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PUBLISHED BY THE CALIFORNIA ASSOCIATION OF COLLECTORS | WINTER 2016-17

How to Improve Your Odds of Collecting Late Payments Without Severing the Customer Relationship

President’s Message: Welcome!

California’s Minimum Wage Hike Brings Many Changes

How to Close a Sale Without Asking for the Order

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REGION NEWS

REGION 1Francesca Strucksberg 510-632-3366 [email protected]

REGION 2Merged with Region 1

REGION 3Courtney Reynaud 559-485-7900 [email protected]

REGION 4David Cotter 619-295-1200 [email protected]

REGION 5Leonard [email protected]

REGION PRESIDENTS

2 WINTER 2016-17 | COLLECTOR’S INK

TABLE OF CONTENTS

11 How to Close a Sale Without Asking for the Order

5 Welcome!

President’s Message . . . . . . . . . . . . . . . . . . . . . . . . . 5

Sandy Lubin Elected CAC’s 100th President, Outlines Plan for Centennial Year . . . . . . . . . . . . 5

Legislative Advocate Update . . . . . . . . . . . . . . . . 6

ALERT! Marijuana is Legal in California . . . . . . . 7

General Counsel Update . . . . . . . . . . . . . . . . . . . . . 8

How to Improve Your Odds of Collecting Late Payments Without Severing the Customer Relationship . . . . . . . . . . . . . . . . . . . . . . 9

How to Close A Sale Without Asking for the Order . . . . . . . . . . . . . . . . . . . . . . . . 11

California’s Minimum Wage Hike Brings Many Changes . . . . . . . . . . . . . . . . . . . . . . . 13

Court Blocks Federal Overtime Rule . . . . . . . . . . 14

Contribute to CACESF and Help a Young Student Achieve Their College Dream! . . . . . . . . 16

CAC Online Session | Red Flag Rules Have Changed, Have You? . . . . . . . . . . . . . . . . . . . . . . . . 16

Executive Director’s Report . . . . . . . . . . . . . . . . . . 18

7 Marijuana is Legal in California

K E E P C A L M

A N D

R E N E W Y O U R

M E M B E R S H I P

5 Executive Director’s Report

COLLECTOR’S INK | WINTER 2016-17 3

CAC EXECUTIVE COMMITTEE

PRESIDENT

Sandy Lubin Credit Bureau of San Luis Obispo & Santa Barbara Counties Grover Beach 805-481-3155 [email protected]

PRESIDENT-ELECT/ CFO

Kelly Parsons O’Brien Credit Bureau Associates Fairfield 707-432-2401 [email protected]

VICE PRESIDENT/SECRETARY

Courtney Reynaud Creditors Bureau USA Fresno 559-485-7900 [email protected]

MEMBER-AT-LARGE

Shawn Suhr Continental Credit ControlSanta [email protected]

IMMEDIATE PAST PRESIDENT

Linda Guinn CB Merchant Services Stockton 209-944-9001 [email protected]

CAC VOLUNTEER LEADERSHIP

COMMITTEE CHAIRS

BUDGET

Kelly Parsons O’[email protected]

COMMUNICATIONS

Courtney [email protected]

EDUCATION

Shawn [email protected]

LEGAL & LEGISLATIVE FUND

Sean Escobar [email protected]

LEGISLATIVE COUNCIL

Cindy [email protected]

Robert [email protected]

MAP MEMBERSHIP

June [email protected]

David [email protected]

MEMBERSHIP

Rodney Meeks [email protected]

VENDOR MEMBERSHIP

Eric [email protected]

PAC

Robert [email protected]

Cindy [email protected]

FOUNDATION

EDUCATION SCHOLARSHIP FOUNDATION PRESIDENT

Linda Guinn [email protected]

EDITORS

Kate Hicks [email protected]

Kimberly Andosca [email protected]

Collector’s Ink welcomes letters to the editor and submissions from CAC members, however, we cannot guarantee that we publish any of the articles we receive. Collector’s Ink editors also reserve the right to edit all submissions.

Advertisement of products or services in Collector’s Ink does not constitute an endorsement by CAC.

Collector’s Ink (ISSN 0199-2341) is published bi-monthly by the California Association of Collectors.

The annual subscription rate for members of the Association is $80 included in the annual membership dues. Collector’s Ink is the official publication of the California Association of Collectors, Inc.

Information contained in Collector’s Ink is not intended to be legal advice and may not be used as legal advice. Every effort has been made to ensure this information is up-to-date as of the date of publication. It is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own counsel. You are encouraged to seek the advice of counsel relating to any matters affecting you or your business.

Mailing Address:Collector’s Ink1 Capitol Mall, Suite 800Sacramento, CA 95814Phone: 916-929-2125Fax: 916-444-7462Website: www.calcollectors.netEmail: [email protected]

© 2016-17 California Association of Collectors, Inc. All rights reserved. Materials may not be reproduced without written permission.


Welcome! Sandy Lubin President

Welcome to my first CAC Presi-dent’s message. I would like to thank the Board of Governors

and the membership for giving me the honor of representing the association as its President. In the coming year, I will strive to grow our membership, increase member engagement, and continue to advocate for policies that will benefit our industry and small businesses.

CAC is coming up on its 100th year anniversary, and to think that I follow in the footsteps of 99 Presidents that have

brought the association to the level of success and recognition that it currently enjoys today is humbling. I promise to live up to the standard set by so many great leaders before me. In addition, I want to give special thanks to Linda Guinn for her outstanding leadership during our transi-tion to Advocacy & Management Group - our association management company.

You have just recently received your membership renewal packet and I would encourage you to send in your renewal early. Remember that along with ACA,

we have a dual membership requirement which means that in order to belong to one, you need to belong to the other. If you know of agencies that are not part of our organization, please invite them to check us out and see all the benefits that CAC provides. Please see my letter that was enclosed with your renewal for a par-tial listing of what was accomplished over the past year and the tangible benefits that CAC provides on an ongoing basis.

