How was your weekend?

When building a relationship with another person at a company you do business with, the temptation or opportunity to move that relationship beyond a business relationship can occur. It can be initiated mutually, or by one side when there is something that side perceives they will gain. Schmoozing is what best describes this form of communication. The definition of Schmooze is:

Main Entry: Schmooze
Function: verb
Inflected Form(s): schmoozed or shmoozed; schmooz·ing or shmooz·ing
Etymology: Yiddish shmuesn, from schmues talk, from Hebrew shĕmu'ōth news, rumor
Date: 1884

intransitive verb : to converse informally : chat; also : to chat in a friendly and persuasive manner especially so as to gain favor, business, or connections transitive verb : to engage in schmoozing with

— schmooz·er \ˈshmü-zər\ noun

A solid business relationship is built when each side has an equal amount to gain from the relationship, and when one side gains an advantage, problems start, and the relationship will usually falter.

At a high level, executives get to know each other outside work all the time. Many companies frown on this, and while I agree with the initial perception of a conflict of interest, I can attest that some of the strongest and most valuable business relationships I've formed have been when both companies provided equal value to each other, and when the executive level staff spent enough time together so they built a trust of each other, knowing when a problem occurred, they each could fall back on the relationship they'd built to move past the issues, getting the business relationship back on track. If a catastrophic problem happened, the business relationship may be fractured, but the business bond these individuals had formed would usually transcend the companies they owned or worked for, and their paths would again cross as a result of the individual bond they'd built. The other component to this relationship is talent, allowing a bond to form by two peers with common interests and solid values, and their ability to solve issues and always strive to move their organizations forward without compromising their integrity.

At a staffing level, the playing field is similar, yet the need to communicate more frequently and the inexperience of the staff members in situations like these can make the situations that may arise a bit trickier.

How much small talk is too much? What do you do when the relationship moves from purely business and an innocent comment like "how was your weekend?" to "will you be my Facebook friend?", or "we should get together sometime."

As an employer, those last two scenarios can be seen as harmless by some, but in many cases they can be the beginning of the end for what the Executives thought was a solid business relationship. If my employee becomes friends with your employee will that influence their business decisions? If they're sleeping together and then one pulls the plug, will that affect my business relationship I've built on a high level with a client who sees value in our product or services? Is one of those people capable of having a hidden agenda that could really cause problems?

In thirty plus years of working in offices, I've learned some lessons the hard way, and my philosophy nowadays is to keep my business and personal life as separate as possible. I encourage our employees to do the same. I love hearing my people did a great job, and I know when you do enough great jobs you'll start getting closer to a client, or vice versa, as it will influence the amount of work that flows between two companies. I'd always prefer to be judged on what I do, and not on what I said I could do, or in a way which could be perceived as a conflict of interest in a manner which could affect my relationship with my employer, my client, or my company.

So, what do you do when a relationship that was friendly starts getting too friendly?

Find easy ways to identify these situations and without offending the other person, drop hints that hopefully they will understand over time:

1. Find things to say when the conversation goes in the wrong direction, i.e.

A) "I've got a call coming in on the other line, can I get back to you?"

B) "Can you hang on a minute?"

Place hand over mouthpiece on phone and say
"Just a minute"

Remove hand and say:
"Sorry about that, can I give you a call back later, I've gotta run.."

C) If my wife heard you talking like that I'm not sure who would be in more trouble, you or me.

OK, just kidding about the last one, but you get the idea. Find ways to catch the tone going the wrong direction early and find a way to move on. Don't avoid the person, keep consistent with your desire to be friendly and occasionally chat on an impersonal level, but at all costs, avoid getting into your personal lives other than you have a great family or you are happily single or whatever. I tell my people to stay away from the details or the next thing you know you will be sitting in someone's office listening to something you don't want other people to hear as the conflict of interest or the content of your conversation will clearly indicate this got way beyond the point of "how was your weekend?". That can cause more problems than you want to deal with at your job, and how would you feel if the other person got fired and you initiated the conversation, or you played along.

