Managing Your TCPA Risk

by John H. Bedard Jr., Bedard Law Group, P.C.

The risk associated with dialing cell phone numbers has reached unprecedented levels. The Telephone Consumer Protection Act (TCPA) has become the weapon de jure among consumers and their attorneys. Unprotected debt collectors risk debilitating harm. Gone are the days where honest, hard working, ethical debt collectors may ignore the dangers of using dialing technology to contact consumers. The penalties available to successful TCPA plaintiffs are draconian, between $500 and $1,500 per call. It is not “if” the lawsuit happens, it is “when.” The time is now to put forward a deliberate effort to manage your TCPA risk. This article provides ideas on how to do just that.

The TCPA, 47 U.S.C. §227, makes it unlawful “to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system [ATDS] or an artificial or prerecorded voice . . . to any telephone number assigned to a cellular telephone service, . . . ” This section of the TCPA is commonly recognized as the “cell phone prohibition” – collectors simply may not use an ATDS to call a cell phone. The two exceptions to this general prohibition are calls made for an emergency purpose and calls made with the prior express consent of the called party. Yes, most debt collectors firmly belief paying their account immediately is very much an emergency, but that is not how the courts have interpreted this section of the law! This leaves the only remaining exception, prior express consent, for collectors to work with. Or does it? There are more ways to skin this cat to reduce your TCPA risk than simply relying on consent. This author’s approach to managing risk is an “arrow and quiver” approach – the more defense arrows contained in a collector’s quiver the better equipped he’ll be to ward off attacks and protect the village. Here are some arrows for your quiver:

Know The Source: The Federal Communications Commission (FCC) has determined prior express consent exists if the source of a telephone number is the called party. This makes it important for collectors to know the source of each telephone number in their collection system. Collectors should have the ability to immediately identify all telephone numbers included in the original placement file from their clients. Special phone fields should be used to identify these numbers versus the numbers a collector may discover through the skip tracing process or from third party data vendors. A debt collector should always be able to easily determine the source of each telephone number he is calling.

Flagging: Collectors can easily mark an account as “disputed.” They should just as easily be able to mark a telephone number as “consent,” meaning they have consent to call the number using their dialer. No matter how consent is obtained, dialers should be prohibited from dialing cell phone numbers unless the telephone number has a corresponding consent flag associated with it.

Scrubbing: The very first step in preventing a dialer from calling a cell phone number without proper consent is to know the number is a cell phone number. A collector must be able to identify cell phone numbers in his database. The marketplace is replete with vendors who can analyze all telephone numbers in a collector’s portfolio and identify each cell phone number. Some hosted dialer companies do it for free. Collectors can create separate fields for cell numbers, flag them, create screen pops, or identify cell numbers a variety of other ways using existing functionality in their collection software. The key is knowing which numbers are cell phones.

Know Who: Collectors need to know who they are calling. Collectors should demand from their clients and data vendors the proper identity of the subscriber of each telephone number in the collector’s portfolio. Considering the extreme sophistication of today’s dialing systems, data sources, phone number porting capabilities, cell phone identification services, and even global positioning services, there is simply no good reason a debt collector should have to place a call without knowing who is going to answer. Cell phone calls to unintended recipients are a growing source of lawsuits against debt collectors across the country. Recycled and ported cell phone numbers are the cause. Know who you’re calling – before you call.

Human Intervention: The FCC believes predictive dialers fall under the TCPA’s definition of ATDS. This interpretation of the law has gotten some traction in the courts as well. See, Griffith v. Consumer Portfolio Serv., 2011 U.S. Dist. LEXIS 91231 (N.D. Ill. Aug. 16, 2011). Despite the actual language of the TCPA, the FCC has suggested a machine that has the capacity to dial telephone numbers without human intervention falls under the definition of ATDS. No matter the name, power dialer, predictive dialer, progressive dialer etc., the FCC believes human intervention in the dialing of the telephone number makes a difference in determining whether the machine a collector uses to dial telephone numbers falls under the definition of ATDS. Introducing an element of human intervention in the process of dialing a cell phone number gives collectors another arrow in their quiver of defenses, so they may argue they are not using the kind of machine described in the statute.