I wish you all a Happy Holiday and the beginning of a great year!

PRESIDENT’S MESSAGE

Sandy Lubin Elected CAC’s 100th President, Outlines Plan for Centennial Year

The California Association of Collectors (CAC) announced the election of Sandy Lubin as the

association’s one-hundredth President. Sandy is the President and CEO of the Credit Bureau of San Luis Obispo and Santa Barbara Counties.

“I am humbled to have been chosen by my peers to represent the CAC as its 100th President, and look forward to continu-ing CAC’s level of success and recogni-tion it currently enjoys today,” said Lubin. “In the coming year, I will strive to grow

our membership, increase member en-gagement, and continue to advocate for policies that will benefit our industry and small businesses.”

A finance professional since 1965, Sandy was born and raised in the Los Angeles area, and has a long a celebrated career in banking. He started his career at Los Angeles Union Bank, where he climbed the ranks before joining Brent-wood Bank, eventually culminating in his recruitment to head up the Central Coast National Bank as president in 1989.

Today, Sandy is the President and CEO of The Credit Bureau of San Luis Obispo and Santa Barbara Counties. He has stayed an active community member by previously serving on the Arroyo Grande Parks and Recreation Commission, was Chairman of the Arroyo Grande Planning Commis-sion, and was an Arroyo Grande City Councilman. Sandy holds a Bachelor’s Degree from Pepperdine University and took graduate coursework in Banking and Organizational Development.


Cliff Berg Governmental Advocates

The California Legislature convened in Sacramento Mon-day, December 5th to open the 2017-18 Legislative Session. While the beginning of a new Legislative Session is

primarily devoted to ceremony and family events, the Members are sworn in, move into temporary offices and have receptions and swearing-in parties, this year saw the Democratic Leader-ship, particularly in the Assembly continuing to escalate rhetoric over the national elections results. The Assembly adopted HR 4 (Rendon) relative to immigration which stated that “California stands unified in rejecting the politics of hatred and exclusion” and called on the President-elect “to not pursue mass depor-tation strategies that needlessly tear families apart or target immigrants for deportation based on vague and unjustified criteria.” Rendon went on to say that California faces a “major existential threat.”

The confrontational Session opening follows a joint dec-laration by DeLeon and Rendon the day after the election which stated, “While Donald Trump may have won the presidency, he hasn’t changed our values...We will lead the resistance to any effort that would shred our so-cial fabric or our Constitution.” In staking out a public position that, “Californians overwhelm-ingly rejected politics fueled by resentment, bigotry, and misogyny.”

The new session is likely to be dom-inated by the confrontation between California’s Democratic political leaders and the Republican White House and Congress over issues such as climate change, the Affordable Care Act, and immigration. On the first day back bills were introduced to fund legal services for immigrants, allo-cating money for training public defenders in immigration law, barring providing the federal government with religious information that could be used for a database of American Muslims, letting Californians vote down a border wall and prohibiting the state from contracting with for-profit immigrant detention companies.

Meanwhile, on the first day back, Senator Bob Wieckowski was ready to go with a new bill, SB 16 regarding wage garnishment restrictions on garnishments for a judgment based on a student loan not made by the U.S. Government.

The Legislature will consider these issues and the thou-sands of bills that will be introduced between Monday, De-cember 5th and Friday, February 17th - the last day to introduce bills. The Legislature sworn-in on Monday is the last that will see a large new class caused by the old term limits. There will be 22 new Members of the State Assembly and 9 new

Members in the State Senate. A significant number of Members, particularly in the Senate were forced out by term limits. Members elected in 2014 and this year serve

under the new term limits law which allows them to serve 12 years in the same House, and results in more Members staying put.

The new Legislature is more Democratic. On Election Day, Assembly Democrats increased their

majority from 52 to 55 in the Assembly, and to 25 to 28 in the Senate, giving them over a ⅔ majority.

In the Senate, Election Day saw the Repub-licans hanging on to the current numbers

with Assemblywoman Ling Ling Chang leading Democrat Josh Newman by

around 2,000 votes in a race to replace former Republican Senate Leader

Bob Huff. However, as absentee and provisional ballots were counted

that lead continued to diminish all through November and in the week before swearing-in, Newman overtook Chang and was declared the winner last

week giving Democrats a 27 to 13 majority in the Senate which is also a ⅔ majority. While much is made about the Demo-crats new super majori-ties, because it takes a ⅔ vote to raise taxes, place measures on the ballot or pass urgency clauses,

there are no guarantees that the Dem-

LEGISLATIVE ADVOCATE UPDATE


ocratic Members will vote in a block on these issues. While the Democrats were picking up their majorities, moderate Demo-crats were also increasing their numbers in both Houses. Many of the battles next year will be over these “mod” votes.

Many of the most interesting races on Election Day were Democrat on Democrat battles between mods and attorney/labor-backed Democrats. In some of the more interesting out-comes around the state:

In the Assembly, three Republican incumbents were defeated, David Hadley in Manhattan Beach, Young Kim from Fullerton, and Eric Linder of Corona. Catherine Baker of Dublin withstood an attempt to unseat her and Jordan Cunningham from Santa Barbara/San Luis Obispo fended off an attempt to capture Katcho Achadjian’s seat. Mean-while, moderate Cheryl Brown was defeated for re-election after being labeled “Chevron Cheryl” in a nasty campaign costing millions of dollars as environmental groups attacked her for opposing greenhouse gas legislation. However, mod Raul Bocanegra recaptured an Assembly seat he lost to Patty Lopez two years ago in the San Fernando Valley, unseating

Ms. Lopez in a rematch. Mod Tim Grayson handily won an East Bay seat held by termed-out Susan Bonilla. Republicans also fended off a strong Democratic attempt to capture Scott Wilk’s seat in the Simi Valley.

