Diversified Recovery Systems Inc. Online Presentation

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1. Realistic Agency Expectations

    National average success rate for agencies ranges between 25-35%
    65-75% corresponding failure rate is the national norm
    Account age at time of placement is the single most important factor contributing to           collection likelihood
    “The older they are, the colder they are”
    Time to collect varies from a few days to a few months
    Without initiating litigation likelihood of recovery drops by over 75% after 6           months
    Depending on jurisdiction, the time required for lawsuit ranges from 4 months to           more than 17 months

2. Collection Strategies That Maximize Recovery

    Contact intensive work standards
    Private investigator contact with debtors

Via telephone

Personal site visits
    Local attorney demand letters
    Subscription-based online search engines
    Public record searches
    Real property holdings
    Business organization and corporate officers/agents
    Affiliated companies
    Secured creditors

UCC-1 filings and other liens/encumbrances
Civil record searches

Pending litigation

Existing judgments

3. Debtor Accounts that Pay

   Over 90% of all payments cleared electronically via ACH debit order
   Electronic processing reduces time required to clear funds by >80%
   Specially designated Client-Trust account used for clearing payments
   Optional electronic client remittance available
   DRS belongs to the Southern Financial Exchange

4. Debtor Accounts that DON’T Pay

    No obligation legal review given with recommendation and pricing estimate of           litigation costs to client
    Steps taken to ensure they “don’t get away with it” include:

Derogatory reporting to a national credit bureau*

Complaints filed with local, state, or federal organizations and/or regulatory bodies*

5. Contingency Rate v. Agency Rate-of-Return

    The terms “rate” and “cost” are not synonymous in collections
    Rate represents the fee agency charges
    Cost is measured as a function of your “net-back” after subtracting agency fees           and the face value of uncollected accounts
    Lower rates come at the expense of more comprehensive (expensive) collection           tools
    Diminished collection tools result in lower liquidation rates, which means less money           back to the client

6. Value Pricing Philosophy

    No coupon books, no pre-payments, and no hidden charges
    Fully contingent collections. If we don’t collect, you don’t pay!
    Tiered rate schedule provides lower rates for larger accounts
    Frequent Assignment Discounts* provide additional savings as your collection needs           increase

7. Commercial Recovery Programs

    Amnesty Demand Service
    B2B Audit Program
    Commercial Recovery Program
    International Recovery Program
    Collection Litigation

8. Client Access

    24 hour online access to accounts provides ability to monitor progress and activity            on files
    Ability to assign new claims online
    Communicate directly with individual collectors working your filesters

9. Client Eductaion and Support

    Progression of Delinquency
    Risk Indicators
    In-house Policy Consulting

           IHP Review
           Collection Letters
           Call Scripts
           Events Timeline
           Use of COD
           Use of Credit Hold
           Use of Salespeople in Collection Process

10. Collection Inventory Management

    Assignment Criteria
           Collectors are segregated into four distinct balance categories to ensure consistent             efforts on all files
                  1. Small balance: accounts $200-$1,000: Maximum of 400 files
                  2. Mid-balance: accounts $1,000-$3,000: Maximum of 275 files
                  3. Large balance: accounts $3,000-$15,000: Maximum of 150 files
                  4. Executive balance: accounts over$15,000: maximum 75-100 files

    Inventory Assignment
           Collector inventory is balanced daily using alternating file assignment by category
           “Paid in full” and “Settled in full” accounts are replaced before alternating              assignment begins
           “Top Feed” methodology ensures that collectors are rewarded for file liquidation              with additional inventory

    Non-Performing Inventory
           Files without payments are reviewed for transfer at 30 day intervals
           Non-performing files are transferred (“dropped”) to a collector in the next-lowest              balance parameter
           Collectors are paid a higher commission rate on “drop” files
           “Drop file” methodology creates a secondary, even tertiary placement benefit for              clients from a single agency partner

11. General Business

    Electronic Banking & Funds Clearing
           ACH processing
           Electronic exception reports daily
           Credit card processing; funding within 24 hours without charge-back or dispute               possibilities

    Client Trust Accounting
           Separates agency funds from client’s money
           DRS remits from this account as evidence of use
           Account audited monthly by outside accounting firm

    Disaster Recovery
           All system-critical computer & phone systems have battery back-up systems
           Collection system data backed up to DAT daily
           Fireproof storage system specifically designed to protect digital media up to 1500              degrees for 4 hours
           Sequential overlap back up schedule creates 4 levels of data redundancy