Dialer Lobotomy: Give your dialer a lobotomy. The term automatic telephone dialing system means “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” A key ingredient of an ATDS is the use of a “random or sequential number generator.” Despite how the case law is developing in this area, see Griffith, a machine which does not contain a random or sequential number generator should not fall under the definition of ATDS. Collectors do not use random or sequential number generators. Removing this functionality from a dialer gives collectors yet another defensive arrow to argue they are not using the kind of machine described in the statute.

Beefy Contracts: The written agreement between a debt collector and its client can be a good source of risk reduction, or at the very least some anesthetic to ease the pain. Collectors should insist on certain representations and warranties from their clients about the telephone numbers the client provides, such as: (1) the source of the numbers, (2) whether the client has proper consent to call the number, (3) that such consent has not been revoked, and (3) the type of phone number. Fair and balanced indemnity and defense obligations are also important to the collector’s overall risk management plan. If a client’s warranties or representations turn out to be incorrect, the agreement needs to provide adequate remedy to the collector for the consequences caused by a collector’s reliance on that incorrect information. Collectors may also consider requiring creditors to provide a copy of the underlying credit agreement with the consumer as an exhibit to the collection agreement. For the reasons described in the next section, collectors can find many sharp arrows hidden in the underlying credit agreement between the creditor and consumer.

Credit Agreements: The underlying credit agreement between the consumer and the creditor can also be the source of considerable risk reduction. Collectors should educate and encourage their creditor clients to include prior express consent language in the very agreement which forms the basis of the debt. The FCC has suggested this very same approach. The idea is the consumer’s credit contract includes terms which clearly and expressly give the creditor consent to call the consumer’s cell phone. Ideally, consent would be introduced into the origination process of the credit obligation, through language in a cardholder agreement, a separate medical services intake form, by a separate consent document or contract addendum, or by any other tangible method by which the consumer’s affirmative prior express consent can be memorialized. Strong arbitration clauses and class action waivers contained in a consumer’s credit agreement also serve as deadly sharp arrows in a collector’s quiver. Collectors might encourage their clients to include properly written arbitration clauses and class action waivers in credit agreements with consumers.

Vendor Dialing: Collectors who outsource their dialing function should know how their vendors are dialing cell phone numbers. Generally speaking, the behavior of an “agent” can get the “principal” in trouble. To the extent dialer vendors are considered agents of their collector (or creditor) clients, the vendor’s behavior can very possibly get the collector (or creditor) in trouble. If collectors do not understand how their vendors are dialing cell phone numbers then it will not be very easy for them to assess risk and manage it. If you are not dialing your own telephone, then know how your vendors are dialing for you.

State Considerations: In addition to the TCPA, some states have their own versions of the TCPA or other state laws which regulate the use of dialing technology under certain circumstances. Risk managers should identify these states, know those laws, and make sure their company’s processes accommodate the nuances of state laws which regulate the use of dialing technology.

Consent: Last but certainly not least, obtain consent! Sounds easy. But how? The number of ways a collector can obtain proper consent from a consumer to call their cell phone using a dialer is limited only by their own imaginations. From inbound IVRs, to live agent scripting, to click through web site consent, to screen pops on collection platforms, risk managers should consider how their organization can best incorporate a mechanism for obtaining consent into their own workflow processes. Perhaps the most important element of any “consent campaign” is documenting the consent. The most effective consent is (1) properly given by a consumer, (2) easy for a collector to know whether they have it, and (3) easy for risk managers and executives to know where it came from based on the regular documentation processes used by their organization. Almost as important to a collector is knowing what consent is not. Just because a consumer calls a collector from their cell phone does not mean the consumer is consenting to be called at that number by a collector’s dialer. Train your people and program your system to recognize telephone numbers which do not yet have consent associated with them and ask the caller for consent. In general, third parties i.e. family, friends, commanding officers, neighbors etc. may not be the source of consent to call a consumer’s cell phone.