In the Senate, Wilk held the Republican seat vacated by the death of Sharon Runner despite an expensive Democratic cam-paign to pick up the Senate, Assembly and Congressional seats in that area. Republicans lost Bob Huff’s seat after Election Day, Anthony Portantino replaces Carol Liu, Henry Stern replaces Fran Pavley, Toni Atkins replaces Marty Block, Scott Wiener re-places Mark Leno, Nancy Skinner replaces Loni Hancock while Jim Beall defeated fellow Democrat Nora Campos and moderate Bill Dodd defeated Mariko Yamada in Napa.

Overall we will see more Democrats, but mod Democrats are increasing their numbers in both Houses. A flood of bills will be introduced, blue California will pick a number of fights with Washington and we head now into the 2018 election with the question as to whether there is anyone running for Governor of California that could play the same role as Governor Brown in moderating the Democrats in the Legislature.

ALERT! Marijuana is Legal in CaliforniaBy: California Employers Association

California voters have passed Prop 64, the “Adult Use of Marijuana Act”! Effective November 9, 2016,

recreational use of marijuana became le-gal in California, although licenses to sell are not effective until January 1, 2017. The initiative legalizes the use and transpor-tation of marijuana for recreational use, with some specific limitations as far as how much individuals can possess and/or grow, as well as regulatory requirements, such as water use by growers.

For employers, the law includes a provision specifically protecting an employers’ right to maintain a drug and alcohol free workplace. Strictly speaking, this means your rights as

an employer are not changed by the legalization of marijuana. If you drug test employees as a condition of em-ployment, you may continue to do so. If you refuse to hire an applicant because their drug test comes back positive for marijuana, you do not need to change your practice because marijuana is still an illegal drug under Federal law.

If have reasonable suspicion that an employee is under the influence of a sub-stance while at work, be it alcohol, mar-ijuana or any other substance, it is still legal in California to drug test them. It is also still legal to take disciplinary action or terminate an employee who is found to be using marijuana at work – just as it

would be if the employee was drinking alcohol at work.

Do employers have to terminate or refuse to hire someone when they test positive for marijuana? That is a more complicated answer, implicating safety concerns and equal treatment issues.

Give CEA a call to discuss your poli-cy and ensure your handbook and poli-cies are up to date and ready for 2017.

Visit www.employers.org for more information.


The New Year Brings New Debtor Communication And Credit Reporting RequirementsTom Griffin CAC General Counsel

Backdrop

In early 2016, then Assembly member (and now Senator) Bill Dodd (D) introduced AB 1723. Assembly member Dodd had

been the victim of identity theft, submitted the appropriate documents in support of his claim to the creditor and collection agency involved, and was frustrated by his inability to obtain a determination of his claim from the creditor and collection agency. A staffer in Assembly member Dodd’s office had worked for a debt buyer and was well versed in the debt collection and credit reporting processes. AB 1723 was introduced to impose certain deadlines and reporting requirements when an identity theft claim is made.

The Relevant Statute

AB 1723 amends Civil Code Section 1788.18. For many years now, Section 1788.18 requires a debtor collection to cease collection activities upon receipt of all of the following:

(1) A copy of a police report filed by the debtor alleging that the debtor is the victim of identity theft; (2) a written statement (either the FTC’s affidavit of identity theft or a state-ment that includes the contents of the Office of Privacy Protection’s identity theft victim’s fraudulent account information request) that the debtor is the victim of identity theft with respect to the debt being collected by the debt collector; (3) a statement that the representa-tions are true, correct and contain no materi-al omissions of fact to the best knowledge and belief of the person submitting the certifica-tion; (4) a copy of the debtor’s driver’s license or identification card; and (5) other described documents and/or information (collectively, “ID Theft Documents”).

Upon receipt of the ID Theft Documents, Section 1788.18 has long dictated that a

debt collector may recommence collection activities only upon making a good faith determination that the information does not establish that the debtor is not respon-sible for the specific debt in question. And, Section 1788.17 has long required the debt collector to notify the debtor in writing of the determination and the basis therefor.

Changes in Section 1788.18 – Deadlines and Notice to Debtor

As previously in effect, Section 1788.18 did not have any timelines or deadlines. AB 1723 changes this.

Now, within 10 business days of receiving the ID Theft Documents, a debt collector, if it furnished adverse information about the debtor to a CRA, must: (A) notify the CRA that the account is disputed as subject to identity theft or fraud; and (B) initiate a re-view of the debtor’s identity theft claim. This is a change. A deadline of 10 business days is imposed to both update the reporting as disputed as subject to identity theft or fraud and to initiate a review of the claim.

After the review is concluded, the debt collector has 10 business days to send notice of its determination to the debtor. This is another change.

It is important to note that Section 1788.18, in its past or amended form, does not impose a deadline on the time required to perform the review. The deadline of 10 business days is to initiate the review and to notify the debtor of the determination after the review is concluded. There is no deadline on the time to perform the actual review. However, as a practical matter, a debt collector should not take more than 30 days to conclude its review.

Changes in Section 1788.17 – No-tice to Creditor and CRA and Pos-sible Nullification of Accounts

Section 1788.17 has long required a debt collector that has previously reported adverse information to a CRA about a debtor and that does not recommence collection activ-ities after receiving an identity theft claim must request the CRA to delete that infor-mation and notify the creditor that collection activities have been terminated based on the debtor’s identity theft claim. As amended by AB 1723, Section 1788.18 now requires the debt collector to send the deletion instruc-tions to the CRA and to notify the creditor within 10 business days of making its deter-mination. These deadlines are consistent with the other changes to Section 1788.18.

