An Open Letter of Support to the Accounts Receivable Management Industry from Mike Ginsberg, President & CEO of Kaulkin Ginsberg Company

We would like to express our compassion and support for the members of the accounts receivable management (ARM) industry who have been negatively impacted by the recent events taking place across our great country. Our concern extends to their loved ones, staff and stakeholders, clients, and the millions of consumers they are helping nearly every day. Debt collection and managing accounts receivable is the bloodline of our credit economy. On a combined basis, we estimate that ARM companies are connecting with tens of millions of consumers every month and returning billions of dollars to our economy every year. Because of these connections, we as an industry, and as individual companies, are in a very powerful position to make a difference and perhaps improve the reputation of bill collectors.

In the past 3 months, our nation has been dealt two tremendous blows that impacted us both professionally and personally. First, the Coronavirus forced many ARM businesses and certain clients to cease collection activities in specific regions and most were forced to quickly adopt a work-from-home solution without any planning. Unemployment rates have reached levels we have not seen since the Great Depression of the early 1900s. ARM companies have been forced to lay off or furlough staff and reduce operating expenses to remain in business. These significant events alone are severely impactful. Compounding the pressures placed upon ARM professionals is the looming CFPB final rule on debt collection, the potential impact of the HEROES Act on collection activities, and the costs involved in moving toward artificial intelligence/machine learning. It is truly a remarkable time.

Over the past two weeks, we also experienced vast numbers of peaceful and righteous protests. Unfortunately, we also watched as these constitutionally protected demonstrations escalated into violent riots and criminal looting in some of our beautiful cities. I grieve the appalling, unwarranted, and tragic deaths of George Floyd, Breonna Taylor, Ahmaud Arbery, Eric Garner, and Freddy Gray, to name a few of the many senseless losses that we incurred as a nation. I am appalled by the conduct of certain cops who think it is okay to snuff the life out of individuals who may have committed petty crimes, were not tried or convicted, and were not resisting arrest at the time of their passing. These cops, like other criminals, must be quickly arrested and prosecuted to the fullest extent of the law. We have seen what happens if they are not dealt with appropriately. Prosecuting these criminals is a lot easier than addressing the larger problem of racism in America. As professionals, we must speak up and we must listen because nothing can change if we do not talk about what is wrong first. America was founded on the principle that all of us are created equal, and it is our job to live up to that ideal. 

We are living during an unprecedented time in our country’s history. People are gravely concerned about their health and safety. Cities have virtually shut down as people were forced to shelter at home for months. Business owners and employees alike were left without a financial livelihood. Professional and recreational sports stopped being played. Live concerts were canceled. Restaurants were forced to abruptly change from sit-down to take-out/delivery virtually overnight. Public transportation was upended. Movie theatres closed and some may never reopen. I could go on and on.

Over the past 30 years that Kaulkin Ginsberg has been in business serving the ARM industry, I have been very fortunate to have met with thousands of owners, executives, and staff members from all types of debt collection agencies and ARM firms. I can tell you objectively that these are very good people running very reputable companies. Over the past few months, as their collectors are reaching out to consumers about their debt obligations, they find themselves on the frontline providing financial advice to consumers. The bank is not providing this advice. Neither is the hospital, the college, or the university. Nor the state government or municipality. The bill collector is the only one who is directly educating the consumer about their financial obligations, and they are providing real suggestions on how to address these obligations. This is not new. Collectors have been responsible for educating consumers on their financial responsibilities for decades. What is new is that they are being restricted by clients and regulators to cease collections during the pandemic. There are also Federal laws that, if passed, will negatively impact collection efforts for months into the future. Most consumers are employed and fully capable making payments on their debts. Those who are not able to make payments are being afforded government stimulus that is not being garnished by collectors. At times of great economic difficulty, consumers must do their part to pay back past due accounts receivable or our country will tailspin into another Great Depression. Consumers who can make payments must do so. It is really that simple.

I do not pretend to fully understand the complexities we are experiencing both economically and socially. I gain perspective the old-fashioned way. I pick up the phone and talk to people directly. There is one thing I am certain about. Positive change will not happen by itself. We must work together to make positive change happen. 

I am grateful to live in a country where I can voice my opinion without fear of being locked up. I am fortunate to have the attention of influential people and I will never take that for granted.

I encourage you to invite conversation whenever possible. Please take care of yourself and each other.

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