The thought of scrubbing out half (or more) of the phone numbers contained in a debtor collector’s dialer queue as “no consent cell numbers” is enough make any collector immediately run to the edge of the nearest tall bridge. The thought of being liable to consumers for at least $500 for every call made to each of those telephone numbers; however, will most certainly cause that same collector to jump! Don’t be caught off guard with TCPA risk. Take steps now to assess your TCPA risk and reduce it. It’s not “if,” it’s “when.”

Outsourcing - Is It Right For My Company?

by Matt Pridemore, Vice President

It's interesting to me the number of conversations that I have with agencies regarding the basic tenets of outsourcing. While my conversations are specifically related to licensing, more often than not I find myself walking through the more general advantages of outsourcing - those benefits inherent to the idea of outsourcing, regardless of industry.

While the next few paragraphs may look remarkably similar to the information on your individual websites and other collateral material I assure you they were not copied.  The truth is that we are all selling the same idea.  We are all outsourced service providers.

Organizations that outsource certain corporate functions that have historically been handled in-house (i.e. collections, licensing, IT, customer service, etc.) do so for a number of reasons.  A few of the more common reasons are provided below:

-    Reduction of labor costs – An outsourced provider with the right volume, operating efficiencies and cost structure should be able to perform the particular operating function at a much lower cost than the organization would be able to do using their own resources.

-    Focus on core business functions – Internal resources can focus more directly on an organizations core competency and reduce the distractions of operating functions that do not generate revenue.

-    Operational Expertise/Knowledge – Provides an organization with operational best practice and a wider experience and knowledge base that would be difficult or time-consuming to develop in-house.

-    Scalability – An outsourced provider should be prepared to manage a temporary or permanent increase or decrease in production levels.

-    Reduce Liability – An approach to risk management for some types of risks is to partner with an outsource provider who is better able to provide a service that helps mitigate the associated risks 

As you are aware, each state has the right to enact its own set of collection laws and requirements.  As such, most jurisdictions have very different statutory regulations and application requirements.  Not to mention the fact that we are not operating in a static regulatory environment – both the regulations and application requirements are always changing.  The overall cost savings that outsourcing can provide combined with the overall assurance that you are compliant in this ever changing regulatory environment makes outsourcing a compelling option if you are licensed in more than just a few states.  Here are a few questions to ask when selecting a licensing provider:

-    Is collection agency licensing the firm/individual’s core competency?
Collection agency licensing is different than most other corporate registration.  In addition, the states are continually changing statutory regulations and application requirements.  Just because the firm/individual has done some collection agency licensing or does other types of corporate licensing does not mean it will translate to your collection agency licensing project.

-    How long has the firm/individual been providing collection agency licensing services?
Relationships with the various state regulators are important and can only be developed over time.  Furthermore, no two licensing projects are alike and sometimes lessons are learned through mistakes made.  You do not want the firm/individual that you are using learning lessons at your expense.  Even small mistakes can significantly extend the time in which it takes to get licensed.

-    Does the firm/individual guarantee their service?
While no one can guarantee whether or not a state will grant your organization the required debt collection license, they can guarantee that all license renewals and annual reports are filed on a timely basis.  Make sure that if the individual/firm that you are selecting fails to meet a license renewal deadline and you have provided all necessary materials on a timely basis, then they will pay any late fees or penalties that are incurred.

Cornerstone Support has established a reputation as the premier licensing service provider to the collection industry.  We understand the particular nuances of licensing all types of collection agencies and are professionally staffed and trained to get your agency licensed faster than anyone else in the industry.  We realize that your time is best spent on the moneymaking ventures of your business.  In allowing us to take care of your licensing, you can be assured that you are compliant in every state without the stress of managing every detail. Call us today at 770.587.4595 or e-mail us at info@cornerstonesupport.com to find out more.