Upon receipt of the notice from the debt collector that collection activities have been terminated based on the debtor’s identity theft claim, the creditor may not pursue further collection of, or sell, the account at issue. This is a significant change. The notice from the debt collector to the creditor effec-tively renders the account uncollectible.

Procedures and Client Contracts

CAC’s members are strongly encour-aged to be sure that, effective January 1, 2017, they make the changes necessary in their policies and procedures to insure compliance with these changes to Civil Code Section 1788.18.

Additionally, CAC’s members are en-couraged to consider making changes, or adding an amendment, to their client con-tracts to require the creditor to acknowl-edge that any accounts for which collection activities have been terminated based on a debtors’ claim of identity theft must not be pursued any further (and should be written off). And, the creditor should indemnify the collection agency for any liability re-sulting from any further collection activity on any such account.

GENERAL COUNSEL UPDATE


How to Improve Your Odds of Collecting Late Payments Without Severing the Customer RelationshipBy Greg Cohen, President, International Association of Commercial Collectors

Even the best customers will some-times pay late. But with skillful preparation, communication and

documentation, you can decrease late payments, improve your odds of collect-ing on overdue accounts, and preserve or even improve your relationship with most customers. Here’s how:

Before the sale

Employees, colleagues and custom-ers are more likely to successfully meet expectations when they know and understand them. Your company needs a solid, updated credit policy and equally well-crafted credit and sales documents, including a thorough credit application.

Your credit policy should establish pay-ment expectations - including basics such as what documents must be completed by the customer before credit is issued, at what point in the transaction payment is due, and at what points the credit analyst should make payment reminder calls and turn an account over to a third party.

Requiring every customer to fill in all fields on your credit application is a must, said Tony Terry, President of Continental Recovery & Filing Solutions. This infor-mation can prove vitally important if there is a payment problem in the future, he said, and the prerequisite itself is a screening tool.

“Typically the accounts where some-body didn’t complete the applications are the ones that go south on you,” Terry said. “There are companies that we like to refer to as ‘professional debtors.’ Especially in industries such as food and bever-age, where there are a lot of vendors and competition is stiff, principals who are put on a COD basis with one vendor will sometimes apply for credit with another.” Leaving off important information helps them do this.

Credit analysts will benefit, and credit department efficiency will increase, if your credit policy includes a matrix of common situations that analysts in your

industry face when seeking late payments, and a range of solutions they can offer without additional authorization, said Lee VandenHeuvel, President of Ross, Stuart & Dawson.

Such a matrix might allow a new customer of less than 12 months with some on-time payments and an overdue balance of less than $10,000 to go on a 6- or 12-month payment plan, provided they agree to pay a certain percentage of the debt each month, for example.

Your company credit policy should be required reading for all sales and credit employees. But what about customers? Don’t assume customers know your poli-cy. You have to communicate it clearly to them,” said Joe Batie, Chief Commercial Officer at Caine & Weiner. Consider cre-ating a customer document that outlines your standard payment and credit poli-cies, including time limits for reporting problems with goods or services. Confirm receipt, and make sure customers have easy access to those policies in the future.

After the sale: Be friendly. Listen closely. Observe.

When a shipment or service should have been received, the customer’s credit or sales representative should call to ensure that it did, and that the customer’s expectations were met. This call helps strengthen the mutually beneficial rela-tionship between company and customer, and emphasizes the caller’s role as an in-house advocate. If all is well, note that on the account. If there is a problem, note that and resolve it, or see that someone does, and check back in. Most customers will pay you on time. For those that don’t, your notation that expectations were met and when will prove useful.

Especially with new customers, make a reminder call (or utilize other means of customer communication used in your particular enterprise) several days prior to when payment is due, if it has not yet been received.

“When you get the first invoice paid from a new customer, make a copy of the check they paid you with and throw it in their file,” Terry advises. “Sometimes the banking information they put on a credit application is not from the same account they are paying you with.”

With established customers, watch for pattern changes, all of which merit at least a phone call:

• Payment comes in later than usual.• Payment comes in a different form

than usual; a check or automatic transfer customer suddenly uses a credit card.

• Change in quantity. If a customer who is paying on-time bumps up the quantity of their order, hurray! They are doing well, and so are you. If a customer who is falling even a little behind their usual payment cycle does this, it can signal stockpiling because of a cash-flow problem. If a customer decreases their usual order, they may be planning to switch providers.

“You need to immediately contact the customer to find out what the reason is for the changing in their pattern,” said Thom-as E. Brenan, President and CEO of Altus Global Trade Solutions. “Verify what they are telling you and act accordingly.”

Late payment. Now what?

Before contacting your customer, research both the company and the in-dustry. A failing company in a vibrant in-dustry is a much different situation from a credit standpoint than a long-successful company with a good payment history whose industry is in a spiral.

Gather the internal documents and account notes as well, and have them in front of you. Is there a personal guarantee of payment? If so, this is a very powerful tool of persuasion, and you should remind the customer that you have one. Under-standing the customer’s circumstances and knowing the account history shows


empathy while also giving you authority.

Next step: pick up the phone. How soon depends on industry – you want to act much more quickly when dealing with perishables, such as produce, for example. But know that the older a debt becomes, the less likely you will be to collect it.

Written communication has its place, and you should send letters or email to back up agreements or when phone calls go unanswered. But phone calls are more personal and efficient, allow two-way communication, and enable you to both use and perceive tone.

Remember that the majority of late-pay-ing customers want to be current and pre-serve your professional relationship as much as you do. “You have to convey the message that You’re here to help, not to make life difficult. If you do the latter, you’ve lost the battle already,” VandenHeuvel said. “This really can be done in one sentence, ‘Our company has had a great relationship with your company, and my job is to make sure this relationship continues to thrive. What can I do to help?”

Customers who pay late either can’t pay or won’t pay. The credit analyst’s goal is to determine which and proceed accordingly.

