Skip Tracing in the Caribbean: Three Alternatives

150628 i2International business-to-consumer (B2C) debts, whether in connection with student loans, medical files or online purchases, are difficult to collect. The older the debts, the more likely it is that the debtor moved location, a telephone number or cell phone is not accurate anymore, or that email addresses have changed. Let alone the complicated matter of enforcing payment legally due to differences in among others legal systems and economic means of the individual debtor.

If the debtor cannot be located, debt collection agencies generally intent to locate the debtor, which in the debt collection business is called Skip Tracing. Official and public data may be available to trace, and often enhanced systems are used.

As I pointed out last week in the previous blog post about skip tracing, for skip tracing in the Caribbean one faces challenges of which the following three are the most common: improper registration systems, the fact that information is often not accessible, and the fact that people move around overseas.

How can we bypass these challenges and trace individuals effectively?

1. Internet

I indicated this already in a previous blogs post. As a start, google your debtor. Use all the info you have to create search combinations as unique as possible so that the likelihood of useful results increases. The search combinations may include first name, last name, nickname, location, former location, country, date of birth, profession or industry your debtor is active in; basically any information available. Often an initial search gives additional info which can be used to narrow the Google search further.

2. Social Media

Use the power of Social Media. Facebook, Linked-In, Twitter, Google+, Pinterest, Instagram. The majority of the people have online profiles with at least one of the Social Media. This might give you an indication as to debtor’s actual residence location, it might provide info about debtor’s surroundings and sometimes even contact details.

3. Word-to-mouth info

It might be cliché, but in the small-sized Caribbean nations, perhaps not everybody knows everybody, but a lot of people do know each other personally. So you might get well away enquiring locally by speaking to people in the debtor’s near surroundings if you know family names, previous employers, or previous locations.

There are three alternatives for the challenges of skip tracing: the Internet in general, Social Media in particular and Word-to-mouth info.

If you are interested in learning more on the subject of skip tracing in the Caribbean let’s connect on Linked-In or follow me on Twitter.

To participate in conversations about debt collection in Latin America & the Caribbean please join the Linked-In Group Debt Collection Latin America.

Skip Tracing in the Caribbean: Three Challenges Explained

140621 caribbeanInternational business-to-consumer (B2C) debts, whether in connection with student loans, medical files or online purchases, are difficult to collect. The older the debts, the more likely it is that the debtor moved location, a telephone number or cell phone is not accurate anymore, or that email addresses have changed. Let alone the complicated matter of enforcing payment legally due to differences in among others legal systems and economic means of the individual debtor.

If the debtor cannot be located, debt collection agencies generally intent to locate the debtor, which in the debt collection business is called Skip Tracing. Official and public data may be available to trace, and often enhanced systems are used.

Generally speaking, for skip tracing in the Caribbean one faces a couple of challenges, which can make it hard and sometimes impossible to locate individuals. I am pointing out three of them.

1. Improper registration systems

Now we must be careful not to generalize, but in several Caribbean nations we see that official registration systems are inefficient and in accurate. Although there might be a formal obligations to properly register or update domicile information, in practice this is poorly carried out in practice and hardly monitored by local authorities as to correctness.

2. Information is often not accessible

As is typical for nations considered offshore locations, official information on private persons publicly available or accessible in Caribbean nations is generally limited, and not in the least case because accessibly is regulated and protected by local law.

3. People move around, and often overseas

As the majority of the Caribbean nations are island states, small in size, and often affiliated or even integral part of an overseas (former, and most commonly, European) “motherland” (like the British Virgin Island and Britain, Curacao and the Netherlands, Guadeloupe and France), and there are strong cultural and economic ties between the Caribbean nations and countries overseas, many people spend at least part of their lives (studies or work) overseas. For several reasons, often people do not change domicile details when they move or move back and may continue to be registered and thus officially live outside the Caribbean, which makes it hard to impossible to determine actual location.

Skip tracing in the Caribbean means facing challenges. The three most common challenges in my view are improper registration systems, the fact that information is often not accessible, and the fact that people move around overseas.

If you are interested in learning more on the subject of skip tracing in the Caribbean let’s connect on Linked-In or follow me on Twitter.

To participate in conversations about debt collection in Latin America & the Caribbean please join the Linked-In Group Debt Collection Latin America.

Collecting Offshore in the Caribbean and Central America

150614 Offshore 1It is not uncommon companies decide to run (part of) their business from an offshore location. The reasons can be tax-related, for asset protection, or can have a commercial or servicing background.

