Hi,
NSF checks used to be one of the biggest collection problems for both large and small businesses. This situation has dramatically changed due to the introduction of computer verification technology at point of sale. It has reduced the number of NSF checks by 80%. From a collections standpoint, it is important that each check contains as much information as possible about the customer. There various methods that can be used to collect an NSF check.
1) Notify the customer immediately by phone and or mail that his or her check has been returned by his or her bank and that the matter needs to be immediately resolved.
2) Most banks redeposit checks twice and then return them to the depositor if they are still NSF. The depositor can still present the NSF check at the debtor's bank and get the check processed. This takes care of the people that inadvertently wrote an NSF check and for extraordinary reasons did not have expected funds at the bank. Going to the debtor's bank allows the merchant to resolve the issue without further involving the debtor.
3) Each state has different laws governing the penalty for issuing NSF checks. Merchants need to know the laws applicable in their state. If the debtor has not responded to previous communication, a letter should be sent stating that the merchant will be exercising the rights given under the applicable law to collect on the check. It should be spelled out for the debtor.
4) If no payment has been received after exercising these remedies, the check needs to be turned over to a collection agency.
Following these steps in a timely manner increases the chance of recovery on NSF checks.
Tomorrow I'm going to talk about collecting on car loans and car repossessions.
Until then,
Alan
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Wednesday, March 21, 2007
Wednesday, February 21, 2007
Secured Loans
Hi,
Some of the most common secured loans we encounter at one time or another are car loans. Generally car loans are financed in one of three ways:
1) Banks or Credit Unions: the first place to investigate for a car loan. When dealing with your bank, the ideal situation is to get pre-approved for a specific amount before you go shopping for a car. This will allow you to take advantage of the most favorable credit terms and will solidify your financial history with the bank. Inquire to see if your bank carries an inventory of repossessed cars, which are usually favorably priced. Also banks sometimes have relationships with car rental companies and offer special loan rates to their customers for car rental purchases.
2)Major Dealer Financing: Dealers advertise auto loans at incredibly low interest rates that often seem lower than banks or credit unions. The reason for this is that they can inflate the cost of the vehicle. Another way they off-set the cost of their low interest rates is by giving people less for their trade-in. For higher credit risks, dealers often promise financing no matter what your credit history. Generally, they shop various finance companies until they find one that will take your loan. The interest rates on these loans are typically the highest of all car loans.
3) Independent Car Lots: These establishments will generally offer financing in any way that will seem to work to you, the consumer. They offer payment schedules by the month, by the week, and probably somewhere in the country, by the day. Their financing is generally very high risk, and they operate on the principle that with the exorbitant interest rates they charge, they can afford to have an high default rate and high repossession rate. This is not to say that independent car dealerships are not a good place to look if you are paying cash for a car.
As in dealing with all types of credit, car loans are no exception. If you are having problems paying your car loans, contact your creditors as soon as possible.
Tomorrow, I'll introduce the topic of mortgages.
Until then,
Alan
Some of the most common secured loans we encounter at one time or another are car loans. Generally car loans are financed in one of three ways:
1) Banks or Credit Unions: the first place to investigate for a car loan. When dealing with your bank, the ideal situation is to get pre-approved for a specific amount before you go shopping for a car. This will allow you to take advantage of the most favorable credit terms and will solidify your financial history with the bank. Inquire to see if your bank carries an inventory of repossessed cars, which are usually favorably priced. Also banks sometimes have relationships with car rental companies and offer special loan rates to their customers for car rental purchases.
2)Major Dealer Financing: Dealers advertise auto loans at incredibly low interest rates that often seem lower than banks or credit unions. The reason for this is that they can inflate the cost of the vehicle. Another way they off-set the cost of their low interest rates is by giving people less for their trade-in. For higher credit risks, dealers often promise financing no matter what your credit history. Generally, they shop various finance companies until they find one that will take your loan. The interest rates on these loans are typically the highest of all car loans.
3) Independent Car Lots: These establishments will generally offer financing in any way that will seem to work to you, the consumer. They offer payment schedules by the month, by the week, and probably somewhere in the country, by the day. Their financing is generally very high risk, and they operate on the principle that with the exorbitant interest rates they charge, they can afford to have an high default rate and high repossession rate. This is not to say that independent car dealerships are not a good place to look if you are paying cash for a car.
As in dealing with all types of credit, car loans are no exception. If you are having problems paying your car loans, contact your creditors as soon as possible.
Tomorrow, I'll introduce the topic of mortgages.
Until then,
Alan
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