Business is business, and your ability to develop a reputation for delivering a product or service will take you places in your career. If you can do that while having a little personality, being a nice person with good morals, you will succeed in business. By not crossing the business to personal line, you will be ahead of the game. When it happens and you didn't initiate it, be prepared to control the situation with the fine art of bringing it back to business when it crosses the line. This is a trait you want in your tool box and it will help carry you a long way in your road to personal success in your business career.

Direct Repossession vs Forwarding - Price vs Cost

Repossession Forwarding – Price vs Cost

Newspapers and TV crews love to tell stories about Repo Men, but the stories I’m seeing lately seem to be more about the Forwarding Industry than the Repossession Industry.

FROM USA TODAY 2/29/2009

Violence up between Repo Men, Car Owners

HALSELL, Ala. (AP) — Alone in his mobile home off a winding dirt road, Jimmy Tanks heard a commotion at 2:30 a.m. just outside his bedroom window: Somebody was messing with his car. The 67-year-old railroad retiree grabbed a gun, walked out the back door and confronted not a thief but a repo man and two helpers trying to tow off the Chrysler Sebring. Shots were fired, and Tanks wound up dead, a bullet in his chest.

The man who came to repossess the car, Kenneth Alvin Smith, is awaiting trial on a murder charge in a state considered a Wild West territory even by the standards of an industry that's largely unregulated nationally. Since Tanks' death last June, two other repo men from the same company Smith worked for were shot, one fatally.

Smith worked out of Birmingham with XXXXXXX Recovery (Repo agency) , a subsidiary of the Chicago-based XXXXXX Services (Forwarding Company). The same recovery firm employed a repo man who was shot and killed on Jan. 8 in Birmingham, as well as a third worker who was wounded while towing a vehicle in the city on Feb. 10.

I removed the name of the Repo Company and the Forwarding Company that hired them because my point is not to bad mouth a specific company, but to make a point about the state of the Forwarding Industry.

Before I do that, let me give you a little bit of history. I know a little bit about the “Forwarding Industry”. I started a company in 1994 called American Recovery Services, or ARS, as it’s known in the industry. It was one of, if not the first large volume Forwarding Companies, handling upwards of 50,000 assignments for repossession a year in the mid to late 90s.

We started it by accident. We had formed one of the first Skip Tracing companies that exclusively serviced the auto finance industry in 1988; Skipbusters. By the early 90s, we had several hundred Repossession Companies across the United States under contract to repossess the cars we located on the skip accounts we worked for large financial institutions.

One of our clients was VW Credit, and ironically, I had been one of the first VW Credit employees back in the early 80s when they first started financing cars in the US. VW had hired Chrysler Credit to manage the finance and collection process, and I was a Chrysler employee. By 1994, VW had split from Chrysler and they had gone out on their own, and I had done the same.
I’d landed VW as a client at the first repossession company I had started in 1990 with my wife and a business partner; Crown Recovery Services in L.A. By early 94, we’d sold our half of Crown and we’d started River City Auto Recovery at several locations in Northern California. We were doing all of VW’s repossessions in Northern California, and we were also were handling several hundred skips a month through Skipbusters.

While visiting VW’s HQ they asked us if we would be interested in managing their repossession process through our nationwide network. We did some research and formed ARS within a few weeks. We never called it “Forwarding”, in fact, we never even gave it a name other than ARS. By the late 90s, all the national auction houses had jumped in and started similar companies, and even Manheim got back into the business with their acquisition of ADT in 2000, even though in 1994 when I first started researching the formation of ARS, they told me they tried it a few years earlier on a small scale and almost immediately got out because it was just too difficult a business to manage. Interestingly, I heard last week they were recently sold to XXXX Forwarding company, probably a smart move on Manheim’s account, if they got a good price and didn’t have to guarantee revenue. It’s tough to run a successful Repossession company, and running a successful Forwarding company is even more challenging, in my opinion.