Customers who can’t pay

When customers say they can’t pay, ask why. Your research may have already unearthed the reason: a downturn in the industry; a loss of a major customer; a change in business ownership, even with-in a family; a fire or natural disaster.

As a Louisiana-based businessman, Brenan has witnessed not only businesses themselves, but business lifelines such as delivery and the U.S. Postal Service, stymied by Hurricane Katrina and, more recently, major flooding.

When negotiating with a customer who can’t pay, be respectful and professional. Especially with a longe stablished custom-er, you may feel for them, and it’s ok – in fact good – to express that.

Remember that kindness can literally pay off. A company in financial stress like-ly owes multiple vendors/suppliers money. Being kind and courteous makes it much more likely that your company will be the one to get the check.

Ask when they can make payment in full. If they cannot make payment in full within a reasonable time – and the analyst

decides what’s reasonable – suggest a payment plan. Consult the payment plan rules or matrix in the credit policy. Also trust your research and judgment.

If this is a reliable customer in an indus-try that has slowed, but is expected to pick up – oil and gas for example – and they ask for more time than you are authorized to give, offer to advocate for that with your manager. Or if you are the manager, consider it. They will likely be a strong company again, and you have earned loyalty points. Conversely, if your re-search tells you this company is not likely to recover and/or if the customer balks at a payment plan, suggest a settlement, again consulting company guidelines and seeking approval to go beyond those guidelines if appropriate.

Customers who won’t pay

Let’s acknowledge that customers who could pay, but won’t pay, are the most frustrating. But don’t express that to your overdue customer. They are not in collec-tions, you can still fix this, and you might learn how to improve your own company along the way.

Most often, the customer will tell you there is a problem with their order. It may be real, perceived or made up. You have to determine which. This is where documen-tation of the call after goods or services were delivered comes in. Do you have confirmation that they were satisfied? Educating customers on your credit policy has a role here too: Remind them that if there ever is a problem, they must let you know within a certain window, or else they are responsible for the cost.

As you listen to then investigate what the customer tells you, you may actually learn that your company is responsible, or partly responsible. The goods or services may not have been delivered as promised, for example. Or someone within your company may have made an unauthorized payment deal with this customer, or just given bad information about when payment was due.

If you find any missteps within your company, your company must own them, and then fix them. Communicate what happened to the right people. Make sure everyone understands policy and where the system broke down, and fix it. Apol-ogize to your customer and make it right with a new delivery, a credit or partial credit, as is warranted.

If an analysist discovers that your com-pany did everything right, but this is an otherwise fantastic customer and the dis-puted amount is small, it may be worth-while to, with authorization, absorb some or all of the loss. If this does not apply:

• Present your research to the customer. Be firm and specific - this is powerful. Ask again for payment in full.

• If the customer still says they won’t pay, tell them it’s nothing personal, but they have a choice to make: pay in full now; agree to a payment plan or a settlement; deal with a collection agency and potentially court.

Follow Up

The two most important aspects of nego-tiating with someone who owes you money is to do what you say, and hold them to what they say with follow-up contact.

• If no agreement was reached, and you said collections was the only alternative, send the account to collections.

• If a payment plan or settlement was agreed to, follow up as soon as possible with an emailed or written copy of the terms.

• In the days before the payment is due, if it has not arrived, call with a reminder. This lets people know you are serious and paying attention.

If payment does not arrive on time, call, ask questions and listen to the reasons why. Some new information may inspire you to seek another exception for your customer. But a broken promise is never a good sign. And in most cases, this account should go to a collection agency.

If the payment arrives on time, send an email confirming receipt and say thank you. You should still consider tightening terms, by requiring a cash-on-delivery or even pay-in advance arrangement. Let your customer know that after the debt is payed, you will see that their company credit is fully restored.

About the author: Greg Cohen is pres-ident of the International Association of Commercial Collectors (ACC). A credit and collections industry veteran of more than 20 years, he is also President and CEO of Caine & Weiner.

Originally published by the Credit Research Foundation (CRF). Reprinted with permission.


HOW TO CLOSE A SALE WITHOUT ASKING FOR THE ORDER By Paul Morrow, MySalesVP

Closing a sale is the sixth step in a normal sales cycle; however, there are many times when a trial close

question is appropriate. If done correctly, a trial close will prompt a commitment from the prospect they want to do business with your agency, if not at this moment, then in the very near future. This kind of close is like floating a “trial balloon” that will give you an indication of where you stand with the prospect. It is a way to find out if the prospect is really listening to you, under-stands your presentation, and is receptive to it. If you get a positive response from a trial close question, then you will know you can start to move to the final close.

Trial close questions are very important in advancing the sale but are rarely used by sales reps. They should be used when a prospect reveals an important con-cern they have with any agency they do business with. This might be something like the type of reports they need. If you will be able to meet their precise report-ing requirements, you can ask, “If I can produce the reports that you require will you do business with us?” If the answer is yes, then you are very close to getting a new client. If the answer is no, then you need to try and uncover other require-ments that, if met, will enable the person to make a commitment to you.

If you feel you are getting close to a final sale, then you can test the waters by asking for a sample file layout so your respective IT departments can begin communicating. If they agree to giving

you their layout requirements, then you are at or near the final close of the sale. If there is hesitation, then it could mean this person needs approval so you therefore need to try to get to other people in order to present yourself and get the deal done.

There are many questions that can be used for trial close questions:

“If I can fix that problem for you would you be interested?”

“How does that sound to you?”

“If we could provide month end reports the day after month end, would you be interested in doing business with us?”

There’s another important point to remember. Most salespeople have the gift of gab, and too much so. Stop talking right af-ter you ask the trial close question and wait for a response from the prospect and listen carefully. If the prospect sounds doubtful or uncertain, go back and clarify your point or try to uncover additional information.

