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Payday Loan Collection Methods & Tools

Every payday loan operator and check casher is concerned with collections. It is always a topic at FISCA and CFSA Conventions. In this issue we discuss SCAN: A new collection solution. We followup with a discussion of the 60 Minutes Payday Loan piece they ran.

SCAN & A New Payday Loan Collection Solution

Beneath the popular myth about a cashless society, checks remain the dominant means of non-cash payment. Industry statistics show 200 million Americans have checking accounts and around 84% use checks as their primary method of payment, writing over 69 billion checks a year.

In the middle of this boom the Payday Loan industry was born. But there is a dark side. Ugly but true.

You all know the story:
* A customer opens an account with you in the store or through your website.
* You hand him cash for his post dated check, or send money to his bank account.
* He takes the money and disappears.

Sure, you may subscribe to one of the negative data base reporting services like Teletrack. If every payday loan operator in every locale accurately used these data bases you certainly have a chance of collecting your bad check funds; eventually. But typically, you're left holding a rubber check. The loan was not big enough to justify hiring a private detective an attorney or engaging the services of an outside collection agency. So, you simply stick the bad check in your dead file and move on. In the mean time, this former customer walks away with your money and does the same thing to someone else. (Cont. below)

Read a few of our previous Newsletters here if you missed them.
Embrace the Internet
Making Money in the Payday Loan Industry
Payday loan Convention & Developments
The Future of the Payday Loan Industry.
The National Bank Model
Payday Loan Newsletter

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Accurate payday advance and check cashing bad check losses are difficult to gather statistics on. Successful operators tend to exagerate their losses to disuade new competition and less successful operators generally discount their losses out of embarassment. Our findings reveal average operators are losing between 4% and 8% of their hard earned money to bad check writers. These ugly statistics are why a new collections expert is making available to Payday Loan stores and check cashers a BIG muscled, negative check database called: SHARED CHECK AUTHORIZATION NETWORK or SCAN.

You may have never heard of SCAN but you've seen it in action.If you've ever gone into a Wal-Mart, Target, Costco, Sears, Macys, Smiths Supermarket, Brooks Brothers, Bloomingdales, etc. and bought something with a check you've had an encounter with SCAN. You know the drill. The cashier takes your check and asks to see your drivers' license. She writes your number on the check, then the check is sucked up into the point of sale computer and is then spit out.

The whole process takes about 8 seconds!

In 8 a-m-a-z-i-n-g seconds your check was flashed to SCAN.

SCAN searched its King Kong sized database to see if you were in there. Of course you were not, but if you had been in there the cashier would have handed your check back to you and refused to accept it.

An example of what SCAN can do for your company:
"When I was the collection manager for a payday loan store in Albuquerque, New Mexico a few years ago, I wrote a proposal to my corporate office about using SCAN. The cost at that time was a flat fee of three hundred and twelve dollars a month. Anyway, we looked at the numbers. We had hundreds of old write off checks that were just sitting there in the files. Our average loan ranged between $150 and $500 dollars. We reasoned that if SCAN forced just three former customers to pay a month,it would pay for itself and give us back money that we had written off."

"Now I pursued civil actions on some accounts but I put all the accounts into SCAN. I got calls from old customers all over the country. The questions were always the same: "After I pay you? How long will it take for you to get me out of your system?"

"For 2 ½ Years I Maintained a Bad Check Collection Rate of OVER 70%." If you use SCAN will you get those kind of numbers? I can't promise you that you will. But I can promise you that your collection numbers will increase.

"Almost 4 years have passed since I worked for that loan company. I did some checking with SCAN and discovered that not a single Payday Loan company is using it's service today, to collect bad checks."


Over 398 retail chains in 71,000 locations rely on the SCAN database everyday, 7 out of every 10 checks authorized in the United States are processed through SCAN.

SCAN gives you the power to control the bad check writer's ability to write checks.
You can use SCAN to find those run-away check writers anywhere in the United States. AND MAKE THEM PAY.
SCAN will boost your collection numbers.
SCAN allows you to quickly and easily go after those bad check writers who come to your store or take your money over the internet.