Direct Navigation: the Missing Metric

by Justin Hartland, Global Marketing Manager, CSC 

Given the amount of money companies spend each year on search engine marketing and affiliate programs, getting visitors to your website has never been so important. According to the market research firm Outsell Inc., in 2010 spending for online marketing surpassed even that of print advertising, soaring to a record $119 billion.

There are good reasons for this. For marketing departments, online spend is transparent and can be easily tracked and measured to show return on investment (ROI), something that can prove harder to do for other marketing activities. In fact, it’s quite simple to track a variety of online metrics, build reports with them and present the results to your management team.

However, there is one metric that is routinely overlooked by marketing departments: traffic driven through direct navigation.

First let’s examine what we mean by “direct navigation.” There are many ways for a person to find a particular website, including through search engines or by clicking a link in an email or banner ad. However, many Web users still make a habit of typing Web addresses (domain names) directly into their browser, also known as direct navigation. Findings from Forrester Research suggest that no less than 40% of Web users currently reach their content this way.

You may be asking, “What does this mean for my organization?” In short it means that one of the most obvious sources of Web traffic is being ignored by most companies. Many organizations have no idea how much direct navigation traffic their domain names drive to their websites, and even worse, many companies don’t even point their domain names to live sites.

In a recent study, CSC analyzed more than 200,000 domain names containing more than 100 brands. We found that nearly 50% of domains owned by brand holders did not point to a live site. On the other hand, 76% of branded domains registered to a third party did point to a live site. What is clear is that third parties know how to exploit the value of traffic driven to their domain names, whereas many legitimate brand owners who have registered domain names defensively have never bothered to set them up to garner traffic.

So how can corporations harness this “missing metric” and drive more traffic to their websites through direct navigation? CSC recommends taking these four simple steps:

Step 1 – Point Existing Domains

Gather a list of your existing domain names and run a report on them to show which point to live websites.

Step 2 – Identify Third Party registrations

People who register variations of your brand names do so because those variations drive traffic that can be monetized. Wise organizations will identify third party registrations, prioritize the list based on which names drive the most traffic, and take action against those third parties.

Step 3 – Identify Available Domain Names

Using strategic tools such as those provided by CSC, you can identify available domain names that will drive traffic to your sites.

Step 4 – Track, Track, Track

Once all the names in your portfolio point to live sites, monitor their traffic on a monthly basis. Understand which domain names are performing well. Allow underperforming names to lapse and redeploy those savings to your budget. With this information in hand, your marketing team can quickly measure the ROI your direct navigation efforts yield.

With more and more emphasis being placed on getting Web users to your websites, it’s important that you understand all the ways Web users reach you, including the missing metric—direct navigation.

About CSC

An ICANN-accredited domain name registrar since 1999, CSC is the trusted partner of more than half the 100 Best Global Brands (Interbrand^®) and the customer approval leader for domain name services (World Trademark Review, 2010). CSC offers an end-to-end solution for all corporate brand protection needs, from strategic domain registration and online monitoring to digital certificates and trademark screening. Visit www.cscglobal.com or call 800-927-9800 to learn more.

The Importance of Information Security

by Anthony Lopreto, CEO - Fynix Security Inc.

In today’s technical environment, organizations have become extremely dependent on their information systems.  Most companies consider their information systems the crown jewel of their business.  The public has become increasingly concerned about the proper use and protection of personal information.  As organizations increasingly rely on electronic information, the more criminals, terrorists, and hackers look to uncover ways to exploit that information. The cyber criminal was once motivated by mischievous actions and recognition; now their intent is to cause catastrophic damage, widespread leakage and monetary gains at the expense of your customers’ personal information.

