One Bad Apple Don?t Spoil the Whole Bunch

On Monday, July 7, insideARM reported that Nickie Bradley, the owner of a collection agency based in Florida, is facing 10 years in prison for purposely failing to remit over $100,000 that her agency, H.W. Ketchum Collection Agency, collected for Mississippi State University ("Collection Agency Owner Faces 10 Years for Stealing from Client," July 7).

The firm had been in business for 27 years, but after the company relocated to Florida, business dried up and soon Mississipi State was the only client. Bradley began to delay payments to the university in order to cover her expenses, and then stopped paying altogether when her business went under.

Pardon me for getting on my soapbox, but has anyone ever heard of this collection agency before this article was written? Not me. I checked our own proprietary databases of collection agencies in the country and I could not find this agency on any lists. Nor could I find them in the ACA directory.

As a firm, we have been actively focused on the affairs of the debt collection industry and more broadly accounts receivable management for almost 20 years, and this is definitely not the first time that an agency owner or staff member has failed to remit moneys due to their client. And, big surprise, it will not be the last. What is startling to me is that a public university, farming out collection of Perkins loans backed by the United States Department of Education, would not be more diligent in the selection and management of a vendor that is responsible for handling their collections. Maybe I am giving the university more credit than they deserve, because it appears they were not diligent at all. That is unacceptable on many levels.

I find it extremely hard to believe that the university went to great measures to protect itself from fraud. And I am sure they are not the only credit grantor that poorly qualifies their collection agency vendors. I am also sure the office that is responsible for selecting and monitoring collection vendors is overworked and stretched very thin, but there is no excuse for continuing to place accounts of this magnitude (or for that matter any size) with a collection agency unless it has done its homework.

Of course “bad apple” stories like this make the headlines in the mainstream media, but the ACA study that found that collectors return more than $40 billion per year to the U.S. economy do not ("ACA Study Shows Collection Agencies Recovered $40 Billion in 2007," June 26). It’s up to legitimate, reputable business owners in the industry to keep their clients informed of the best practices they are employing in the collection of debt.

Agency owners: make your clients and prospects aware that this occurred and that you are a collection agency that will keep them out of headline news. They will appreciate it and maybe increase the amount of business they place with you. After all, as the Jackson 5 once said, “one bad apple don’t spoil the bunch.”