Thursday, June 30, 2022

Debt chaser Collection House goes bust

 

Debt chaser Collection House goes bust

Liam WalshReporter

Collection House, once one of Australia’s biggest debt chasing agencies, has tumbled into administration after a series of spiralling blows in the past couple of years.

The appointment of administrators covers ASX-listed Collection House and not the subsidiaries, raising questions about the future of hundreds of staff members.



“Our intention is to undertake an urgent process seeking options to restructure and recapitalise the Collection House business,” administrator John Park of FTI Consulting said on Thursday morning. He was appointed along with Ben Campbell and Kelly Trenfield.

Brisbane-based Collection House, which had 652 staff as of December, had been desperately selling assets to avoid a cash crunch in the past two years.

But as flagged by The Australian Financial Review on Wednesday evening, it faced even further strain because one of its few remaining assets was hocked – a stake in Volt Bank – and Volt had earlier that day abandoned its banking ambitions.

Collection House over the years chased down debts on behalf of clients including the Australian Taxation Office or power companies. Another division also bought slabs of debt ledgers from institutions such as credit card debt – at a heavy discount from 1¢ to 35¢ in the dollar, for example – and tried to earn profits by recouping greater levels of money.

Industry sources had believed a failure of Collection House could set off negative waves throughout the sector.

One told the Financial Review on Thursday that it could make some businesses reluctant to outsource debt recuperation to agencies. It also raised deeper questions about whether margins were too weak for such “contingent” collection work, especially in recovering any excess debt above a certain level, he said.

“This is a long-time coming,” he said.

Started in 1992, Collection House initially made millionaires of co-founders including John Pearce, once No.1 ticket holder for AFL’s Brisbane Lions. It floated in 2000 and by 2001 was worth more than $500 million.

Its fortunes waxed and waned over the years, with sudden accounting shocks sapping investor faith. By the last half-year accounts, the outfit had posted a loss of $63.7 million and auditors KPMG warned of a “material uncertainty” about the company continuing as a going concern.

The business also had a mixed track record with regulators and consumer advocates. In 2006, it accepted an enforceable undertaking with the Australian Competition and Consumer Commission after trying to reap statute-extinguished debt between 2001 and 2004.

By the mid 2010s, practices had improved and the business was receiving praise from consumer groups.

But by 2019, under then-CEO Anthony Rivas who had worked in debt collection in the US and Mexico, the company was in the limelight for engaging in hardball tactics of both lowering the threshold for bankrupting people and also massively amplifying when it took such legal action.

Consumer group research showed its subsidiary Lion Finance had filed 512 federal court bankruptcy actions in the previous year, whereas rival companies filed no actions or had them in the single or double figures.

The move horrified former staff, who questioned the cultural change, and also alienated banks which are a source of debt for such agencies. NAB even cut off Collection House in 2019.

Mr Rivas resigned suddenly in 2019 and the Financial Review revealed he had subsequently soon sold all of his company stock for between $1.3 million and $1.5 million. Collection House had confirmed he had no restrictions on selling after leaving the organisation.

Collection House had tried to soften practices, including lifting the internal threshold trigger of initiating bankruptcy action to $20,000 from $7500. But it also suffered a series of shocks including taking massive hits to the value of debt ledgers, causing massive red ink.

Collection House had been cutting staff and offloading assets such as debt ledgers to rival Credit Corp in an effort to lessen its own bank borrowings and save cash. By April, it said it had largely reduced its senior bank debt by $52 million, with almost $5 million outstanding and secured against the Volt Bank shares.

Even the investment in assets such as Volt Bank, which cost $8.5 million, had caused head-scratching among former staff of the debt collector.

“It lost its way. It lost its identity,” one said.

Collection House’s last quarterly cash flow statement showed an operational cash burn of $4.2 million for the three months to March.

Chairman Leigh Berkley was not immediately available for comment.