Organizations need to fully understand their responsibility to protect information and the consequences if a breach were to occur.  Security breaches make the news on a regular basis.  Hundreds of incidents never make the news and go unreported. When a company or government agencies security is breached, it leads to the loss of personal information, trade secrets, confidential and other information.  These types of breaches can affect millions of data records, millions of people and clients, and can cost the organization millions of dollars as well as loss of business and reputation. 

Organizations can take several steps to help protect their information systems.  Many industries must adopt and abide by the requirements of the particular industry they are doing business in.  Most companies will voluntarily adopt a code of best practices in order to affirm their commitment to protect personal information.  The ISO 27002 is one of the most widely adopted standards used by organizations who are proactively taking steps to protect electronic information.  The ISO 27002 addresses the following categories we call domains:

·         Risk assessment

·         Security policy

·         Organization of information security

·         Asset management

·         Human resource security

·         Physical and environmental security

·         Communications and operations management

·         Access control

·         Information systems acquisition, development and maintenance

·         Information security incident management

·         Business continuity management

·         Compliance

The primary goal of these domains is to provide a secure information system environment while at the same time ensuring Confidentiality, Integrity and Availability (CIA).  Here are a few key benefits that following these standards provides:

·         Identifies and determines the value of all company assets

·         Comprehensively reduces the probability of unrecognized information security threats and vulnerabilities

·         Increases information security awareness throughout the organization

·         Centralizes the security objective by management into a clear and concise policy

·         Provides a strong foundation in order to build system specific security controls

·         Creates a generally acceptable practice and re-usable across multiple departments

·         Satisfies the requests of most partners/suppliers to substantiate information security controls without having to service individual enquiries or provide confidential information

·         Promotes the company image as a secure business partner

Adopting a standard such as the ISO 27002 can help minimize the risk and related consequences of an information security breach, as well as satisfy the requirements of service providers, vendors and partners.  Applied correctly, it can give your organization a competitive and marketing advantage over competitors who may not have a secure foundation.

                                    Anthony Lopreto - CoFounder and CEO - Fynix Security Inc.

                                    www.fynixsecurity.com

                                   

E-mail, The New Frontier

by John H. Bedard, Jr. - Bedard Law Group, P.C.

Are you considering an e-mail campaign in your arsenal of collection strategies?  Do you accept inbound e-mail from consumers?  Do you include e-mail addresses on your web site?  If you are a collector and not thinking about these things, you may be missing some opportunities.  You may also be overlooking some risk.  Although reported case law addressing e-mail in the context of consumer collections is scarce, the law is beginning to develop, albeit slowly.  Communicating with consumers via e-mail raises compliance challenges; however, these challenges are not insurmountable.  Here are some cases which discuss e-mail in the collection context:

Pacheco v. Joseph McMahon Corp., 698 F. Supp. 2d 291 (D. Conn. 2010).  In Pachecho, a collector sent an e-mail to a consumer to collect a debt.  Included in the body of the e-mail was the statement, “ . . . Your balance will be in excess of $2,000, before legal fees.  Give me a call. . .”  The e-mail did not include any profanity, was not abusive, and was otherwise courteous. Like most e-mail, the tone was informal and casual.  However, the consumer was located in Connecticut.  Connecticut law puts certain restrictions on the ability to collect attorney fees.  The consumer brought suit accusing the collector making misrepresentations about the debt because of the reference to “attorney fees” in the e-mail.   The court agreed, granting the consumer’s motion for summary judgment.  The court found that the reference to attorney fees was a false representation about “character, amount, or legal status” of the debt because under Connecticut law, attorney fees are restricted.  Stating that the consumer would be liable for attorney fees was false.