The businesses on offshore locations are often run by a trust company, a fiduciary services provider that acts as the local managing director and keeps the company in good standing.

So it can be that you closed your commercial deal in Europe, North America or South America, but you paper the deal with a company in Panama, Belize, or from a nation on a Caribbean island like the British Virgin Islands, Curacao, Cayman Islands, Antigua & Barbuda or the Bahamas. You will subsequently also invoice the company at the offshore location.

When the invoices become overdue, legally you will need to do your collection efforts at the location your contract partner is formally established, which is consequently also Panama, Belize, or the Caribbean nation.

Collecting from offshore locations in the Caribbean or Central America often cause serious difficulties:

  1. The location may be remote from the creditor’s perspective;
  2. The ultimate decision takers on the debtor’s side or not based at the location;
  3. Legal systems at the offshore location are unknown to the creditor;
  4. Information available on financial status, assets, and people involved is often limited or unavailable;
  5. All communication goes through a third party, the trust company, who only has limited responsibilities and obligations.

How can you optimize your collections and minimize overdue collections and eventual write offs in offshore locations in the Caribbean or Central America?

  1. Your paperwork should be in excellent shape. You know where your contract party is based, so make sure beforehand that the contracts, order forms, and invoicing complies with local standards so that, in case necessary, you have solid file for enforcement of claims;
  2. If legally possible in accordance with the laws and regulations of the jurisdictions involved, make sure that at least one of the beneficial owners or related companies who are not at the offshore location signs as guarantor in case of default on the side of your offshore-based client. It will give you the possibility to claim from several parties who may be in much more favorable jurisdictions to enforce overdue payments;
  3. The trust company, as the trusted third party who manages the offshore company, is the gatekeeper and a good and continuous relationship with the trust company is essential. If you do not manage to collect yourself then turn to a third party account receivables provider who does have the relationships in the trust business, as this often makes it easier to get through and get outstanding invoices paid.
  4. As a general rule, do not wait too long if you see payment behavior or communication is deteriorating. The longer you wait, the more difficult it becomes to collect. Sometimes trust company have even stepped down as managing director or companies are dissolved. International and local law give little to no legal options when that happens to claim the unpaid invoices from anyone else and then usually it becomes impossible to still collect.

For several reasons it can be a challenge to collect on your (overdue) invoices from companies that are based on offshore locations in the Caribbean or Central America. To optimize your collections and minimize overdue collections and eventual write offs you should make sure your paperwork is in excellent shape, that a guarantor signs off on payment obligations in case of default on the side of the offshore-based company, you have and maintain a good and continuous relationship with the trust company that manages the offshore company, and you do not wait too long with taking action if payment behavior and communication deteriorates.

If you are interested in learning more on the subject of debt collection in offshore locations in the Caribbean and Central-America (like Panama and Belize) let’s connect on Linked-In or follow me on Twitter.

To participate in conversations about debt collection in Latin America & the Caribbean please join the Linked-In Group Debt Collection Latin America.

Property management in Latin America & the Caribbean: six reasons to improve collections

depas 4Property management is a demanding business. Often an administrator, a property manager, manages the common affairs of multiple unit complexes and is a key figure in keeping the common areas of the complex in good standing on behalf of the homeowners association.

The property manager is also responsible for collecting the monthly maintenance fees from the homeowners.

The majority of the property managers I speak to all over Latin America and the Caribbean have delinquent accounts in their portfolio. This reaches from a single bad payer to entire unit blocks that irregularly pay or do not pay at all.

In most of Latin America and the Caribbean it is unusual that the collection of maintenance fees is outsourced to an account receivables management provider or later on to a debt collection agency.

In the major cities and the tourist areas there is however an opportunity to improve the financial health of the homeowners associations and a business opportunity for accounts receivables management providers and debt collection agencies to fill the gap.

Reasons for property managers to outsource collections of maintenance fees to professional account receivables management providers and debt collection agencies are the following.

  1. It will result in increase of cash flow and more funds for the association to improve the quality of common areas and to invest in common affairs;
  1. It means less time spent for the property manager on collections and more time spent on property management;
  1. For debt collection, if your debt collection agency works on a contingency basis and charges and effectively collects interest and collection fees, your costs of involving a third party debt collection agency may be minimal;
  1. Giving the collections out of hands to a third party can improve the property manager’s relationship with the homeowners, as he is not the “bad guy” anymore chasing homeowners for money, but rather the outsource party is;
  1. It adds professionalism to the homeowners association’s financial housekeeping and improves collection processes;
  1. It will prevent more people from falling into bad payment behavior, as it is a clear regulative message towards all paying homeowners that the collection process is properly taken care of, and towards the bad payers that irregular or non-payment of maintenance fees is not tolerated.

