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 Good
Manners For Bad Checks
April
20, 1999
OXFORD,
MISSISSIPPI
- That
simple philosophy recently led to the expansion of a homegrown
collection and verification business in Oxford. Security Check
located at 2612 West Jackson Avenue, recently held a reception
celebrating their newly expanded facility. The business now
operates on 6,400 square feet and employs 160 people, all
in Oxford. These employees all work toward the same goal -
collecting the money owed to businesses from bounced checks.
Far from the nice offices on West Jackson, Security Check
began in a small apartment shared by two Ole Miss students
who were looking for a business concept that would allow them
to continue living in Oxford. "We had an apartment together
at Oak Grove in 1995," said John Lewis. "We were
selling discount packages for a hair salon to Ole Miss students
and a few of the student's checks bounced," added Lewis'
partner, William Alias III.
The two contacted the students and got their money but an
idea was born. While continuing their classes, the young entrepreneurs
pitched the idea of collecting on bad checks to a number of
local businesses. School during the day, and collecting at
night, soon grew their business out of their apartment into
a house.
Security Check now employs 160 people and has spread its operations
into 14 states which include 28 joint venture partnerships.
The joint venture partners sell the program to retailers.
The bad checks are sent directly to Oxford. In this way, Security
Check in Oxford is responsible for collecting on all of the
checks from across the country. "No matter where the
check is written, everything comes through Oxford," Lewis
said. Three large rooms equipped with phone banks are operated
by Ole Miss students, Security Check's main work force. The
students all follow the same script and the same good ol'
Mississippi philosophy: Be nice. "We don't badger people
and we're not rude. We train our callers to be polite and
business-like," Alias said. "Sixty-five percent
of bad checks are not from bad people, but from good customers
with whom the retailer wants to continue a business relationship."
Alias said bad check writers fall into three categories: those
who simply make a mistake; those in "a tight" who
are writing checks just to get through the month; and people
who probably shouldn't have a checking account. These errant
check writers can be identified by the verification process.
Using tact, persistence, and understanding, Security Check
believes they have the highest collection rate in the industry.
Businesses get their money and don't have to deal with making
potentially embarrassing calls or alienating a good customer
who happened to bounce a small check.
Security Check makes its money by collecting the service charge
allowed by state laws. The face amount of the check is returned
to the retailer. Lewis said volume is the key, and Security
Check handles thousands of checks per month, targeting small-to-medium
sized businesses, in fact any business that accepts checks
- from a medical practice to a florist - for whom collecting
would be a chore.
"We're busier than ever," Alias said. Long hours
have paid off in quality service to local businesses. "Security
Check has developed a very successful approach to sales and
expansion," said Richard DeVoe, a CPA and Security Check
joint venture partner located in Oxford. "By utilizing
the contacts and skills of joint venture partners, it can
reach into the corporate offices at a much faster pace than
other companies. Once they are in, there is no comparison."
"I think their growth is phenomenal because their service
is phenomenal," adds Holmes Petty, who lives in Clarksdale,
Mississippi and has joint ventures in Texas, Missouri, and
Arkansas. "Security Check offers a great service for
businesses that take checks because it lets businesses perform
their services," Petty continued.
Although only one percent of all checks written turns out
to be bad, that equates to some 600 - 700 million bad checks
written annually, according to the Federal Reserve Bank. Bad
checks aren't going away, and neither is Security Check.
What are Security Check's plans for the future? More jobs
and more service. "We'd like to create more jobs for
Oxford," Lewis said. "We're planning on hiring another
150 people over the next 12 months in sales, administration
and accounting. This will be necessary as more joint venture
partners invest in additional area codes in the U.S."
"Plus we've just negotiated an agreement with the 2nd
largest credit card processor in the U.S. Our staff will be
trained and ready to offer these additional services by late
May," Lewis added.
Fred Alias, joint venture partner in Georgia, North Carolina,
South Carolina and Florida, says Security Check of Oxford
is one of those businesses that may be imitated but never
duplicated. "There are a lot of competitors that provide
check collection and verification services, but none that
do so with the professionalism of Security Check. This is
the only business I've ever been involved with where once
you get an account, it is virtually impossible to lose it.
This is due to the level of service that Security Check provides."
April 20, 1999
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