The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A leading debt collection agency experienced a 30-40 per cent business increase in 2013, with its principal expressing concern over the “integrity and experience” of newly-established rivals.

Rory Higgs, head of Apex Management Services, told Tribune Business that newcomers were attempting to “get over the learning curve” too quickly, adding that “politics and patronage” were facilitating their market entry.

He added that many attorneys, given that litigation was often involved, saw themselves as debt collectors and were trying to “get into the ball game” without possessing the full range of skills and technology required.

But, despite his concerns, Mr Higgs said Apex had enjoyed a “tremendous increase” in business year-over-year, attracting not only Bahamas-based clients but foreign companies seeking to collect on unpaid merchandise previously shipped to local businesses.

“We’ve had a tremendous increase,” he told Tribune Business of Apex’s business volumes. “Not only have we had clients, prospects calling us from the Bahamas, but companies outside the Bahamas seeking to be paid for merchandise sent to certain suppliers and businesses here.

“They’re now coming to us to assist with that. We’ve seen a tremendous amount of business coming, particularly from one or two of the commercial banks we do work for. I would say the real increase has been in 2012 leading into 2013, at least a 30-40 per cent increase.”

The rapid growth in Apex’s workload is not surprising, given the continuing struggles of the private sector and business community to recover from the 2008-2009 recession and its aftermath. Many are still defaulting, or have started to default, on their obligations.

“A lot of companies are starting to organise themselves to get their portfolios in shape for collection,” Mr Higgs said. “There is a lag time. I have had a number of approaches from clients who’ve said they want us to do work for them, but it’s taking time to put this together.”

The Apex Management principal, though, expressed concern that the obvious, and increased, demand for debt collection services had attracted several inexperienced operators into the industry.

“With an obvious eye on an opportunity to capitalise on the existing situation, a number of overnight debt collection vendors are beginning to surface without any experience or capacity to perform at a level that would be required,” Mr Higgs said.

“It would be a shame if we as a country succumb to the temptation to award debt collection contracts based on patronage rather than on merit, at such a time when our country’s well-being is at stake.”

That last statement may be a reference to the Government’s plans to outsource collection of its $557 million in unpaid real property tax bills to private collection agencies.

Still, in an interview with Tribune Business, Mr Higgs made it clear that his primary goal was to maintain the profession’s integrity. “My concern is integrity and experience,” he said of the increasing number of new agencies springing up.

“These entities don’t have that expertise. I know how difficult it was for me when I got started, and the learning curve they have to get over, they can’t do so in a short space of time. There’s three or four of them that I’ve seen recently, and they’re trying to put themselves over as viable entities.

“Politics comes into play a lot of times, and there’s a lot of patronage that I’ve seen. I am concerned about it.”

Possessing more than 30 years’ experience in credit and collections himself, and with Apex having been in business for 15 years, Mr Higgs added that he was a fellow and member of the Association of Credit and Collection Professionals (ACA International).

He also told Tribune Business that many Bahamian attorneys now viewed themselves as debt collectors, given their legal expertise in obtaining default court judgments against delinquent payers.

However, Mr Higgs said attorneys lacked many skills required in debt collection, including the ability to enforce and chase down those they obtained judgments against. Professional debt collectors, he added, possessed call centres able to handle thousands of calls daily, along with specialist collection management and legal case management software.

“I see a lot of attorneys trying to get into the ball game, and they’re not debt collection agencies,” Mr Higgs told Tribune Business. “Because an important part of the process is litigation, they feel because they have that aspect down pat, they’ve got the quantum of skills required.”

He added that on several occasions, clients had passed debt collection accounts to Apex after first hiring attorneys to go to court and get a judgment against the debtor. These judgments had never been enforced, and Mr Higgs said there were “far too many cases” where this occurred.

Mr Higgs said in-house company attorneys would be unable to dedicate 100 per cent of their time to debt collection, given their other responsibilities, and also have to attend court outside work hours.

He added that external attorneys were also unable to devote the time and care required to accounts, and often billed clients for their services while leaving the latter to collect on the judgment obtained.