PPMS & CEO?s Sixth Sense Avert $300K Scam Targeting Collectors

Morgan Hill, CA:  In today’s once-in-a-century economic climate, every dollar counts.  Each collection that an agency makes on behalf of a creditor works not only to keep costs down for consumers, but also to employ people, from the agents who make the calls to all the vendors who support the process for a typical collection operation.

Carlos Casas, president of The Rickenbacker Group, Inc. (Rickenbacker) based in Morgan Hill, California, knows this well.  This is why Carlos has implemented stringent fiscal and accounting controls within the firm’s fledgling Professional Practices Management System (PPMS) program—to safeguard clients’ assets and ensure organizational stability in these difficult times.  When something didn’t seem quite right about a recent large-balance collection the firm made against a commercial account, PPMS was put to the test.

“We got a call in August of last year from a company in China going by the name of Jiangsu Shenlong Hi-Tech Group (JS Hi-Tech).  They said a company here in the States owed them more than $600,000.  We have experience with big commercial balances and dealing with overseas accounts, so of course we were happy to have the business,” Carlos stated.

There was nothing unusual about the circumstances of this new client.  Everything about the debt and the debtor sounded like typical transaction of the nature described by the client.  Once JS Hi-Tech signed a contract and placed the account, Rickenbacker went to work.

Within a few weeks, the collector had secured a partial promise to pay from the American firm for just under $300,000. This was not necessarily a red flag, given the circumstances of the account.  Rickenbacker then received a bank check for the promised amount at the end of September.  The company’s accounting staff deposited the check and followed its PPMS procedure for large-balance transactions.  Electronic remittance to the Chinese firm was scheduled, but would not occur until the check cleared.

“I knew we were on top of things, but something just didn’t sit right with me about this account,” Carlos added.  A former U.S. Navy intelligence officer, Rickenbacker’s president paid extra close attention. “I spoke with the bank.  Sure enough, the check was counterfeit.” The FBI was informed of the counterfeit; however, the matter was referred to local authorities because no monies were lost as a result of the attempted fraud.

ACA International‘s PPMS certification program is designed specifically for collection agencies. The program centers around developing an organization-wide management system based upon developing, implementing and adhering to a set of industry-specific professional practices and policies.

The PPMS program requires an agency to have policies in place focusing on 18 basic elements including document and data control, review of client issues, data identification and traceability, corrective action, preventative action and continuous improvement. The overall goals of the program are to create an environment where standard procedures eliminate mistakes and assure operational efficiency and quality.

“The PPMS program is designed specifically to provide a ‘safety net’ for a collection agency—a way of catching mistakes or, in this case, fraud. I’m pleased to hear that, in this case, the program assisted this agency in exactly the way it was intended,” said Ted Smith, ACA International’s Vice President of Membership.

As of this date there are currently 53 agencies holding the PPMS certification through ACA International.   

With strict oversight in place covering fiduciary operations, perhaps Rickenbacker’s PPMS procedures, which are pending ACA approval and certification, should get the most credit for the favorable outcome.  But a collector’s sixth sense sure helps. “If it walks like a duck, looks like a duck, and quacks like a duck, it probably is a duck,” beamed Carlos.