Liam Walsh is a reporter with the Australian Financial Review Email Liam at liam.walsh@fairfaxmedia.com.au

This pretty much sums things up

Kurt Vonnegut documentary took Robert Weide 40 years to film Sydney Morning Herald. Anthony L: “So he was unstuck in time.”


1 day ago — The Great Resignation and the rise of remote work mean it's time for companies to radically rethink how they pick and evaluate our bosses.


Imagine that your job is to preserve every word and make it tell a story. Meet the lexicographers behind the OED 


This pretty much sums things up

The experts are lying to you - UnHerd.


That figures of authority are so often caught in lies has brought about an erosion of confidence in our institutions. I barely scraped a GCSE in Biology, but when esteemed scientific journals are publishing authors who maintain that “sex is a spectrum”, it gives the false impression that my understanding of the subject is superior to theirs.  Experts appear to have forgotten that the legitimacy of their claims is grounded in evidence and research, not by waving around a doctoral certificate.



 The impact of technology on finance: A new eBook - VOXEU CEPR: “Recent cutting-edge technologies such as machine learning and artificial intelligence, as well as the expansion of FinTech and BigTech companies into finance, have accelerated the digitalisation of financial services. The fourth report [Download Technology and Finance, the 4th Future of Banking report, hereDarrell Duffie, Thierry Foucault, Laura Veldkamp, Xavier Vives 27 May 2022] in the The Future of Banking series from the IESE Business School and CEPR focuses on three aspects: (i) the disruption of payment systems due to the emergence of digital currencies, with a particular focus on central bank digital currency; (ii) the benefits and risks of the use of massive data for the provision of financial services; and (iii) the electronification of securities trading and its effect on trading costs and market quality.

See also

What Makes Data Personal?

Montagnani, Maria Lillà and Verstraete, Mark, What Makes Data Personal? (June 4, 2022). UC Davis Law Review, Vol. 56, No. 3, Forthcoming 2023, Available at SSRN: https://ssrn.com/abstract=4128080 or http://dx.doi.org/10.2139/ssrn.4128080

“Personal data is an essential concept for information privacy law. Privacy’s boundaries are set by personal data: for a privacy violation to occur, personal data must be involved. And an individual’s right to control information extends only to personal data. However, current theorizing about personal data is woefully incomplete. In light of this incompleteness, this Article offers a new conceptual approach to personal data. 


Could TikTok Be A Search Engine? For Many Users, It Already Is

Search Engine Journal: “A new generation of web users is utilizing TikTok as a search engine. What does that mean for marketers and publishers?…The growing use of TikTok as a search engine stems from several factors:

  • Short attention spans
  • Unsatisfactory Google results
  • Visual learning styles..”


Reddit Has Hidden Search Tools

Lifehacker – Reddit’s search might be terrible, but you can make it better. “Reddit is an invaluable internet community, but when it comes to search, it’s far from perfect. This network of communities is full of useful information, on-point memes, and interesting debates, but trying to find the specific content you’re looking for is far more difficult than it should be (so much so that many users have taken to simply Googling their issue and adding the word “Reddit.”) But Reddit’s search can be more accurate and useful, if you know how to unlock its potential. Yes, the Google method does work—especially if you add “site:reddit.com” to the begging of your query—but taking advantage of Reddit’s advanced search filters will make your on-site searches more productive, too. The tricks are similar to the ones you can use wit Google to yield better search results, so perhaps a refresher is in order…”

See also via How to Geek – How to Search Reddit More Effectively – Reddit is essentially a fusion of a wide variety of internet resources. It’s like a combination of social media and the BBS/Usenet/forum discussions that used to be prevalent in the early days of the internet (except all fused together into one mega directory). It’s an absolutely massive platform that includes discussion focused on everything from breaking news to incredible niche hobbies. Don’t get us wrong: There is a lot of dumb (and even awful/objectionable) content on Reddit, but there’s also home to a huge amount of helpful user-generated content. From identifying what plants are growing in the flower beds of your new home to figuring out what the obscure error code your 3D printer is throwing out means, there’s a good chance you can use Reddit to do it. In fact, the habit of leaning on Reddit for organic human-driven answers has become so widespread that people have taken to appending their Google search results with the word “reddit” to help filter regular Google search results…”



Where Did the Long Tail Go? The Honest Broker


If aliens are calling, let it go to voicemail Vox


Alexa to add voices of your deceased loved onesThe Hill. Quite a market for that now, I would say.