There is an opportunity to improve the collection processes of homeowners associations all over Latin America and the Caribbean by outsourcing collections to professional account receivables management providers and debt collection agencies.

The reasons to engage professional account receivables management providers and debt collection agencies in the collection of property maintenance fees are: increase in cash flow, more time available to spent on property management, costs of outsourcing may be limited, it improves the property manager’s relationship with the homeowners, it adds professionalism to the collection process, and it prevents more homeowners from falling into bad payment behavior.

If you are interested in learning more on the subject of debt collection for property management let’s connect on Linked-In or follow me on Twitter.

To participate in conversations about debt collection in Latin America & the Caribbean please join the Linked-In Group Debt Collection Latin America.

Debt Collection in the Caribbean: Five Items for Your Checklist

2013-12-28 06.39.57The Caribbean is different in many ways. I am not (only) referring to its stunning vegetation, white sandy beaches and its beautiful blue and turquoise waters.

The majority of the nations in the Caribbean have cultural and economic ties with Europe, the US or Latin American mainland (like Mexico, Colombia, and Venezuela) but yet have their own social context, economy and lifestyle.

Also debt collection in the Caribbean has its own dynamics.

Here are five elements I would recommend you to keep on your checklist when you are in a situation where you are trying to collect a debt in the Caribbean.

Languages

There are almost as many languages in the Caribbean as there are nation states! I mention some of the main languages that are important from a business, professional and legal perspective: English, Spanish, French, Dutch, but also Papiamento and Creole languages.It is important to understand that depending on the island or the nation, one of these languages may apply and other might have little to no importance in daily affairs. Sometimes even on one island two languages apply but each in its respective section (an example is Saint Martin, which is divided in a French-speaking and a predominantly English and Dutch-speaking part).

Jurisdiction

Each of the nation states have their own jurisdiction. Some show similarities amongst each other – especially if they share a common historical background or if they are part of the same overseas nation or international organization (like the British Commonwealth). Others differ as much from each other as many of their (former) motherland countries do amongst each other. Some regions are fully independent and have their own jurisdiction; others are an integral part of (European) overseas nations (like Martinique which is a French overseas region and as such even part of the European Union; the British Virgin Islands which are a British overseas territory; or Bonaire which is a special municipality within the country of Netherlands, as opposed to Curaçao, which is an independent nation within the Kingdom of the Netherlands). The jurisdiction has its effect on legal systems and whether or not legal options might be a serious alternative for debt collection.

Possible offshore status

Several of the Caribbean nations are considered so-called Offshore Financial Centers (OFCs). Examples are the British Virgin Islands, Cayman Islands, Curaçao, Anguilla, Antigua and Barbuda, Aruba, Panama,and increasingly, Belize. This means that your claim may be on a company constituted in a Caribbean nation, whereby a trust company or fiduciary services provider manages that company, but whereby the actual decision makers or owners of the business are overseas. This has its impact on debt collection options and likelihood of success in claiming and enforcing payment, both amicably and legally.

Networking options

Networking in the Caribbean or working with local representatives, agents or lawyers is crucial and beneficial for you if you are looking to collect a debt in the Caribbean. Crucial because of the diversity between the Caribbean nations: as pointed out before, each nation has its own languages and jurisdiction. Beneficial because of the small size of the majority of the countries, which means that it can be relatively easy to reach your debtor quickly and directly (almost everybody knows each other or knows someone who knows…). Also, since Caribbean nations are generally small of size, and local business is heavily dependent on the outside world (financial services and tourism), service providers are international-minded which is helpful for you as an outsider.

Nature of your claim

As always, and the Caribbean is no exception, your chances of success are made or broken by the quality of your claim. Documentation much be in order, it should include signed contracts, order forms, invoices and filed correspondence. Also the size of the claim is important.

In order to successfully assess debt collection in the Caribbean you have to keep the following five elements on your checklist: languages, jurisdiction, possible offshore status, networking options and the nature of your claim.

If you are interested in learning more on the subject of debt collection in the Caribbean please connect on Linked-In or follow me on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.