operating officer, the agency uses what it calls a “forensic” approach to collections. In addition to being members of the IACC, management as well as all JM&W;’s collectors, have attained the designation of IACC Certified Commercial Collector. The principals and all collectors also are members of the Association of Certified Fraud Examiners (ACFE) and hold the CFE designation. Paul also is a CPA.

“Even though we are a commercial agency, we also are a forensic agency with advanced technology to help hunt down debtors and create positive solutions for our clients,” says Robert. “When you’re dealing in sophisticated corporate collections and debt recovery, we run across a tremendous amount of commercial credit fraud. Unfortunately, that’s the nature of our business.”

Although JM&W; uses DebtNet’s technology for collections, along with skip tracing services like Accurint and LexisNexis, the technology he refers to is more in line with investigative techniques endorsed by the ACFE. With uncovering “fraud” as one of the lynch-pins to improving client receivables, Robert believes we live in a “polluted corporate world” with “credit criminals.”

“There are plenty of them running across the United States,” he says. “Our job is not only to identify them, but get them to pay a substantial debt. While we don’t have the power to put them in jail unless we refer them to an authority, our investigative and forensic techniques in the corporate collection arena definitely help expose the debtor’s fraudulent deception.

Robert is an ex-principal and founder of Adams, Cooper & Marks, an agency he started in 1991 and later sold to I.C. System. An investment banker on Wall Street, he had always been intrigued by collections. In the early ‘90s when there were a tremendous number of corporate bankruptcies and corporate debt, Robert was front and center with his knowledge of “money.”

“Collections and Wall Street are a world apart form one another, but in some sense, they really aren’t that different,” he says. “Companies go to Wall Street to expand, while clients turn to commercial collection agencies to collect money they later use to grow.”

Today, with satellite offices in New York City and the United Kingdom, JM&W; represents a wide range of clients, including numerous Fortune 100 companies. JM&W; has enjoyed long-term relationships with many of its clients—an attribute Robert is especially proud to report.

“Many agencies act like a gas station—you fill your car up with gas and leave,” he says. “We don’t like that approach. You can have a lot of clients, but the key is to have long-term relationships. We offer very personalized service, and constantly give our clients the best service we can.”

Robert also believes he is a very involved CEO with hands-on management, handling the day-to-day aspects of the business, including ongoing cases forwarded out for litigation, and supervision of all collectors and sales executives. “I don’t sit in a room and play solitaire; I see what’s going on and work with all collectors one on one. One of our strong points is to always improve and build upon our collectors’ strengths and weaknesses, especially in learning technologies and new aspects of the industry.”

In the collections profession, Robert believes employees are motivated by fear, reward and attitude. In the case of his own agency, he says that management uses attitude motivation as the primary factor. It’s not unusual, for example, to have collectors talk after hours or on the weekends with debtors from their homes; some even think of their homes as “second offices,” especially with differences in time zones across the country.

“Some are motivated with dollars, but it’s not only about the money. We never use fear. Our organization is based on attitude, and when someone does something right, the whole firm knows about it.”

IACC Convention Brings

Top Commercial Collectors to the Table

Collection Advisor caught up with a veritable “commercial collectors brain trust” in beautiful South Beach, Fla., for the International Association of Commercial Collectors (IACC) annual convention, Jan. 21-23.

During the meeting, experts discussed the advantages of commercial collections and the limitations placed by certain states. Everyone agreed that Arizona was the most restrictive state to collect in from out of state, followed by Alaska and Hawaii. Arizona requires a license and an office, while Massachusetts permits a phone and fax line within the state to conduct commercial collections.

Remey Rubin, president of Bonded Collection Corporation in Chicago, Ill., commented that the “ACA will get you licensed in all 50 states.” Being 50-state compliant, which costs about $35,000 to maintain, was considered a major advantage for working with national accounts, but because of the cost, most of the industry has not obtained this level of service.

Tom Hagg, president of State Collection Service in Madison, Wis., an agency handling consumer and commercial collections, says, “It’s a great business and very misunderstood. You create a win/win by helping someone solve their debt problem and keep cash moving for your client company.” He described the biggest change in the business. “This was a pencil and paper with scribbled notes; today, it’s high tech. You have to embrace technology. We invest first in people, then in technology. Today, there isn’t anyone who can’t be found, as long as there is enough money.

“More people are using unattended messaging to find their balance and make payments,” he adds. “Technology that enhances people makes us more efficient. Still, one of our greatest challenges is pricing. I hesitate to talk about it because something only based on price doesn’t work when buying a service.”

Hagg noted another trend. “We get involved much earlier. We will work in the customer’s name running the collection function.” He also noted that voice recording technology “has been helpful for training.”

Later, at a roundtable discussion on a patio under palm trees, with the beach within sight (eat your hearts out), IACC officers President David Ward (newly elected during the conference), Past President Jim Bessenbacher Jr. and Vice President Paul Eisenberg (who is featured in this month’s feature story), explained how they each got into the business. David followed the question of, “Who grows up wanting to be a bill collector?” by describing his days as a young VP who was offered an interim job in commercial collections. “I saw the potential in ’81 and started Delta (Recovery Systems—his own firm in Long Valley, N.J.) in 1983.

Eisenberg began his professional life with a national stock brokerage, DLJ, soon gained the CPA designation and went to work at Adams, Coopers & Marks. Bessenbacher graduated college and was looking for a job when his father drafted him into the firm his grandfather founded in 1938 (that was in 1980 when his father told him he would have to start paying rent just to sleep at home).

Forced to go to work, he hated it, but now says, “I wouldn’t do anything else. A bill collector pays a significant role. It’s also one that saves the American family $350 a year,” says Bessenbacher. Regarding bad debts that are written off, he says, “It’s a restoration process with debtors, that later can become clients.” However, Eisenberg adds, “Debtors by design are not going to be solved.” The restored debtors “can see how you handle them as a debtor and use you to collect their accounts,” says Ward.

The major challenges facing the profession were explained by Eisenberg, who says, “Getting clients to turn over debt earlier, which is more exaggerated in these times. The challenge is to not let technology get in the way of selling the debtor on paying your client. We are selling them the idea that paying the debt is the best thing for them to do.”

Asked to get specific on technology advances, Bessenbacher said, “Accurint,” Eisenberg said, “,” and Ward said, “The Internet.”

The IACC is now certifying commercial agencies; Ward and Bessenbacher are two of the first six to obtain certification. It can take about a year to get certified, and Eisenberg’s firm is next in line. Bessenbacher stated that, “Certification is the future.”

Eisenberg agreed. “We have learned with this economy how to become more efficient, which will help when the economy returns.” Ward chimed in and said, “Without the IACC or the Commercial Law League, the creditor is rolling the dice because he has no assurance he will receive money.”

By Scott H. Cytron, ABC, Executive Editor and T. Allen Rose, CPA, Editor/Publisher of Collection Advisor