12. Professional Associations

    Southern Financial Exchange
    American Collectors Association
    LA Collectors Association



Attention Due to Windows XP SP2 security protection, this page might not display fully functional. If so, please click the and Allow the Blocked Content to be activated and viewed.
1. Realistic Agency Expectations National average success rate for agencies ranges between 25-35% 65-75% corresponding failure rate is the national norm Account age at time of placement is the single most important factor contributing to collection likelihood *“The older* they are, the colder they are” Time to collect varies from a few days to a few months Without initiating litigation likelihood of recovery drops by over 75% after 6 months Depending on jurisdiction, the time required for lawsuit ranges from 4 months to more than 17 months** 2. Collection Strategies That Maximize Recovery Contact intensive work standards Private investigator contact with debtors Via telephone Personal site visits Local attorney demand letters Subscription-based online search engines Public record searches Real property holdings Business organization and corporate officers/agents Affiliated companies Secured creditors UCC-1 filings and other liens/encumbrances Civil record searches Pending litigation Existing judgments 3. Debtor Accounts that Pay Over 90% of all payments cleared electronically via ACH debit order Electronic processing reduces time required to clear funds by >80% Specially designated Client-Trust account used for clearing payments Optional electronic client remittance available DRS belongs to the Southern Financial Exchange 4. Debtor Accounts that DON’T Pay No obligation legal review given with recommendation and pricing estimate of litigation costs to client Steps taken to ensure they “don’t get away with it” include: Derogatory reporting to a national credit bureau* Complaints filed with local, state, or federal organizations and/or regulatory bodies* 5. Contingency Rate v. Agency Rate-of-Return The terms “rate” and “cost” are not synonymous in collections Rate represents the fee agency charges Cost is measured as a function of your “net-back” after subtracting agency fees and the face value of uncollected accounts Lower rates come at the expense of more comprehensive (expensive) collection tools Diminished collection tools result in lower liquidation rates, which means less money back to the client 6. Value Pricing Philosophy No coupon books, no pre-payments, and no hidden charges Fully contingent collections. If we don’t collect, you don’t pay! Tiered rate schedule provides lower rates for larger accounts Frequent Assignment Discounts* provide additional savings as your collection needs increase 7. Commercial Recovery Programs Amnesty Demand Service B2B Audit Program Commercial Recovery Program International Recovery Program Collection Litigation 8. Client Access 24 hour online access to accounts provides ability to monitor progress and activity on files Ability to assign new claims online Communicate directly with individual collectors working your filesters 9. Client Eductaion and Support Progression of Delinquency Risk Indicators In-house Policy Consulting IHP Review Collection Letters Call Scripts Events Timeline Use of COD Use of Credit Hold Use of Salespeople in Collection Process 10. Collection Inventory Management Assignment Criteria Collectors are segregated into four distinct balance categories to ensure consistent efforts on all files 1. Small balance: accounts $200-$1,000: Maximum of 400 files 2. Mid-balance: accounts $1,000-$3,000: Maximum of 275 files 3. Large balance: accounts $3,000-$15,000: Maximum of 150 files 4. Executive balance: accounts over$15,000: maximum 75-100 files Inventory Assignment Collector inventory is balanced daily using alternating file assignment by category “Paid in full” and “Settled in full” accounts are replaced before alternating assignment begins “Top Feed” methodology ensures that collectors are rewarded for file liquidation with additional inventory Non-Performing Inventory Files without payments are reviewed for transfer at 30 day intervals Non-performing files are transferred (“dropped”) to a collector in the next-lowest balance parameter Collectors are paid a higher commission rate on “drop” files “Drop file” methodology creates a secondary, even tertiary placement benefit for clients from a single agency partner 11. General Business Electronic Banking & Funds Clearing ACH processing Electronic exception reports daily Credit card processing; funding within 24 hours without charge-back or dispute possibilities Client Trust Accounting Separates agency funds from client’s money DRS remits from this account as evidence of use Account audited monthly by outside accounting firm Disaster Recovery All system-critical computer & phone systems have battery back-up systems Collection system data backed up to DAT daily Fireproof storage system specifically designed to protect digital media up to 1500 degrees for 4 hours Sequential overlap back up schedule creates 4 levels of data redundancy 12. Professional Associations Southern Financial Exchange American Collectors Association LA Collectors Association