How to Recover Business Debt by frd14751


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									                       Q-C FIRM GOES AFTER BAD CHECK WRITERS
      Trac-A-Chec helos customers recover debt
                                      BY THENUM~RS
     By Jennifer DeWitt               /.{Jl2006 iErac-A-Ghecrecovered 25i1,599 iI"eturllea checks ,for its hundreds of
   QUAD-CITY   BUSINESS JOURNAL       customers m J 5.states.
                                      v"Trac-A-Checemployees        made atotaI6f176,9!r;,t outbound calls last year in
    In almost 15 years of             attempts to r~(;over'baa checks accepteg by iti:;c)Jstomers.
collecting debts on bad checks,       v"Trac-.A.-Chec's check veriqcatjpp. system-used      by. retailers and otf,ler
                                      busiI1esses~&andlej:\3.67 milliQp. calls last yeart*
Rick Berg and his staff at Trac-A-
                                      /Fifty-fivepercent     ofthe badqllecks sentt(i 1rac~A7Chec clearthe bank on the
Chec Inc. have heard nearly every
                                      secol1dltiltle thr91Jgh.
excuse for why someone' scheck                                                  --Source: trac~A-Chec
bounced - from the legitimateto       *Trac-A-Chec's main customer, Casey's (Jeneral~Stores, does its own check
the just plain, unbelievable.         verifications.
     But whatever the reason,
Trac-A-Chec's goal is to recoup       Berg's late father, Phil. The               helps clients reduce their costs for
the debt for the client who           companies       are    no    longer         check acceptance and their bank
accepted the bad check, said          affiliated.                                 fees.
Berg, who bought the company in            Even with fewer businesses                 With its Centralized Returns
 1993 - setting up shop in the        accepting checks as payment                 service, a client such as Casey's
basement of his Bettendorf home.      today, she estimates Trac-A-Chec            with multiple locations, can have
From five employees in the early      receives 15,000 to 20,000 checks            all of its bad or returned checks
days, Trac-A-Chec now boasts a        a month that were returned to its           deposited into one centralized
30-person staff in a north            clients. The company services               bank. This reduces the client's
Davenport office, and the             clients in 15 states, including             check return fees from multiple
business continues to grow.           Iowa and Illinois.                          banks.
     He credits the expansion to           Trac-A-Chec      provides     a            When Trac-A-Chec collects
having carved out a niche in the      whole menu of services to help              debts for a client it consolidates
check-recovery business with          clients improve their collection            the collections into a single
convenience stores, restaurants       rate. The company not only offers           payment, made as often as
and grocery stores as well as         check collection and bad debt               weekly. For example, if Trac-A-
small Mom and Pop businesses.         recovery service after the fact, but        Chec receives 250 money orders
     "Our biggest client is Casey's   also offers clients a computerized          for client, the company makes a
General Stores," Berg said,           system that verifies a check                single deposit "without a lot of
recalling how the relationship        against a national database at the          expense to the client," Berg said.
began with a couple individual        time the check is written.                      Smith said the Back Office
stores but has grown to include            It also now offers Back                Conversion      and     Centralized
the entire nine-state stores chain.   Office Conversion, a new                    Returns systems allow clients to
Among its Trac-A-Chec's other         technology that allows clients to           check on the status of their
clients are Kwik Marts and Loaf       use special equipment or a fax              accounts online.
'N Jug convenience stores.            machine to make their own check                 Here is how the check
     "Anybody       that    accepts   deposits electronically.                    recovery system works:
checks, we will collect for," said         The deposits are sent to Trac-             When Trac-A-Chec receives
Chriss Smith, the company's vice      A-Cheek's      Electronic Funds             a bad check, Berg said the first
president, who joined           the   Transfer (EFT) network, which in            step is to send the check back
operation when it was a home-         turn deposits the money into the            through the checking account
based business.                       client's    bank,    Smith said.            with the client's service charge
     Trac-A-Chec began as an          Although the clients still must             added. "About 55 percent of the
offshoot of Trackers, a debt          drive to the bank with cash                 time the bad check is paid that
collection business founded by        deposits, she said the service              way," he said. If it doesn't clear,
it goes to our collections                   Trac-A-Chec then rebates a
department, which makes calls           percentage of the fee back to the
and sends letters (to the debtor),"     client. "The rebate varies on the
Smith said. "We've heard some           volume of the customer," Smith
good ones. You have your honest         said. The amount of the service
'I made a mistake in my check           fee varies by state, but is $30 in
book' or those who say 'I know I        Iowa and $25 in Illinois.
did wrong, but I had to have a               Berg's company has seen
couple of days.'"                       how check usage is declining.
     But excuses run the gamut.              "They have gone down
Her staff has heard everything          because of debit cards. But I think
trom "I left the checkbook on the       checks will be around a long
roof of the car and it was stolen,"     time. People still have to pay
or "I can't write down the              bills."
information because I'm driving              For more information, contact
downhill in a tractor."                 Trac-A-Chec at (563) 391-9790
     Even with all the excuses,         or (866) 244-5933 or at
Berg estimates that his company
collects on average 80 percent of
the money due overall. Clients are
paid 100 percent of the check's
face value when Trac-A-Check
makes a collection.
     If the check is a forgery or
involved in a bankruptcy, Trac-A-
Chec cannot get involved and the
check is returned to the client,
Berg said.
     A bad check can remain in
the regular collections department
for up to 6 months, Smith said,
adding that the company has its
own staff attorneys, who get
 involved if the collections staff is
unsuccessful. If the debt still is
not paid, the check is sent on to
 Goggins & Lavintman, collection
 attorneys outside Minneapolis,
 which she said is, "the last step."
     Trac-A-Chec will pursue a
bad debt for up to four years
before the check is finally
 returned to the client as
 "uncollectible," she added.
     "The only way we make
money is to collect the check,"
 Berg said, adding that Trac-A-
 Chec does not charge its clients
 for its services. Instead, it
 receives the service fee charged
 by the retailer when a check is

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