Former Collections Maverick Seeking Site for New 'No Abuses' Call Center

While new call centers would appear to be popping up all over the U.S., one potential new contact center is generating more news than usual. Collections company CFS II, founded by industry maverick Bill Bartmann, is currently looking at three states – Nevada, North Carolina and Illinois – as potential locations for a 40,000-square-foot call center site that eventually could provide 2,000 jobs.

CFS II has already won approval from the Nevada Commission on Economic Development for more than a half million dollars in sales and business tax abatements, along with $34,000 in sales tax deferrals, as part of an incentive package to attract the business to that state. CEO Bartmann says he expects to make his final decision as to where to locate the call center by March.

But the call center isn't the biggest story, it's the man. CFS II, founded in 2010, is so named because it replaces CFS I, a company that ended in some scandal (a concept that is not unknown to the collections industry) 13 years ago. CFS I would bid up the price of bad debt and ultimately ended up monopolizing forward-flow contracts with major banks in the late 1990s, writes Credits & Collections Risk.

Bartmann was essentially the first to securitize bad debt on Wall Street, which gave him access to large amounts of capital. It didn't last: CFS shuttered its doors in 1999 and laid off 3,600 employees. Federal grand jury indictments were filed against Bartmann and former CFS executive Jay Jones, who was accused of creating a shell company to inflate the performance of CFS. While Bartmann was acquitted, Jones served five years in federal prison. Bartmann is now back, and he is launching a new campaign to clean up the collections industry. It's called “Stop These Criminals,” and it's reportedly dedicated to stopping collections abuses.

“Consumers go to jail over less than $100. Collectors threaten violence and demand sex for repayment. Abusive language is the status quo. As an industry insider, I’ve seen clear patterns of abusive behavior by other bill collectors and I know how to stop them,” said Bartmann last year in testimony before Massachusetts Attorney General Martha Coakley. “I’m not afraid to pick a fight with abuse in this $40 billion industry even if I’m all alone. My goal is to shine light on abuse in this barbaric and out-of-control business. I’ve been a debt collector for decades, so I’m just the guy to do it.”

In in meantime, Nevada – extra hard-hit by the current recession – hopes to attract CFS II to that state, hence the incentives offered to the company. It's no wonder: CFS says it will pay agents $19.87 an hour on average and invest $1.7 million into the facility. It will create about 500 jobs initially, says Collections & Credit Risk, with the potential to scale up to 2,000.And cleaning up the collections industry? Given the rise in consumer complaints to the Federal Trade Commission (FTC (News - Alert)) in recent years regarding abusive collections practices, a “clean” collections business will be welcome to everyone.

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