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A Publication of the A.V. Knowles Group | Magazine Issue 001

March 2014

Forging Ahead

In This Issue

AV Knowles & Co. Ltd. looks to the future

Chairman’s Remarks

Why getting bad credit will make life a tough journey

OECS Grappling with High Debt

The Documents You Should Require Prior to Advancing Credit

GCS Partner News

Bernard Fernandes year, we are set to launch the first phase CEO, A.V. Knowles of our new Credit and Debt Management & Co. Ltd. System (CDMS), leading-edge financial

This year, A.V. Knowles and Co. Ltd. celebrates 29 years as the leader in Credit and Debt Management in Trinidad and Tobago and throughout the Caribbean. As we enter the New Year, we do so mindful of our past successes but also guided by our goals and vision for future growth and development. We have always been regional innovators, pioneering upon inception the principle of ‘No Collection, No Charge’ in Trinidad and Tobago. Building upon our reputation as industry vanguards, this

service technology that will enable us to hold our own within the global marketplace. CDMS directly facilitates our regional expansion, allowing us to link to databases across the Caribbean islands: another industry first. Even as we turn our gaze to the global horizon, seeking out opportunities for innovation, inter-regional growth and development, this year, we must also remember to look inwards. While we seek to maintain our status as industry leaders, we must also strive to achieve ‘our personal best,’ finding both motivation and pride in our abilities, our quality of service and our professionalism. Welcome to A.V. Knowles & Co. Ltd. 2014!

Vision Our Vision is to continuously expand the frontiers of our local & regional capability within our group for the full cycle of Credit Management Services.

Mission Our Mission is to provide clients with high quality service through committed, motivated and results-oriented staff. We aim to foster close partnerships with our local, regional and international clients in our quest to becoming the premier provider of Credit Management Services. We pledge to work with honesty and integrity, while maintaining a positive presence in the environment in which we operate. We strive to capitalize on advances in technology in an attempt to maintain constant interaction with our clients.

About Us Debt Collection Credit Reporting Legal Services Investigations

owned and managed by our professional Attorneys-at-Law with over forty (40) years of experience.

With our Head Office in Trinidad, plus a worldwide network of 70 partner offices in Global Credit Solutions, we have the coverage internationally to handle any CorpoA.V. Knowles & Co. Ltd. is the Carrate Fraud Investigations, Backibbean's largest Credit Manageground Checks and Brand Protecment Company for 3rd party Debt tion cases on your behalf. Collection and Credit Risk Services, including a substantial online The Management Team of delinquency database which is A.V. Knowles & Co. Ltd. extensively used by all Local LendMr. Albert V. Knowles ers and Creditors. Chairman A.V. Knowles & Co. Ltd. pioneered the concept of charging one flat Mr. Bernard Fernandes Commission rate, i.e. "No Collec- Chief Executive Officer tion, No Charge" for Debt RecoverMrs. Nirmala Ramkhelawanies which includes legal action by Dhanrajh its Attorneys (where feasible & apSenior Attorney-at-Law proved by client) at no extra charge. Mr. Jason Edwards As the Caribbean's #1 DEBT COLLECTION & CREDIT REPORTING Agency headquartered in Trinidad and Tobago, we handle all Bad Debt Collections on a contingency basis ("No Collection, No Charge"), and provide Free Listing and circulation for members of all delinquencies through the most widely used Business Information & Credit Risk Management Database in the area. A.V. Knowles & Co. Ltd. is fully

Group Finance Manager Mr. Donn McQuilkin Group IT Manager & General Manager Mrs. Sharon Yorke Human Resource Manager Mr. Keon Gonzales International Business Manager Ms. Carol Kitson Sales & Marketing Manager

Chairman’s Remarks As we start this New Year, I extend warm personal greetings and best wishes for continued success to all our dedicated staff and valued clients. This first issue is dedicated to our Management team at A.V. Knowles & Co. Ltd. and to the hardworking Media committee whose diligence made our Newsletter become a reality. It is heartwarming for me as Chairman to see the introduction of so many costeffective systems & controls now in place within our Company which augur well for continued expansion and growth in our range of credit management services. I congratulate all concerned for their strength and commitment to drive my original vision, i.e. to stay out front and consistently deliver best quality service to all our valued clients in credit collections recoveries and risk management. Despite all the challenges and adjustments required in the last financial year, I am grateful that we have still been able to achieve significant growth and financial success. The Company and the Group are indeed well-poised to take advantage of all the exciting opportunities now open to us, both locally and regionally, especially with continued support of staff and our many valued clients. Albert V. Knowles Chairman, AV Knowles Group

Learn to manage your money. If managing your money is something that you're not comfortable with or knowledgeable doing, then consult a credit counselor or personal money manager to learn the basics.

