Global Vantage, They say they are based in California?

As if we didn't have enough problems already...


Collecting debt going overseas
David Lazarus

Wednesday, March 10, 2004

Companies that specialize in collecting old debts earn a total of about $16 billion a year.

They do this by agreeing to go after the money on behalf of corporate clients for a cut of the action, or by accepting a flat fee for the service, or by buying up outstanding bills for pennies on the dollar and then hounding consumers into coughing up some cash.

And now, debt collectors are quietly moving operations -- and hence access to the financial records of millions of U.S. consumers -- to places like India, the Philippines and the Caribbean, where workers are paid just a fraction of what they'd make in the United States and where tough U.S. privacy laws have no jurisdiction.

"It's an emerging trend and one worth watching," said Michael Ginsberg, president of the Maryland consulting firm Kaulkin Ginsberg, which advises the debt-collection industry. "It's too early to say where this is ultimately going to go, but it's being explored by a lot of people in the business."

This is yet another example of the outsourcing of people's personal information, a growing practice that California lawmakers examined during a six-hour hearing on Tuesday and that has spurred calls at both the state and federal levels for improved safeguards.

"When information is outsourced, the risk is higher that our identities are in danger," said state Sen. Liz Figueroa, D-Fremont, who chaired Tuesday's hearing in Sacramento.

The outsourcing of debt collection is particularly troublesome because these companies -- running the gamut from multimillion-dollar behemoths to small, privately held operations -- are not first and foremost in the business of protecting consumers' personal data.

These companies are about shaking people down for dollars and rely primarily on intimidation -- a threat of legal action -- to get what they want.

"Anything they make is found money for them," said Linda Sherry, a spokeswoman for Consumer Action in San Francisco, a nonprofit consumer watchdog. "That's why they're so aggressive in calling and writing people."

She added that while most consumers chased after by debt collectors "aren't the type whose identity you'd want to steal," all too often the collectors also pursue people with solid credit ratings who may have had financial difficulties in the past.

"We hear from quite a few people about old debts coming back to life," Sherry said. (She added that if consumers are hassled for any obligation dating back more than seven years, they should contact a lawyer; the statute of limitations for most such debt has run out.)

Because debt collection is extremely labor intensive, it's an industry that, like customer service, all but demands to be farmed out to the cheapest possible workforce.

The largest debt collector in the United States is a Pennsylvania company called NCO Group, which last month reported quarterly profit of $10.3 million, up from $6.8 million a year earlier.

NCO is in the final stages of acquiring RMH Teleservices, a major operator of call centers. The company thus expects to combine its already extensive debt-collection services with a small army of call-center workers in Canada, India, Barbados and the Philippines.

Paul Weitzel, NCO's executive vice president of corporate development, said overseas facilities account for about 5 percent of his company's debt- collection activities. Within five years, he said, at least a quarter of all of NCO's debt collection will be conducted from abroad.

Weitzel said this is because NCO's 50,000 clients -- he declined to name even one -- are demanding greater savings through lower costs, and because NCO can't find a sufficient number of U.S. workers "who will take the job for what we're willing to pay."

"As long as clients want to cut costs and we can't fill seats in the United States, you're going to see this trend continuing," he said.

This means that a growing number of overseas workers will have access to the names, addresses, Social Security numbers and, in some cases, complete credit histories of U.S. consumers. Weitzel, however, was quick to note that data can be compromised anywhere.

"I read something about a woman in Pakistan who threatened to release medical information unless she got what she wanted," he said. "That sort of thing could happen in the United States."

Yes and no. The case of the Pakistani medical transcriptionist and her threat against UC San Francisco Medical Center, a story I broke late last year, illustrates what can go wrong when confidential info is exported abroad.

It also shows how powerless U.S. authorities are to remedy such situations. The transcriptionist, Lubna Baloch, is still free in her home of Karachi and to date has faced no consequences for her actions, which UCSF has called one of the most serious security breaches in the hospital's history.

Dennis Sholl is chief executive of Global Vantedge, a Larkspur debt- collection firm that outsources all its work to 750 staffers in a suburb of New Delhi. Like NCO's Weitzel, he said the challenges of the business make it difficult to operate from within the United States.

For this reason, he said he expects as much as 40 percent of all debt collection in this country to make its way overseas in coming years.

"There's a very strong trend in that direction," Sholl said. "At the end of the day, it's a free market, and the realities of the economics of this won't go away."

Of the many good reasons not to go into debt, invasion of privacy probably wouldn't figure highly in most people's minds.

It should now.

Check out there website www.gvedge.com

They are hesitant to give out info on their company. They want to start the collection process before you recieve any wrtten information from them.

Check out there website www.gvedge.com

They are hesitant to give out info on their company. They want to start the collection process before you recieve any wrtten information from them.

Check out there website www.gvedge.com

They are hesitant to give out info on their company. They want to start the collection process before you recieve any wrtten information from them.

Check out there website www.gvedge.com

They are hesitant to give out info on their company. They want to start the collection process before you recieve any wrtten information from them.

They told me I had to pay a certain amount and I gave them an offer for a thrird of that amount as the first paymeny. They refused and said that they could not accept it and if I sent in the payment it would not go toward my account. I may be wrong but it is my understanding that a collector has to place anf amount you send them toward the debt. Any advice would be greatly appreciated.