 

Tax excess margins Interfluidity

The Whispers Are Growing: Google Search Is Broken

All that you touch
You Change.

All that you Change
Changes you.

The only lasting truth
Is Change.

God

Is Change 


Vietnam Imprisons Leading Environmentalist on Tax Evasion Charges The Diplomat 


Is standardisation the secret weapon against trade finance fraud?


L.A. needs 90,000 trees to battle extreme heat. Will residents step up to plant them? Los Angeles Times


Agnes Callard imagines her own cancellation. "I want my friends...to stand by, remain silent, and do nothing. If you care about me, let them eat me alive"  - let them eat me alive  


How Ghostwriting Affects A Writer’s Own Novels

Daniel Paisner: Ghostwriting has "helped me see what it takes to succeed at the very highest level—or, at least, they’ve left me thinking about it. Also: what it means to stumble, how to hold a dream out in front of you and find a way." - The Millions

Publishing Is Afflicted With Groupthink

People in publishing are increasingly nervous of causing offence. I have been told that some books are being rejected not because the publishers don’t think the books have an audience, but because they don’t want to upset an online mob. - Prospect


The Decline Of The Secondhand Book Business

The increase in online buying has meant a reduction in the number of physical outlets, but those that remain have a beadier eye for bargains unsuspected by their owners. The trade has lost much of its charm and romance, and the number of eccentrics has dwindled. - The Critic


Talking About “The Book Of Mormon” With Three Guys Who’ve Been In Its Cast For All 4,000 Broadway Performances

Graham Bowen (dance captain and swing), Lewis Cleale ("all the old white guys"), and John Eric Parker (Mutumbo) "joined a reporter at the theater one afternoon last week to discuss the musical's staying power, and how it's changed with the times." - The New York Times

The Truth About Screaming Teenage Fans

"We have seen so many screaming girls. Every time we see them, we’re like, 'They’re screaming.' And that’s it. Yet the screaming fan doesn’t scream for nothing and screaming isn’t all the fan is doing. It never has been." - The Guardian (UK)


The Whispers Are Growing: Google Search Is Broken

The frustration has become a persistent meme: that Google Search, what many consider an indispensable tool of modern life, is dead or dying. For the past few years, across various forums and social-media platforms, people have been claiming in viral posts that Google’s flagship product is broken. - The Atlantic


Culture As A Weapon Of War, Or Division, Around The World

"Culture really does become a matter of life and death, then, when a society is under pressure. This can be for good or for ill: how narrative is shaped can, of course, be damaging – or dishonest." - The Guardian (UK)

“Why don’t you go jump off a cliff?”

In today’s world, the hatred directed towards high-profile victims-du-jour is such that inspires some poor schnook to load his (it’s almost always a “his”) garage with firearms and make an attack. Then we can say it wasn’t us, it wasn’t 
our hatred, it was a “lone wolf.” Last week there was an assassination attempt on a Chief Justice, the following day, a hostile mob gathered around the home of a second Supreme Court justice and threatened to target her children. Nothing “happened,” but the ritual had a chilling familiarity. How much of this public unleashing of hatred is an attempt to incite a “lone wolf” attack, as happened in the case of the miserable assassin wannabe, Nicholas Roske? Is there a unacknowledged hope that if we stoke an atmosphere of public hatred someone will eventually tip over the top and “do something”?

The Rich Get Richer: Good God, I can’t publish this…

 In terms of dangers, such as viruses, fraud or identity theft, I don't think we were thinking about that at all when we got started. If we had been worried about that, the net might have been better today, but we might not have even got there.



An Iron Curtain descends on Europe and the USA Gilbert Doctorow

We repeat . . . 