Why Getting Bad Credit Will Make Life a Tough Journey

The word "credit" comes from the Latin word, "credere", which means, "to trust". When we allow someone to buy something from us "on credit", it means that we trust them to pay us after a given period of time. When we also say that a person has "good credit", it's generally known that the person is trusted to pay for the goods and services subsequent to the sale.

card companies and subsequently reported to the credit reporting bureaus.

the amount of the charges that accumulate in a one month period;

the types of purchases that are made;

the amount of payments that are made towards chargOur creditworthiness, or an- es; other way to say it, our trustworthiness, can be gathered  the time it takes to make from many sources. One of the easiest ways that our per- those payments to completely sonal creditworthiness is cap- settle all the charges; and the tured is from the use of credit total period of the individual's cards. All the credit card com- credit history panies such as American ExIn addition to the credit card press, Visa, Master Card, and companies, banks, finance Discover, report the ongoing companies, and utilities are By Bernard Fernandes credit card history of their also sources that report the credit card holders to the maIn order to understand how jor credit reporting companies above key elements to the credit reporting bureaus. bad credit can make life a on a monthly basis. tough road, let me begin by telling you some basics about There are five key items that Continued on Page 4 the meaning of credit. are monitored by the credit

Why Getting Bad Credit Will Make Life a Tough Journey Continued from Page 3 The major credit reporting bureaus are Experian, Equifax, and Transunion and every month they are receiving and storing the information on hundreds of millions, perhaps billions, of people throughout the world. Once they receive this information, it is processed through certain proprietary formulas that result in what is known as a "credit score". In addition to producing their own credit scores, each credit reporting bureau also sends its credit information to the Fair Isaac Corporation, which produces its own credit score, called a FICO score The FICO Score is the most commonly used credit score upon which decisions concerning an individual's creditworthiness are made.

2) Employment - Some employers, with permission by the candidate, will obtain a candidate's credit report during the vetting process. Candidates with fair to poor credit may be considered a high risk for employment due to the fear that their credit issues may impact their ability to properly perform their duties. Specifically, candidates with credit issues who are applying for positions where access to a company's funds is possible, may be completely denied employment.

3) Marriage - Although most of us have a dreamy eyed version of what marriage is, the reality for its success depends upon its ability to be economically viable. This means that a married couple, especially with children, will want to FICO scores range from 300 to 850 and have access to a sufficient level of mafollowing below is the general range of terial items to make their lives comfortahow an individual's score is considered. ble. However, paying higher interest rates or not being able to access credit to purchase necessities such as a car,  Less than 630: Poor credit could put a great deal of strain on the family and result in its breakup.  630-689: Fair credit

690-719: Good credit

720-850: Excellent credit

The above gives you a short synopsis of how creditworthiness and your credit score is established, and since we live in a credit society, depending upon how low your credit score becomes, your life's journey may also become much more difficult. Let me give you some examples. 1) Higher interest rates - Interest rates that you'll pay on purchasing a car, buying a home, or any other material item will be financed to you at a higher interest rate. The reason is that individuals who are perceived to have poor credit are a higher risk, which translates into higher interest rates. Logically, the higher the risk that a person is considered to have, the more difficult it would be for them to pay a higher rate. Unfortunately however, banks, lenders, and credit card companies apply a different logic in which a person with lower or poor credit is charged a higher rate to offset the possibility that they if they default during the course of a payment stream, part of the payments received will help to offset the payments that remain outstanding.

1. Always try to pay your bills on time. This is considered the golden rule for establishing and maintaing a good credit history. Try to set up as many payments through online banking. This will not only help you have the payments be withdrawn regularly without possible lapses due to the mail, but it will also help you to stay organized as well. 2. If you can't make your payment in full, especially with credit cards, try to pay more than the minimum payment. 3. Know the amounts that you owe. Every month you should have a firm idea as to how much you need to pay for your rent or mortgage payment, car payments, food, and utilities. 4. As the personal financial guru Suze Orman has said on many occasions, "live below your means and within your needs". Do not spend beyond your personal limit. Remember, Just because the credit limit on you credit card is high doesn’t mean you should use it.