Of course I can hear some of you say, "Well I'm already using a bad check database called T----K". T----K is a good database. I have used it from time to time to help me enforce judgments. But T----K is a Subprime consumer database. It monitors high risk consumers who live on the other side of the tracks. But when these consumers stop using furniture rental stores, high risk credit cards, and C & D Mortgage loans, they tend to slip off of T----K's radar.

"For $19.95 a month and a 20 cent transaction charge I can give you access to a system that processes 3.5 billion checks a year."




For $19.95 a month and a 30 cent per check transaction fee you can submit your checks to me and I will enter them into the SCAN database. When the debtor calls I can collect the payment or refer him to you. After the payment is received it will be my responsibility to delete the debtor from SCAN.


I unconditionally guarantee the SCAN database in black and white. You can sign up risk-free, even if you are simply curious. If your collection numbers do not rise within a 30-day period I will return your $19.95 dollar fee—No Questions Asked. However, I suggest you order at once. As much as I’d like to, I cannot guarantee the special low price for much longer. This special introductory offer is a limited price test. The price will soon be substantially higher.
Jackie, Check Data Systems
Collections Specialist

To enroll in the SCAN product or to secure additional information, proceed here:

Payday loan operators and check cashers: Need help with compliance? We specialize in offering the right product or service to fit the needs of your company. Whether it's our comprehensive check fraud training seminars, field training, Bank Secrecy Act compliance programs and reviews, or complete guidance in opening or operating a check cashing, payday loan, title loan, signature loan, or internet loan operation, we are ready to offer our assistance. We also represent numerous products that help you operate your business. For all your financial services needs contact us. Training & Compliance


60 Minutes ran a payday loan piece a while back. It was a typical attack on our industry describing us as "loan sharks" preying upon the poor, misinformed consumer. They chose to highlight the supposed uninformed, black, female consumer having no choice but to use our payday advance product to solve her long-term financial hardship. Same old horse, right? We have heard it a million times before!

However, when are we going to become active and highlight our strengths? When are we going to proactively fight this kind of bad PR? Granted the media prefers negative stories about an industry. That is how they sell advertising. We will never garner positive media coverage on the likes of 60 Minutes, The New York Times, The Los Angeles Times, or any others. But we do have our stores, our customers, our employees, our families and the families of our customers and employees.

As 60 Minutes correspondent Scott Pelly reported, payday stores are among the fastest growing financial services in America -- now a $40 billion-a-year industry. His estimate may be high but the point is we are a HUGE industry. Why? Because the consumers of the world need our product. After evaluating all their choices in the market place they choose us! We must promote this fact. Every industry has it's share of disgruntled consumers and operators lacking scruples. FISCA and CFSA have both sponsored independent surveys revealing the high consumer satisfaction with our products and services. After reviewing these surveys, the research companies that conducted the surveys, having nothing but preconceived notions regarding our product, commented on how pleasantly surprised they were at the results. Our payday loan industry ranks higher in consumer satisfaction than banks, credit card companies, and more!

We must take every opportunity to make this point to our regulators, the media, AND OURSELVES! Yes, we know who we are. Those of us who stutter when we are asked what we do for a living. Those of us who hang our heads a little when describing our businesses. We meet some of you at the CFSA & FISCA conventions and in the field. STOP IT! WE SOLVE FINANCIAL PROBLEMS! And we solve these financial problems for millions of consumers every year. Additionally we employ hundreds of thousands if not millions of people in our businesses.

So, aggressively solicit testimonials from your clients. Use them in your advertising efforts. Adopt and adhere to the "Best Practices" promoted by CFSA & FISCA. Find out who your state/province representative and regulator is. Contact them. Email them. Talk to them. Stay informed! It will mean money in your pocket and happiness in your head.

Until Next Time, from The Payday Loan Guys
The Team
Trihouse Payday Loans

This information is discussed further in depth in our Payday Loan Startup & Training Manual. You may ORDER it NOW. Next Month a new topic and coverage of more states.

If you have comments, questions, topics you would like covered...PLEASE contact:
The Payday Guys
Payday Guys
1-702-208-6736 PST USA

Free Monthly Subscription to our Payday Loan Newsletter. Typically, once each month. If you have an interest in the payday loan industry, you need our Payday Loan Newsletter!

WE PROMISE to never sell, give-away, or abuse your contact info. You will receive a confirmation email from us immediately.