So yes, I know a little bit about the Forwarding Industry, and what I’ve seen recently is not something I’m proud of when my name is mentioned as a pioneer of this industry.

Here’s another recent, similar story:

From NBC Augusta, GA. 4/13/2009

Repo Man wanted for murder of Augusta Man

MARTINEZ, Ga. - A vehicle repossession turned deadly. The man called his lender to have his vehicle voluntarily repossessed. "As the reposessor was attempting to leave with the truck, he was causing damage to Mr. Jacob's vehicle, it was a van," said Captain Steve Morris with the Columbia County Sheriff’s Office.

"When the truck came forward, he hit me. I was able to push off and get out of the way," said the man. His friend of 20 years, William Jacobs, wasn't as lucky.

"They went diagonally across my front yard and I saw Bill falling and I saw the guy turn and he ran over him...and he never slowed down," said the man. Jacobs was taken to the hospital, where he died.

Now the couple who hit and killed him is on the run and wanted for murder.

Columbia County investigators are working with the repo company, (XXXXXX Forwarding Company) and XXXX (Tow Company) to help find XXXXX and XXXXXXX.

And here is another one…

Tow Truck Driver Arrested, Charged With Hit And Run

By RNW Staff Writer Hayden Jennings • on June 15, 2009 (Rome, GA.)

Police arrested a local tow truck driver for felony hit and run after he ran allegedly ran over a woman in what police are calling a car repo gone wrong. Residents began giving the driver problems after he failed to produce any paperwork dictating the repo. As the situation continued to escalate, the driver reportedly brandished a hand gun and jumped into the wrecker. At that time the victim, Tina Ferguson, 41, of the same address, walked in front of the wrecker and was struck by the front bumper. The collision sent Ferguson into a barrel roll beside the truck before she rolled under it and was struck by the rear wheels as the wrecker left the scene.

The common denominator is the unprofessional and downright criminal actions of the repossession agents in question. The other common denominator is the fact that most, if not all of these accounts were assigned by the finance company to a company they trusted to handle the management of the repossession process for them, i.e. Forwarding.

In 1994, I believed Forwarding was a good idea, and even today, it still makes sense for some clients who struggle with the repossession management process. The problem is that like everything else, costs of doing business have gone up, and as a result, many forwarding companies are lowering the rates they are willing to pay the repo agent in the field to make sure they can make their needed, or desired margins. I’ve heard some repo companies offering their prospective agents $225 or $250 a repossession, and half that on a voluntary, which very well may be why there are two towing companies mentioned in the stories above.

If you wanted to get Lasix surgery on your eyes, would you hire someone who doesn’t use the best equipment, isn’t licensed, or doesn’t have a successful track record with solid references? Repossessing a car isn’t performing surgery on someone’s eyes, but if I own a finance company and I know what I have learned in the nearly thirty years I’ve spent in this industry, I’m not hiring a tow truck driver to pick up a voluntary just because he will do it for less than a qualified repossessor. I’m also not hiring the cheapest repo guy in town unless I’ve made damn sure he is also the best in town, and those two denominators do not usually mix.

I believe Forwarding companies hire these second class repo and tow jockeys because the deal they cut with the finance company is based more on price than it is on results. They also do this because the finance company doesn’t hold them accountable unless a serious problem arises, and the finance company doesn’t perform the due diligence they should be doing before they give them their first assignment. If they did, many of these Forwarding companies wouldn’t pass the test, and then the one’s who do Forwarding would only be able to perform the services at a certain rate, because otherwise they would go out of business as it’s not inexpensive to properly run a legitimate Forwarding business, Skip Tracing Agency, or Repossession Agency for that matter. The Finance Company would also make sure they knew exactly who the repossession company was contracting with, and instead of not wanting to know, they would demand to know not only who their approved agents are, they would audit them and ask to see the contracts, their insurance policies and the endorsements naking the Forwarding company, and they would perform an acid test on their Forwarding companies policies, procedures and practices to insure that an assignment to a sub-standard repossession agency, or an unlicensed or unqualified tow company would never happen on one of their assignments.