5. Close or cancel any credit card you don't need. Honestly, having one credit 4) Insurance - Many auto, property and card account will makes it easier to casualty, health, and life insurance com- keep track of bills. panies will look at an individual's credit score as part of their underwriting pro- 6. Keep yourself out of collections. Stay cess to determine insurance premiums. on top of bills and call your vendors or For example, a property and casualty suppliers before they call you.Taking a insurance company will use credit very proactive approach will keep you scores as part of the underwriting pro- out of third party collections and keep cess. If the insured has poor credit, this your credit history in tact. could be interpreted as not having the financial means to keep a home from 7. Monitor your credit score and obtain a falling into disrepair. This could result in credit report every 4-6 months. Credit a higher home insurance premium for reporting companies are notorious for the insured, which is again an added making errors and it's up to you to make expense that can put stress on a family. sure that there are no errors on your credit report. If you find errors on your credit report, take the time to get them 5) General Reputation - Because we corrected. are a credit society, having poor credit can sully one's reputation. Even if the Learn to manage your money. If managreasons for poor credit are the result of ing your money is something that you're circumstances outside of one's control, not comfortable with or knowledgeable regretfully most people don't consider doing, then consult a credit counselor or those extenuating circumstances when personal money manager to learn the deciding to grant credit. The reality is basics. that the red carpet rolls out for people with good credit. As having poor credit can make life's journey a tough one, establishing and No matter what stage of life you're at, maintaining good credit through prudent whether your're a student, a business money management will tremendously person, or a retiree, follow these day-to- provide you with many opportunities to day practices to establish and maintain enhance your life. good credit.

OECS Grappling with High Debt Trinidad Business Guardian | Pub- Sir Dwight aid that economic and filished: Thursday 30th January 2014 nancial developments in the Eastern Caribbean Currency Union (ECCU) Member states of the Organisation of continue to be shaped by the global Eastern Caribbean States (OECS) are economic environment which is still still grappling with low economic uncertain, with growth for 2013 likely to growth, persistent fiscal deficits and be lower than previously anticipated. rising debt levels, Governor of the Eastern Caribbean Central Bank According to figures released here, (ECCB), Sir Dwight Venner, has said. preliminary data indicate that economic activity in the ECCU expanded at a Delivering the 2013 Economic Review modest pace of 0.7 per cent in 2013, of the sub-regional grouping on Tuesbuilding on the marginal growth of 0.2 day night, Sir Dwight said it was eviper cent achieved in 2012, which redent that 2013 had been “another chalversed the negative growth trends exlenging year for the Currency Union” perienced since 2009. The increase in with high unemployment and poverty economic activity was primarily driven rates and some fragility in the financial by improved performances in agriculsector. “Once again the structural charture, construction and tourism. acteristics of our countries, namely, small size, extreme openness and high The construction sector expanded by vulnerability to external shocks and 2.9 per cent following a 4.3 per cent natural disasters have become more decline in 2012, as public sector conevident.” struction gained momentum. In the

tourism industry, value added is estimated to have increased by 0.4 per cent due to improvements in major source markets and more intense marketing efforts. However, this rate was lower than the 1.4 per cent growth recorded in 2012. The ECCB said the consolidated fiscal position of the Central Government is provisionally estimated to have deteriorated in 2013 as the growth in expenditure outpaced revenue collections. An overall deficit of approximately EC$427.3 million or 2.8 per cent of gross domestic product (GDP) was recorded compared with one of EC$367.3 million or 2.4 per cent GDP in 2012. The bank said the deterioration in the overall deficit position reflected the increase in capital expenditure while current expenditure decreased.

Experts look at Caribbean Trinidad Business Guardian | Pub- ular emphasis on the situation of low lished: Sunday 23 February 2014 and middle income countries in Latin America and the Caribbean. The Latin American and Caribbean Economic System (SELA) and the As- While the issue of debt has been marsociation of Caribbean States (ACS) ginalised at the regional level, mostly will hold a Meeting of Experts on debt as a result of the positive impact of the burden in the Caribbean Region tomor- most favourable external economic row in Port-of-Spain. conditions and the greater macroeconomic discipline attained by the majoriPermanent Secretary of SELA, Ambasty of countries since the 1990s and the sador Roberto Guarnieri, underlined beginning of the millennium, debt burthat the meeting will analyse the debt den persists as one of the main probsituation and policies for debt relief, lems being faced by the economies of focusing on differentiated approaches the Caribbean subregion. that respond to the particular characteristics of Caribbean economies. Some Caribbean economies report a debt/GDP ratio of more than 60 per The importance of the issue of debt cent, revealing an almost unchanged burden or sustainability has been fiscal vulnerability of this burden in stressed repeatedly in various regional terms of economic and social developand global forums, including the Latin ment for this group of countries, since American Council of SELA, with particdebt burden has a major negative im-