When using a trial close question or a final close question, you must be very confident and expect a positive answer. If you do not have this confidence, it will be perceived on the other end by how you ask the question and will tend to make the prospect’s answer also less than confident in what they want to do.

It is very important to review the decision process with each prospect early in the sales cycle so that you understand the people in-volved and who the ultimate decision maker is. If you establish that the person you are

currently dealing with is not the ultimate decision maker, then you can use a trial close to meet with the appropriate person. If you get a response that results in a delaying action, then you need to present other ideas in order to get this commitment.

Just by asking if you can present a proposal after meeting with a prospect is a trial close question, since you can deter-mine the amount of interest there is with this prospect based on the response. If the person would like a proposal, it is then an opportunity to review your standard pro-posal in order to uncover areas that you may not have discussed up to that point.

A trial close question is just what it sounds like. It is a technique to determine where you are in the sales process and perhaps what is needed to close the sale. If a prospect is constantly agreeing with ev-erything you are presenting, then you really need a trial close question to establish where you really stand with the person.

If you do not use trial close questions than you will probably wind up trying to close a suspect which is a waste of your time and you would be better spending your time with a real prospect. You should use trial closes early and often in order to move the sales along or else realize it is time for you to move onto the next prospect.

If you would like to learn more about this topic or other sales management challenges you would like to discuss please call Paul at 215-219-8346 or email him at [email protected].


Collectors Insurance AgencyA Subs id ia r y o f ACA In te rna t i ona l

Your future.Our purpose.Collectors Insurance Agency—here for you, your

business and your future. Together, we protect an industry.

Contact us today at (952) 926-6547 or [email protected].

Your professional staff at Collectors Insurance Agency apply the vital experience required to address your complex insurance, bond and licensing needs. Your business is our only business.

Commercial insurance – Statutory and client bonds

Licensing/qualifications/annual reports – Industry-specific loss prevention

Coverage review and audits – Contract reviews – Invested carrier partners

Proactive review of corrective measures – New service exposure analysis

Contact Us: (952) [email protected]

CIA Ad_Coll_6-11.indd 1 5/16/11 12:57:12 PM

Collectors Insurance AgencyA Subs id ia r y o f ACA In te rna t i ona l

Your future.Our purpose.

Collectors Insurance Agency—here for you, your business and your future. Together, we protect an industry.

Contact us today at (952) 926-6547 or [email protected].

Your professional staff at Collectors Insurance Agency apply the vital experience required to address your complex insurance, bond and licensing needs. Your business is our only business.

Commercial insurance – Statutory and client bonds

Licensing/qualifications/annual reports – Industry-specific loss prevention

Coverage review and audits – Contract reviews – Invested carrier partners

Proactive review of corrective measures – New service exposure analysis

Contact Us: (952) [email protected]

CIA Ad_Coll_6-11.indd 1 5/16/11 12:57:12 PM


CALIFORNIA’S MINIMUM WAGE HIKE BRINGS MANY CHANGESBy Gail Cecchettini Whaley, J.D.; CalChamber Employment Law Counsel/Content

In early April, Governor Brown signed SB 3, a bill that will increase the minimum wage in California to $15 per hour by 2022. The governor’s action makes California the first state in

the nation to commit to raising the minimum wage to $15 per hour statewide. Large businesses with 26 or more employees will begin complying in 2017 and will reach $15 per hour in 2022. Small businesses with 25 or fewer employees will not be required to begin the scheduled increases until 2018 and will have until 2023 to reach the $15 per hour rate.

Date Employers With 26 Employers With 25 or More Employees or Fewer Employees

01/01/2017 $10.50 per hour $10 per hour

01/01/2018 $11 per hour $10.50 per hour

01/01/2019 $12 per hour $11 per hour

01/01/2020 $13 per hour $12 per hour

01/01/2021 $14 per hour $13 per hour

01/01/2022 $15 per hour $14 per hour

01/01/2023 $15 per hour $15 per hour

Prepare for the minimum wage increase by analyzing other pay practices that might be affected.

Until the minimum wage reaches $15 per hour, the governor has the authority to suspend increases based on current econom-ic conditions. However, these “offramps” are discretionary and would come into play only if there are declining state revenues from sales tax; there is a decline in the labor market; or there is a budget deficit (this offramp is permitted to occur only twice).

Once the minimum wage reaches $15 per hour for all business-es in 2023, wages could then be increased each year up to 3.5 per-cent (rounded to the nearest 10 cents) for inflation, as measured by the national Consumer Price Index.

Employers need to prepare for the minimum wage increase and examine other pay practices that might be affected by the increase. Hint: There are more than you might think!

• Minimum wage• Overtime rate• Exempt/nonexempt• Notice requirements• Meals and lodging• Piece-rate employees• Draws against commissions

• Tools/equipment• Subminimum wage

This white paper covers just a partial list of pay practices that can be affected by the minimum wage hike. CalChamber members can visit this HRCalifornia page for the full list of pay practices and best practices.

Overtime

The minimum wage rate change affects overtime. Effective January 1, 2017, employees who work for minimum wage and perform work that qualifies for overtime must be paid $15.75 per hour for time and one-half or $21 per hour for double-time.

Classifying Employees

The minimum wage rate change affects the classification of employees as exempt versus nonexempt. For an employee to qualify under the commonly used administrative, executive or professional exemptions from overtime, the employee must meet the salary-basis test (which means the employee’s salary must be no less than two times the state minimum wage for full-time employment) in addi-tion to meeting all other legal requirements for the exemption.

Review exempt classifications to ensure that employees meet the minimum salary requirements…

Under SB 3, that amount will rise from the current annual salary of $41,600 to $43,680 in January 2017 for employers with 26 or more employees. By 2023, that amount will rise to at least $62,400 for all employers. This works out to an increased cost to employers of $20,800 per exempt employee from the current salary threshold.