Since I started in this industry in 1982, most clients I’ve known have been focused on getting their repossessions performed for a lower price. I was trained this way at Chrysler. Once I started my first repossession company, I started to see the other side of the picture. Through the years, I’ve built relationships with a few forward thinking clients who have allowed us to charge a fair fee that could be evaluated and renegotiated as we delivered or exceeded their desired results. As I’m building Find John Doe, I’m trying to work with clients who think this way, and I applaud the vendors we do work with who hold their companies to the same core business values. If a client asks us to perform a skip locate for less than our normal rate, I tell them that I just can’t do it as I’ve built an organization that produces results, and we have a level of expected results we have to meet or we would go out of business. Lowering our revenue by even a few dollars makes it that much harder to meet our expectations, and our employees expectations. We work from a results-driven fee basis. If we don’t find people and get the collateral recovered, we make no money. This means I have to build an organization that finds people, or at least enough people to make up for the one’s I don’t find.

Many repo agents say contingency is bad, and while I agree to some degree, it is the way our industry has been built. It will take a long time and some forward thinking clients to make a change. I believe if the repossession fee is high enough to cover the accounts that are not repossessed, and if there is a secondary fee that can be generated for the agent who gets out of his truck and generates a positive resolution, and most importantly, if the repossession company gets a positive resolution on a majority of the accounts they receive, they can make a profit. If they spread themselves too thin and try and cover too large a service area, the chances of making a profit are reduced. If they take on more work than they can handle, the chances of making a profit and building lasting client relationships are reduced. Based on my experience, I’m confident that if the agents we contract with can track their results and build relationships with our company based on results and trust, they can grow a solid business.

The only problem with this is there are times when our industry makes no sense, and then it’s almost as if we have to start all over again in trying to legitimize what we do. A typical example of this is when a client assigns an account for repossession and lets say the balance is $20K. If the agent repossesses the car, the client pays them between $325 and $395 on average, and then the car goes to auction and they lose around $10K. If the repo agent makes contact and as a result the customer pays the account current, avoiding a repossession and a potential $10K loss, the client doesn’t pay the agent more money, they usually pay them considerably less, and in some cases they pay them nothing.

As I approach my fiftieth birthday and the twilight years of my career in this industry, it would be nice if I could have a hand in helping clients see the benefits of building relationships with their vendors that are results based, with fair fees paid to the vendors that are justified by a solid ROI for the client, and for the vendor.

In another example, I had an agent tell me the other day that they had a client giving them about 100 accounts a month for the past several years and they were charging somewhere in the range of $350. They tracked their stats and were getting close to 90% of the accounts either repossessed, or the people would pay from the direct contact they were making in the field and they charged them a $150 cure fee. The agent said they were considering asking the finance company for a 5-10% raise because the cost of fuel, state of the art technology, health and unemployment insurance increases and now that their staff was more experienced, their staffing costs had gone up and as a result of these expenses, their profits had been reduced to barely above a break even at $325 a repo, even when they got 90% closed or recovered. The agent called and asked for my opinion and I suggested they open their books and show the client how their margins had been cut, but their performance had been consistent and even if they couldn’t raise their fees enough in one year to make up the difference, maybe they could get a 5% raise, and an extra 5% if they increased their positive resolution to 92% from 90%.

I didn’t hear back from the agent and about a month later I put in a call to follow up. Unfortunately, what I heard was not surprising. Before they made that call they got a call from the new collection supervisor who said they would have to reduce their price to $325 or they wouldn’t receive any more business as they were going with a national forwarding company who was charging $325 a repo.