pact on economic growth. Although debt can be used as a tool to improve macroeconomic performance and promote welfare, excessive debt accumulation can lead to a fiscallyunsustainable situation, with severe negative effects on macroeconomic stability and economic growth. In addition, the per capita level has deprived most Caribbean countries of preferential solutions for debt relief, in particular the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative. The Meeting of Experts is intended to exchange experiences among the countries in the subregion as regards the subject of debt relief and disseminate information about this reality among countries and integration of organisations in Latin America and the Caribbean. Continued on Page 6

The Documents You Should Require Prior to Advancing Credit By Bernard Fernandes

existing customers may end up not paying. In this case, the minimum information may only be the telephone number, shipping and mailing addresses. Since the dollar volume is relatively small, it's felt that it would not be worth the time, effort and cost to obtain and review a credit report and any other supporting credit information.

In very broad terms, the kinds of supporting documentation that supports advancing credit to a new customer depends upon the amount of credit being requested and the amount of credit you are willing to advance. Following below is a general list of the documentation that should and/or may be required to support advancing credit. Conversely, if the amount of credit you intend to advance is quite large, say at 1) Credit Application - The information least 1% of your total sales, then the requested on a credit application can be information on the credit application has very simple or very detailed, as it all de- to be very detailed, which would include pends upon the nature of your business the names of the executive manageand the amount of credit that you intend ment, trade and bank references, sales to advance. If the amount of credit being and profit history, personal information advanced is quite small then perhaps the on the owners, and even a personal only items you'll need is the name of the guarantee may be required. individual in charge and the company's contact information. Please note that the information on a credit application where the amount of For example, hand tools are one product credit being requested is large, still with a low unit sales amount that comes needs to be verified since the information to mind since each tool may be between provided by the potential customer may $10 - $50. Some companies in this in- be inflated or exaggerated. dustry will go ahead and ship out hand tools up to $100 on credit knowing full Continued on Page 7 well that between 1-2% of all new and/or

GCS News Global Credit Solutions (GCS) founded in Australia in the 1970’s, GCS Group today is a world leading Credit, Collection and Risk Management enterprise. With a team of more than 3,000 trained specialists located in over 90 countries, GCS has the expertise and international resources to protect its clients from financial and reputational risk. A.V. Knowles & Co. Ltd. is proud to be a longstanding member of this wellestablished group. Each year GCS holds a global conference where partners from its constituent meet to discuss industry trends, share ideas, resources and network. Our Chairman and Owner served as Regional Director and was honored at last year's conference in Chicago with a Lifetime Achievement Award. This year A.V. Knowles & Co. Ltd. looks forward to continuing our relationship with GCS with plans to attend this year's conference slated for Dubai in October.

Continued from Page 5 Another objective of this meeting is to identify debt relief policies, particularly measures to promote investment and to spur economic growth. The conclusions and recommendations are expected to be of benefit for affected countries and of strategic importance for the other Member States. After the Meeting of Experts, the final report will be sent to the member states of SELA and relevant regional bodies, including the Association of Caribbean States.

The Documents You Should Require Prior to Advancing Credit Continued from Page 6

It is only the poor who pay cash, and that not from virtue, but because they are refused credit. - Anatole France