An Iron Curtain descends on Europe and the USA Gilbert Doctorow


The Rich Get Richer Jed S. Rakoff, New York Review of Books 


Good God, I can’t publish this… The Critic


ProPublica: Ten Ways Billionaires Avoid Taxes On An Epic Scale


Ask yourself, is your media diet smart enough to keep you ahead of the pack?

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Despite All This Year's Stock Market Woes, Wall St's "Fear Index" is Holding


Tessa Davis (South Carolina), Taxing Choices, 16 Fla. Int'l U. L. Rev. __ (2022):

Tax has a choice problem. At all stages of the making of tax, choice plays a role. Lawmakers consider how tax will impact the range and appeal of choices available to an individual. Scholars critique how tax may drive an individual toward or away from a given choice. Courts craft stories of how an individual had either free or deeply constrained choice, using their perception of the facts to guide their interpretation of tax law. And yet for all the seeming relevance of choice to tax, we have no clear definition of what we mean when we talk about choice or agreement on whether and when it matters. 


Heaven knows we’ve been through enough acronyms in this market cycle. 

FOMO — the Fear Of Missing Out, drove lots of investors, professional and amateur, in to spicy asset classes. No one wanted to be the last person to get in to the next big thing while excess money was sloshing around the global financial system. 

TINA — There Is No Alternative — went a little further. It encapsulated the notion that fund managers had no choice but to buy risky stocks because boring old bonds were yielding so little, or indeed were costing money to hold even before you take inflation in to account. It’s “the market made me buy this rubbish”, but with a slightly sassier name.

But it seems we have not yet reached peak acronym. With bond yields now much higher, TINA is no more (RIP), and the market mood has turned. “We went from Fear of Missing Out to Fear Of Holding On,” as Peter Tchir, head of macro strategy at Academy Securities, put it this week. 

For my sins, I read a lot of research from banks and investors. But “from FOMO to FOHO” is a new one on me.

 Tchir is referring here to the dreaded bitcoin — an “asset” for want of a better word that is maturing like a fine glass of full-fat milk on a summer’s day.


The Wall St. Billionaire and GOP Mega-Donor Gaming the Tax System ProPublica


Tesla sued by former employees over ‘mass layoff’ Reuters 



Vietnam Imprisons Leading Environmentalist on Tax Evasion Charges The Diplomat 


There is a solution to public sector pay disputes if the government wants to find one

I posted this thread on public sector pay rises on Twitter this morning: A Treasury minister said yesterday that ‘We are taking a responsible stance
Read the full article…

Britain is £3bn fraud capital of the world: Probe reveals 40m Britons have been targeted by scammers this year... but just 2% of our police are investigating the crime plague


A scammer can make nearly £1 million a day through fraudulent online adverts


Very interesting Edward Nevraumont review of *Talent*

The review makes many points, here is one excerpt:

 Everywhere I have worked, the organization’s hiring processes were tilted in favor of experience over intelligence. Interviews include behavioral questions or assessments of specific skills. Rarely is anyone on the hiring loop running problem-solving sessions that require the candidate to demonstrate how they might deal with the real-world challenges they will encounter in the workplace.

And:

Most of the time you can win candidates by getting the basics right:

  1. Reach out to people, don’t wait for them to come to you.
  2. Build relationships before you need them.
  3. Develop followership (so people that work with you once will want to work with you again).
  4. Get candidates excited for the job before you start screening them.
  5. Make your workplace a good place to work for smart and talented people (which is NOT the same as making it a “good place to work” generally, or anything from the HR/PR lists.)
  6. Be the type of manager that top talent will want to work for.
  7. Ensure that you have someone selling the candidate once you know you want to make an offer and start the selling process before the offer is made.
  8. Be polite.
  9. Be fast.

Interesting throughout, though I feel the author significantly overestimates the extent to which we think the current talent assessment market is efficient


Chinese security official calls for crackdown on gangs following Tangshan attack South China Morning Post


EU champion Airbus has deep links to Chinese military industrial complex, report says Politico