Silver v. Law Offices of Howard Lee Schiff, P.C., 2010 U.S. Dist. LEXIS 76072 (D. Conn. July 28, 2010).  In Silver, the consumer hired an attorney after receiving communication from the collector.  Instead of calling the collector or sending a letter advising of attorney representation, the consumer’s attorney sent an e-mail to the collector.  The e-mail advised the collector that the consumer was now represented by counsel.  After the e-mail was sent, the collector called the consumer.  The call occurred at 6:09p.m. on the same day the e-mail was sent.  The collector did not open the e-mail until 6:30p.m., which is when the collector learned of the attorney representation.  The consumer sued the collector for contacting a represented consumer.  The court found no violation, explaining that the statute prohibits communication with the consumer if the collect knows or has knowledge of or can readily ascertain the attorney’s name and address.  Since the collector did not check his e-mail until 6:30p.m., he did not know or have knowledge of the attorney representation; therefore, the phone call did not violate the prohibition on communicating with represented consumers.  

Lakefish v. Certegy Payment Recovery Servs., 2011 U.S. Dist. LEXIS 36475 (D. Or. Apr. 4, 2011).  In Lakefish, the collector sent a consumer the validation notice in writing.  In response, the consumer sent an e-mail to the collector requesting the name and address of the original creditor.  The validation notice requirement specifically includes a requirement to send the consumer “a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.”   The court found that the inbound e-mail from the consumer requesting the name and address of the original creditor was sufficient to trigger the collector’s obligation to respond or stop collecting.  Ultimately, the court found there was no violation of the validation request because the collector properly responded to the e-mail.

E-mail is ubiquitous in today’s economy.  Consumers and collectors alike want to communicate via e-mail.  It’s easy, low-cost, convenient, and to use a trendy buzz-word, it’s “green.”  The anachronistic FDCPA; however, creates compliance challenges which ultimately hurt consumers when collectors are reluctant to step into the 21st century e-mail world. Collectors should not undertake an e-mail campaign lightly.  It requires a thoughtful workflow plan, policies and procedures, and buy-in from the highest levels of the organization.  And of course, get your compliance people involved in the process!

John H. Bedard, Jr.

Bedard Law Group, P.C. 

2810 Peachtree Industrial Blvd., Suite D

Duluth, GA 30097

678-253-1871 ext. 244

jbedard@bedardlawgroup.com

New Registration Requirement in Texas

  

Senate Bill 17, entitled the Residential Mortgage Loan Servicer Registration Act, requires the registration of servicers of Texas residential mortgage loans.

A residential mortgage loan servicer is defined as a person or entity who a) receives scheduled payments from a borrower under the terms of a residential mortgage loan, including amounts for escrow accounts; and b) makes the payments of principal and interest to the owner of the loan or other third party and makes any other payments with respect to the amounts received from the borrower as may be required under the terms of the servicing loan document or servicing contract.

Although 3rd party debt collectors are implicitly included in this bill, there are exemptions from the registration fee and bonding requirement provided the applicant:

 - collects delinquent consumer debts owed on residential mortgage loans;

 - does not own the residential mortgage loans for which the applicant acts as a residential mortgage loan servicer; and

 - is a 3rd party debt collector that has filed a bond in compliance with Chapter 392.  

Should you have any questions or issues concerning this matter or should you wish to engage Cornerstone Support's assistance in obtaining specific state licenses or registrations, contact a Cornerstone Support licensing consultant today at 770-587-4595 or e-mail us at info@cornerstonesupport.com. 

3 Myths About Mergers & Acquisitions Involving ARM Firms

by Brian Greenberg, CEO of Greenberg Advisors

The idea of M&A conjures up a variety of images, sometimes involving private jets, limousines, and Swiss bank accounts. The fact is there are many commonly held, yet false, beliefs regarding M&A transactions, how they happen, and why some succeed while others fail. Having advised buyers and sellers for many years in M&A transactions in ARM and related sectors, we’ve observed a number of recurring misconceptions. In this article, we will address 3 of these “myths”, and explain why they aren’t usually true.

Myth #1: M&A is Bad for Employees.