Importantly, employers will also need to pay attention to the new federal overtime rule under the Fair Labor Standards Act. The new rule changes the salary level that must be met before an employee can be exempt from overtime.

On December 1, 2016, the minimum threshold will increase to an annual salary of $47,476 ($913 per week). This will apply to nearly all employees; an employee paid less than this threshold amount will be guaranteed overtime pay. The federal minimum salary threshold will be automatically updated every three years with the first automatic update occurring January 1, 2020.

There will be periods of time over the next few years where the federal salary threshold is higher than California’s. Employers

COLLECTOR’S INK | WINTER 2016-17 13 13 WINTER 2016-17 | COLLECTOR’S INK

COURT BLOCKS FEDERAL OVERTIME RULEBy Gail Cecchettini Whaley

Last week, a federal court in Texas issued a nationwide preliminary injunction blocking the U.S. Department of Labor (DOL) from enforcing the new federal overtime

rule which was set to take effect on December 1.

The federal overtime rule has been controversial, as it more than doubled the current federal salary level that must be met before an employee can be classified as exempt from overtime under one of the so-called white-collar exemptions (the execu-tive, administrative and professional exemptions).

The federal overtime rule required a minimum salary of $913 per week, which is also higher than California’s mini-mum salary threshold.

A group of states joined forces in September on a lawsuit challenging the overtime rule, followed up with an October request to the federal court to stop the overtime rule before its December 1 effective date. The lawsuit claimed that the DOL overstepped its authority in enacting the rule.

Business groups also brought a lawsuit challenging the rule. The November 22 decision to block enforcement of the rule was a

victory for the states and business groups who had filed suit.

In granting the preliminary order to halt the rule, the court wrote that the states showed a “likelihood of success on the merits” of the lawsuit “because the Final Rule exceeds the Department’s authority.”

For now, the rule is stopped while the litigation continues.

What This Means for Employers

Because the federal overtime rule currently cannot be enforced, California employers should use the California salary test to determine whether an employee can be classified as exempt under the executive, administrative and professional exemptions.

The current minimum monthly salary test for most exempt executive, administrative and professional employees is no less than two times the state minimum wage for full-time employ-ment—$3,466.67 per month for 2016.

In addition to the salary test, California employees must meet a strict duties test to be classified as exempt.

Reprinted with permission from the California Chamber of Commerce, www.calchamber.com.

must comply with the law that gives the most benefit to the employee.

Employers should be mindful of the effect of the required salary threshold for exempt/nonexempt classifications and en-sure that employees meet the salary basis test for the particular exemption claimed. Misclassification is costly. Employers who are unsure if their employees are exempt or nonexempt should always check with their legal counsel.

Posters and Notices

The minimum wage rate change affects your notice requirements.

California employers must post a current official Minimum Wage Order in a conspicuous location frequented by em-ployees. A new notice will be needed for 2017 when the increase becomes effective.

California employers must provide each employee with a written itemized wage statement at the time wages are paid (Labor Code section 226). Among other mandatory information, the itemized wage statement must include all applicable hourly rates in effect during the pay period and the corre-sponding number of hours the employee worked at each hourly rate.

Employers in California must provide

nonexempt employees with a written wage notice at time of hire and again within seven calendar days after a change is made to any information in the notice (Labor Code section 2810.5).

Wage statements should include any change to employees’ pay caused by the minimum wage increase.

If an employee’s rate of pay, including overtime rate, will increase on January 1, 2017, due to the minimum wage increase, the employee must receive notice from his/her employer by January 7, 2017. The separate wage notice is not required if the employer has reflected the change on a timely itemized wage statement that meets all legal requirements.

Local Ordinances

Remember that local ordinances may affect your minimum wage obligations. Some cities and counties in California adopted their own local minimum wage rates that are separate from the state rate. This is part of a growing trend.

Note: Exempt/nonexempt classification is based on the state minimum wage, not local ordinances.

Best Practices For California Employers

Remember: California employers must pay employees no less than the state mini-mum wage per hour for all hours worked. Because California’s state minimum wage is higher than the federal minimum wage, employers will be required to pay the state rate. When state and federal laws differ, employers must comply with the more restrictive requirements.

• Display a poster that includes the current official Minimum Wage Order and update the poster when the increase goes into effect. CalChamber’s 2017 California and Federal Employment Notices poster will include the required minimum wage update.

• Update any necessary payroll documentation.

• Provide revised itemized wage statements in a timely manner when wages are paid and ensure the statements accurately reflect the new minimum wage increase.

• Provide employees affected by the minimum wage increase with an appropriate wage notice showing the change in the rate of pay, if required.

• The obligation to pay the minimum wage can’t be waived by any agreement, including collective bargaining agreements.


CAC PAC FUND

Visit https://www.efundraisingconnections.com/c/CalifAssoofCollectorsPAC/

CAC PAC FUND


CAC PAC FUND



WHO CAN APPLY?WHAT ARE THE REQUIREMENTS?

FIRST PLACE: $2,500SECOND PLACE: $2,000

THIRD PLACE: $1,500

ONLINE APPLICATION OPENSJANUARY 2, 2017

DEADLINE: MARCH 30, 2017

California Association of Collectors

Educational Scholarship Foundation

2017 Scholarship

Applications are open to highschool juniors & graduatingseniors who plan to enroll ina public or private college oruniversity, or trade school.

All applicants must write anoriginal essay about the

importance of establishing andmaintaining good financial credit

during your college years.

VISIT CACESF.ORG TODAY FOR MORE INFO!