mation, especially when it comes to advancing a large credit amount, is not as 2) Trade Reference - Understanding who reliable as you require. your potential customer is presently doing business with, at a credit level and with Some credit insurance carriers issue credit terms that are being requested of credit reports indicating for how much your company, is imperative. If your po- they would cover the potential customer tential customer is requesting a $20,000 in the event of a payment default or bankcredit limit from your company and only ruptcy. This coverage amount can also able to show a $2,000 credit limit with be used as a credit limit guideline and is another supplier, that is not too reassur- much more reliable since the credit insuring. But even if the credit amount and ance carrier is basically saying that they payment history with another supplier would be prepared to pay out to your appears to be in line with what is being company up to the amount of coverage. requested to your company, it's still proper due diligence to confirm if there is less Credit reports issued by Industry Credit than an arm's length relationship between Groups are also much more reliable since your potential customer and their suppli- the payment and default information er. A supplier who is the brother-in-law of comes from other suppliers on a regularly the potential customer and who vouches basis that have had a direct business for a $20,000 credit limit in name only, is relationship. very misleading. 5) Financial Statements - Obtaining a 3) Bank Reference - If you can obtain a customer's financial statements are often bank reference that contains average required when you are selling very exdaily balances, lines of credit, overdrafts, pensive products or equipment and unand high and low credit facilities availa- derstanding the customer's credit worthible, this would be an excellent indication ness and long term viability is imperative. of your potential customer's cash flow However, most financial statements are status. Again, if the credit amount being not audited but assuming that they have advanced is quite low relative to your been created properly, directly viewing monthly sales, then you would not require and analyzing (assuming you have the time) the results can give you one of the this document. best snapshots of a company's financial Unfortunately, banks are not always will- situation. ing to give a third party that kind of detailed information. Sometimes if your 6) Standby Letter of Credit - When a company and the potential customer review of other documents such as a have the same bank then that information credit report or financial statements indicate that the creditworthiness of a potenmay be forthcoming. tial customer is in a weak position, a 4) Credit Report - There are a number of Standby Letter of Credit can give you the credit reports that can be obtained over a assurance needed to advance credit. In wide range of costs, which can be a sim- short, a Standby Letter of Credit is isple financial summary or provide incredi- sued by a bank on behalf of its customer bly detailed information and data. Here and is used as a "payment of last resort", too, one has to balance the information should the customer fail to fulfill a conthey need to evaluate the amount of cred- tractual commitment. Standby letters of it being advanced against the cost of the credit are created as a sign of good faith supporting information being obtained in business transactions and are proof of and analyzed. a buyer's credit quality and repayment abilities with his bank. One of the major ideas to keep in mind when using any credit report is understanding to what extent the credit infor- Every company's credit situation is mation has been verified. Many compa- unique and not only knowing what docunies that issue credit reports have a dis- ments are necessary to advance a credit claimer at the bottom of the report which limit but who has the responsibility to states that they do not accept any re- authorize credit within a given range sponsibility for any credit decisions made should be set up in a guideline. using their report. This kind of disclaimer should be a warning sign that the infor-

GCS Chicago Conference 2013 The GCS Global Conference held on October 14th – 16th 2013 was attended by Mr. Albert Knowles and Mr. Bernard Fernandes. In the photo below, Mr. Albert Knowles is seen in discussion with Mr. Lou Figueroa, the President of Credit Decisions International.

Contact Us Give us a call for more information about our services

A.V. Knowles & Co. Ltd. 50 Woodford Street, Newtown, POS, Trinidad W.I. T: 868.628.2062/2063 F: 868.622.8576 E: W:

GCS Chicago Conference 2013 | Photo credit:

Congratulations In a Press Release issued on February 6, 2014, the International Association of Commercial Collectors Inc. (IACC), the largest international trade association for commercial debt collectors, was pleased to announce that four (4) employees of A.V. Knowles & Co. Ltd. earned the IACC Certified Collector designation. They are: Ms. Vidia Suphal Ms. Linzi Balroop Ms. Nekeisha Sandy Ms. Cindy Sooknanan

New Appointment A.V. Knowles & Co. Ltd. recently welcomed Mr. Norvick Mohon as a Consultant in the areas of Credit and Collections. Mr. Mohon comes with a wealth of experience, having spent thirty-eight years in the Banking Sector. He served as Senior Corporate Manager at Republic Bank Limited for 36 years and as a Consultant in Credit and Securities Management at the Bank of St. Lucia for 2 years.

IACC Certified Commercial Collectors must pass a rigorous exam that consists of 60 industry specific questions relevant to commercial collections and focuses on the duties and responsibilities of commercial collectors. The exam was designed and written by some of the top commercial collectors in the field. Congratulations to our IACC Certified Collectors! Congratulations to Ms. Suryya Salick, Accounts Assistant at A.V. Knowles & Co. Ltd., who recently passed ACCA Level 2 Examinations. Ms. Salick is scheduled to write her final Level 2 Examination in June 2014 and we wish her the best of luck!

Albert V. Knowles

Editorial Team February 2014

Bernard Fernandes Amrica Seepersad Carol Kitson

AV Knowles Magazine 001 March 2014  

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AV Knowles Magazine 001 March 2014  

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