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What Is An Acceptable Level Of Charge-Offs
08-24-06
RTO Online - The rent to own industry's trade website
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What Is An Acceptable Level Of Charge-Offs
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By Fidelity National Credit Services, Ltd.

I encourage RTO companies to reconsider "acceptable loss." Is a cabinet with 3-drawers of charge-offs for the past 3-5 years all acceptable loss?
Dan Jobrack, Business Development Director for Fidelity National Credit Services, Ltd.

FNCS has a dedicated Rent to Own (RTO) and Payday Advance (PDA) recovery operation. Contact Dan Jobrack, National Director of Business Development at (209) 957-8361 or 1-800-648-9341.

An amazing reality in the RTO world is often found in loss complacency. A customer choosing to return merchandise with unpaid rent has always been a measured business risk. As any owner, president or CFO will attest when operating a Rent-to-Own store or chain of stores there is an acceptable amount of loss that is expected.

But what is considered an acceptable amount? Who established this standard? Did we wake up one day and say “I am going into the RTO business and am okay with the concept of loosing $50,000 a month for each of my stores in merchandise related or deficiency paper loss?” Dan Jobrack, Business Development Director for Fidelity National Credit Services, Ltd. (FNCS), a 3rd party collection agency that employs RTO collection specialists believes that nobody needs to lose money to make money.

"Our average RTO customer reports losses of $50-75,000 a month in charged off items from either a combination of merchandise not being returned and accrued back rent on agreements gone bad, or cases of deficiency when an item is returned but the delinquent rent never recovered,” says Gene Sacco, Executive Director for FNCS. "This is a sad reality that has developed over many years due to a perceived level of acceptable loss.”

Many agencies employ collection specialists who build a desk of accounts from countless venues and work them all on a commission basis. The deceptive part about collecting for commissions is a specialist who may choose to collect the larger more attractive accounts to earn their commission first and then approach the other accounts as potential extra. What makes FNCS so unique is their departmentalizing of industry specific accounts. “When you place an RTO account with FNCS, the placement is given to an RTO collection specialist” Jobrack reports. “This allows for an individual who understands the paper, the client type and the tricks of the collection trade to best approach the delinquency and recover your losses” Jobrak said.

FNCS encourages RTO companies to reconsider "acceptable loss." Is a cabinet with 3-drawers of charge-offs for the past 3-5 years all acceptable loss? Could you perhaps have 2 or 3 more new stores with what has been boxed away as “uncollectible?” Jobrack states, "Teh most attractive part of FNCS' services is, if we don’t collect, you don't pay. How can you miss?"

Cotact:
Dan Jobrack
National Director, Business Development Fidelity National Credit Services, Ltd. (FNCS)
(209) 957-8361
djobrack@fidelitynationalcredit.com 




 

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