This is a typical example of a story I hear many times over. If the Forwarder is charging $325, then what are they paying the repo company and what is the quality of the repossessor they’re getting for $225 or $250 - see above stories for the correct answer. How much will the lawsuits in the above stories cost the finance companies? I guarantee it will be seven figures, plus the intangible bad press every finance company seems to be most scared of.

In this example, if the forwarder still got them a 90% recovery rate on an annual basis, they would be saving $25 per repossession, or a total of $27,000 for the year. I’ll bet the average charge off this finance company pays for every full balance skip charge off is about $15,000. So, if the Forwarding company got them a 70% recovery rate, which is a high rate for a typical forwarding company, that would be 20 less repossessions a month, or 240 less a year. At $15,000 per charge off, that’s a loss of about three and a half million dollars a year.

As I’ve said, using a company to help you manage the repossession process can be a benefit, but make sure you hold them accountable. If you have a repossession agent that’s getting you 80% or higher and they meet your other requirements, use the forwarder in the areas where your percentages are less, or in remote areas, and keep the company who has earned your trust and find a way to incentivize them to get an even higher percentage and pay them what they’re worth.

“Is it Price you’re concerned about, or is it cost?” One of the most famous sales consultants of our time, Zig Ziglar, wrote the gospel to this question, and ultimately it’s answer. If you haven’t heard him speak on this topic, please take the time to Google his name and listen to one of his podcasts, which are available on line for free. It certainly can be applied to the Repossession and the Forwarding industries.

Skip Tracing Preparation

Skip Tracing File Review Worksheet

The purpose of this worksheet is to show you how to prepare yourself to work a skip file.

Working a queue of files means you have to know how to get in and out of files in a hurry. You need to be quick, yet thorough, in your review of an account before you work it. This step should take no more than 5 minutes, and many times the last minute or so is done when you’re dialing the collector who gave you the assignment, and then when you are waiting for them on hold, you are looking at the last things to review. The skip tracers who multi task this way have proven to be the most effective I’ve come across.

These are the things you want to review BEFORE you make a call on a new file:

1. Client
2. R/O and COX names
3. Collateral
4. Address
5. Delinquency
6. Credit Application and Contract
7. Collection notes
8. Client contact



1. Client- who is the client. Clients operate differently, so first see who the client is and then make sure you understand how they want their accounts worked.

2. Names - Look at the name of the R/O. Is it an easy name to pronounce, do they have a nick name, an American name if they are foreign? These are things you want to determine as its much easier if you know what name your subject goes by. If someone is looking for me and they ask for Johnathon Lewis, everyone they come in contact with will be suspicious. If the subject you are looking for is named Scott Reid and he goes by Scooter, you need to find that out- so when you start working the file- ask people you come in contact with, whom you feel you have their confidence and they will tell you….“Does he have a nick name or does he go by Scott?”

3. Collateral –its important to know what you are looking for. Many clients now don’t include the color of the collateral, the license plate, and some times its difficult to know what the collateral is. The other day we had an agent running an address looking for what they thought was a Honda Jet Ski. The way we received the deal, it had a code for the type of collateral and it was a motorcycle we were looking for. We told them their update said they were looking for the wrong type of collateral, and we got the bike the next night. Go to Google and look up the unit so you can see what it looks like. When you’re calling a neighbor or asking a relative if he drives a little white car, that’s better than asking of they drive a Ford Escort. When you call the client, use that opportunity to ask them if they have a plate or a color.

4. Address – compare the address from the client to what is in the public records you have access to. If a new address pops up in public records, ask them if they had that address, and if not, tell them you’ll confirm it and let them know if its worth giving to a repo agent to run. Clients have a tendency to see a new address pop up in Public or Credit records and they just assign it for repo without verifying the address. We are professionals, and were expected to verify an address as much as possible before assigning for repo, and every assignment needs to have the reason why its being assigned to that address, which you cant do without some form of verification.