CAC Online Session | Red Flag Rules Have Changed, Have You?Brown Bag Compliance Class January 25th, 2017 12pm-1pm

Presented by:

June Coleman, ESQ with Kronick, Moskovitz, Teidemann & Girard

Shawn Suhr, President, Continental Credit Control and CAC Executive Board Member

Kelly Parsons-O’Brien, President, Credit Bureau Associates, CAC President-elect/CFO

June Coleman will review the changes to the Identify Theft Resolution Act, she will also go over the CFPB Proposed Rules for handling ID Theft Claims.

Kelly and Shawn will be sharing their new procedures on how they handle written and verbal ID theft claims and teach you how they prioritize document received through E-Oscar to meet the new 10 day statute.

You will leave this class with 4 attorney approved sample let-ters that you can use in your new updated process for handling ID Theft Claims. This alone will be worth buying lunch for your compliance staff to listen to this class.

Please Note: June Coleman is not providing legal advice, but general educational information. You should consult with your own attorney for advice regarding your own specific circumstances.

Cost:

CAC Member - $99Non-member - $149.

Fees are per location for (additional attendees at your location may view the webinar on the same computer at no additional charge)

Approval in process for 1 MCLE.

To register go to www.calcollectors.net/events

Contribute to CACESF and Help a Young Student Achieve Their College Dream!Dear CAC Members,

As 2016 draws to a close, I am happy to officially announce the 2017 CAC Educational Scholarship Foundation essay contest.

As you know, CAC established our 501 (c) 3 Educational Scholarship Founda-tion (ESF) in 2005. Each year since then, we have awarded scholarships to three California graduating high school se-niors, totaling $70,000. The scholarship requires students to write an original es-say addressing The Importance of Estab-lishing and Maintaining Good Financial Credit During Your College Years.

We solicit essays from all California high schools, both public and private, and have awarded scholarships to public,

private and home schooled students. Scholarship winners have gone on to at-tend community colleges, state colleges, and prestigious private universities.

Beginning this year, the CACESF board of governors decided to host CACESF’s scholarship banquet during our annual October conference. This means that going forward, students will apply in their Junior year, and the finalists will be awarded in October of their Senior year.

However, in order to avoid skipping the class of 2017, we will be awarding a total of six scholarships this year—three to Juniors and three to Seniors—making the support from generous companies like yours even more important.

Since financial literacy is also a founda-

tion of the banking and finance industry, I hope you will join us in helping the youth of California have the opportunity to re-search, learn, and share the importance of good financial credit by donating to to this program. No amount is too small, and ev-ery dollar raised will help fund the college education of a promising young student.

The CAC ESF Federal Tax ID number is 56-2521491, and a donation form can be found on the foundation’s website at cacesf.org, or you can simply call the CACESF office to make a contribution at (916) 929-2125.

Sincerely,

Linda Guinn President, CAC Educational Scholarship Foundation




THIRD PLACE: $1,500





2017 Scholarship








THIRD PLACE: $1,500





2017 Scholarship








THIRD PLACE: $1,500





2017 Scholarship






Continuing Success Into The New YearKimberly Andosca CAC Executive Director

THANK YOU for your member-ship in the California Association of Collectors for 2016. It’s been

another incredible year for CAC. Your Board of Governors worked tirelessly, along with your advocate and attorney, to advance the collection industry with the power of your state association.

This year, CAC:

• Aggressively pursued legislation that would protect and benefit YOU, as a member of the collection industry.

• Represented you in federal hearings of the CFPB.

• Kept you updated regarding the latest laws and regulations.

• Provided YOU educational opportunities to understand the latest trends reshaping the industry.

• Gave YOU free access to a legal advocate that knows the collection industry.

• Connected YOU to a network of collection industry professionals who share your business concerns.

• Connected YOU to top providers of services to help your business thrive.

Legislative advocacy to promote and protect the collection industry in California is the number one priori-ty of CAC. CAC continues to work to increase the value of your membership through legislative and legal represen-tation as well as tangible membership benefits such as:

• Collector’s Ink – published 4 times each year

• E-Ink – emailed with up-to-the-minute information several times each year

• CalCollectors Member’s Only Google Group

• Regional and webinar meetings bringing networking and education directly to you

• Annual Conference with education, updates and vendor innovations

• NEW for 2017 – CAC Annual Member Directory, Buyer’s Guide and Reference

Associations are formed to enable a group to accomplish together what cannot be done alone. Please renew your membership with CAC for 2017, so we can continue to use the power of the association to serve YOU and provide a strong voice in California for the collec-tions industry.

I encourage you to contact Mary Putterman at the CAC office at 916-929-2125 or [email protected] if you have any questions. We need your continued support to protect and build our industry.

Kim Andosca Executive Director

EXECUTIVE DIRECTOR’S REPORT

K E E P C A L M

A N D

R E N E W Y O U R

M E M B E R S H I P


CAC PAC Fund Contribution _______________________________________________________

Company

_______________________________________________________ Address City St. Zip

_______________________________________________________ Owner(s) name

_______________________________ Phone

_______________________________________________________ Email address

Member Challenge Donation: $1,500 annually

Please accept my one-time PAC Donation in the amount of $ ____________ Pease accept my monthly recurring PAC Donation of $ __________ Beginning on ___________ and authorized for _________ number of months.

Visa MasterCard American Express

Card Number ________________ _____________ Exp. Date Security number

________________________________________________________

________________________________________________________

Name Printed on Card

________________________________________________________ Signature

http://calcollectors.net/legislative/index.asp to have a recurring donation charged to your credit card.

Please complete and return this form with your payment to:

CAC PAC One Capitol Mall, Suite 800

Sacramento, CA 95814 Or by fax to (916) 444-7462

Questions? Contact Kim Andosca, CAC Executive Director, by

Phone: (916) 929-2125 or Email: [email protected] Contributions or gifts to CAC PAC are not deductible as charitable contributions for Federal Income Tax purposes!

You May Also Pay by Check (payable to CAC PAC) or go to


One Capitol Mall, Suite 800Sacramento, CA 95814