Substantial anxiety can result when employees and executives learn that their company is considering a sale. This is understandable, as transactions can bring changes and uncertainty. It’s important to realize, however, that new ownership will often bring a host of benefits to a company’s employees. These advantages can include new capital to fund infrastructure investment and growth, in order to better equip employees for success. They can also include new ideas and expertise to aid in running the company more efficiently, which will ultimately provide greater opportunities to all. In addition, certain groups (such as institutional buyers) often put into place incentive programs, such as performance bonuses or stock options that enable employees to share financially in the benefits of the company’s growth and success, which is usually not the case for a closely-held company that is still owned by its initial founders.

Myth #2: All it Takes is a Few Calls to Get a Deal Done.

It generally takes many hundreds of calls, meetings, and follow-up efforts to close an M&A transaction, not to mention significant resources to prepare a firm for sale, and to create marketing materials, in order to get the attention of the right buyer. To find that buyer, for example, we’ve found that it typically requires making contact with dozens of potential buyers. To be clear, we are referring to groups that are pre-qualified in order to meet certain initial criteria and to have interest in ARM companies, as it’s important to limit any outreach in order to ensure maximum confidentiality, and to avoid wasting time with groups that aren’t a fit, based upon the seller’s requirements and needs. A filtering effect then occurs, where certain firms are not interested, other firms are not a fit for one reason or another, and still other firms may be interested but unable to finance a deal. This “outreach funnel” will lead to the right buyer, which is interested, proposes deal terms and a structure acceptable to both parties, and is able to finance the transaction. The odds for finding the best group by calling just a few groups, or by listening only to the groups that contact you, are extremely low. In the end, even after the right buyer is identified and the right deal is proposed, there is extensive information gathering, analysis, discussion, negotiation, financing, and documentation legwork required before a transaction will ultimately close. Taking a casual approach to the selling process will rarely result in success.

Myth #3: Confidentiality is Always Breached.

Deciding to sell your firm is never a decision to be taken lightly. For many owners who are contemplating a sale process, one of the major concerns is whether “word” will get out about the company being for sale and if so, what the impact might be to the company. For owners, it’s essential to make sure a sale process is kept confidential to avoid negative repercussions. In order to do this, it’s important to assess who you’re working with, and how the process will work. If you are hiring an advisor, ask around regarding their reputation for keeping information private. It’s also standard practice to have potential buyer candidates sign confidentiality agreements in order to legally compel them to keep quiet about the fact that your company is entertaining a sale. And while in our opinion it is completely unacceptable, word does sometimes leak out. However, this doesn’t have to happen, as illustrated by 2 substantial transactions in which we recently advised; the sales of National Asset Recovery Services (NARS) and TRAKAmerica. In both cases, 100% confidentiality was maintained all the way to the closing, as many of the industry’s most connected people later informed us they had no idea those deals were under consideration.

There are many more “myths” regarding M&A in ARM that we haven’t addressed here, but we hope that this article helps to dispel at least a few of them. M&A transactions can bring a host of benefits to owners, executives, and employees alike. While change tends to bring uncertainty and it’s important to cover your bases, it’s also important to factor in the positive benefits that can occur as a result of a well-executed M&A transaction.

To learn more about how to achieve the best results in your own M&A transaction, or to ask other questions, contact Shaun Tiwari at Greenberg Advisors at 301-576-4000 x2 or email stiwari@greenberg-advisors.com.

About Greenberg Advisors

Greenberg Advisors, LLC (www.greenberg-advisors.com) provides value-added strategic advice to clients in the Accounts Receivable Management and related Specialty Finance sectors worldwide. With 15 years of experience dedicated to this niche, and the completion of more than 75 Merger & Acquisition (M&A) and strategic advisory transactions, the firm's success is a result of its distinct client-first approach, deep sector expertise, and roll-up-the-sleeves hard work. Greenberg Advisors offers market-leading advisory services focused on M&A, Capital Raising, and Valuation, as well as a variety of analytical and planning services to assist clients in understanding and enhancing the value of their business. The firm’s two most recent closings involve representing a strategic buyer from outside the US in its search and acquisition of a US-based ARM firm, as well as raising a significant credit facility for a US-based debt purchaser.