5. Delinquency- Many clients don’t provide this information, and some provide bits and pieces. Some accounts are assigned before they charge off and some are assigned after they’ve charged off. These are important things to know. When you speak to the client, if they’re a client who will share this info with you, its helpful to know the following information:

Date last paid - This is important as it tells you how long ago they paid, and many times when someone stops paying, there is a reason that’s worth investigating- did the unit get wrecked? Did they give it to a 3rd party? Did they lose a job? Foreclosure?

Date past due – This tells you how long they have been delinquent. If a person is two payments down versus five payments down, that makes a huge difference in regard to how you approach the way you work the account, and what you say if you speak with them.

Amount past due – This is important if you speak with them and they ask how much do they owe. Many times these customers have not had anyone speak with them for months as they’ve been on the lamb. If you happen to get them on the phone, you may only have one chance to resolve the account, and if you don’t know how far past due they are, in exact numbers, you lose credibility.

Monthly payment amount – This is important as they may have another payment due the following day, so its good to know how much that will be.

Balance – This gives you an idea what the difference is between the amount in full they owe (with interest) versus the actual value of the car. Many times this can have an impact on the customer’s decisions regarding the loan, and the collateral.

Charge off information - When applicable, this is critical information to know. First off, if the loan hasn’t charged off yet, but is nearing charge off, the actual charge off date is important, as that is usually the last date the customer will have an opportunity to make any payments. After a loan is charged off, loan payments are normally not accepted, which means the only payment options after charge off are to pay off the full amount of the loan, including expenses, less interest. The charge off date is also important as many files will close with the skip agency when the loans charge off, so if you are close to resolving the case, it may not matter to some clients as they have to close the file with the skip agency when it charges off.

6. Credit Application and Contract. When available, this can be very valuable. Successful Skip Tracing involves working with actual data, factual information. The credit app and contract are the two documents that were filled out on the day the customer bought the collateral, so this is when the trace starts. The app gives you valuable references, usually people the customer knows well. The numbers may have changed, but just knowing their names and an address can help you skip them down to see if they know your skips whereabouts. The credit app also tells you where the skip was living and what date, how long they were there and sometimes who their landlord is. This information is available in public records, however, many public records have distorted dates as they are only as accurate as what someone entered in a computer. This gives you a starting point, and the more recent the date of the contract the easier it is to trace their steps after they bought the car. It also gives you the customers place of employment information, and sometimes a prior job or address. There are also boxes the customer checks that ask if they’ve ever been convicted of a crime, filed BK, committed a felony, etc.. If you find out they lied on their credit app that technically means they committed a form of fraud, and is something you can use in your investigation.
The contract is the binding legal document between the finance company and the customer, and while you usually have the necessary information it contains, it sometimes can give you important information like a color, the dealership contact info, or the payment amounts. IF YOU DON’T HAVE A CREDIT APP IN THE FILE WHEN YOU REVIEW THE ACOCUNT, ASK THEM TO SEND YOU A COPY OR READ YOU THE INFORMATION FROM IT.

7. Collection notes. Unfortunately, these are not always available, and yet they are possibly the most important part of the pre file review. If you know what has transpired on an account, it’s much easier to work a file, and it can save you a lot of time. While you don’t always take the work someone else has done as the gospel, if the client assigned an account to run an address that looks interesting to you and the repo agent reports they made contact with the guy who just bought the house and he says he bought it out of foreclosure, there is no point in running that address in the field. If the client says a relative is cooperative, or not, that is helpful to determine how you approach the call to that relative, versus going in blindly.

8. Call the client to review the account - This is an important part of how you prepare to work the file. It’s a good idea to introduce yourself if you don’t already know the collector, and even if you do, a couple minutes on the phone discussing what they know about the file and what they’ve done, and asking for the information you need, can all make a big difference in your success.