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Businesses must sharpen up their payment terms, says Lovetts |
| Welcoming the long-awaited proposed changes to the County Court system published last Friday, debt recovery law firm Lovetts is urging businesses to tighten up their payment terms in readiness for the reforms coming into force in 2013. The proposed reforms will enable businesses to recover debts in a much more cost effective and time efficient manner provided they change their contractual terms.
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| Under the new system the small claims limit is set to rise to £10,000 and possibly £15,000 at a non-specified date in the future for B2B debt. All small claims under £5,000 will be automatically referred to mediation on the basis that this is not compulsory mediation, but rather a requirement to engage with a small claims mediator. In addition, the Government will streamline the procedures for obtaining Third Party Debt Orders and Charging Orders, as part of its efforts to ensure creditors receive what they are owed.
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| 14.02.12 |
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One in six (17 per cent) adults missed paying a bill in 2011 |
| Research from MoneySupermarket.com, has found that over one in six (17 per cent or 8 million Brits) missed a payment for at least one bill in the last 12 months, potentially putting their credit profiles at risk, with credit cards coming out on top as the most missed payment |
| With many consumers expected to apply for a personal loan or credit card this year, the research found that worryingly, three million people had missed a credit card bill in the last year (7 per cent). It seems that council tax is one of the most common costs where people have delayed payments, as 1.9 million people missed a council tax payment (4 per cent) last year, an increase since 2010 (3 per cent). Mobile phones, personal loans, broadband, Sky and gas and electricity bills were also high up on the list as payments most missed (3 per cent each).
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| 07.02.12 |
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Credit Policy Review Comes Once a Year, According to NACM Survey
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| Revising a company's credit policy is typically an annual event, according to NACM's January monthly survey |
| When asked how often their company updates or revises its credit policy, 38% of respondents answered "annually," while 20% said "less than once a year." Only 5% of participants noted either "quarterly" or "every six months," while only 1% said that revisions were made every month. Fourteen percent of respondents either never revised their company's policy or simply didn't have one.
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| The remaining 22% of participants noted that their company updates their credit policy according to some other schedule not offered as an answer. Most of these respondents noted that their company merely makes changes when necessary, sometimes yearly, sometimes daily and sometimes not at all.
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| 03.02.12 |
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Launch of second annual survey of international late payment risks and trends |
| The second annual survey of global credit trends and risks, which last year highlighted the escalating problem of late payment in business, launches on 1 February
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| P&A Receivables Plc, which provides international credit management and debt collection services, has designed the survey in partnership with the MSc degree in Finance at Sheffield Hallam University’s Business School.
Last year the survey revealed that more than two years after the introduction of a code of conduct to crack down on late payment in business the problem is getting worse. The survey of credit and finance professionals showed that more than two thirds of leading international and UK suppliers were being paid late by their customers.
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| Laurie Beagle, divisional director at P&A Receivables, is the founder and chair of several international credit forums run by P&A which bring together credit and senior managers from corporates in diverse industry sectors across the world. He said: “We know from forum members that there are still great concerns about late payment, particularly in the light of the Euro Zone crisis. The survey helps them weigh up the risks of trading in certain counties and with particular sectors.
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| 01.02.12 |
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Late payments by UK companies climb sharply |
| Eversheds comment: |
| Latest figures have shown that UK companies have formed an increasingly bad habit of late payments, with the average in 2011 paying almost 26 days beyond the agreed terms. Large UK companies were the worst culprits, paying an average of 34 days late. Thomas Whitfield, Solicitor at international law firm Eversheds, comments:
“The latest figures are showing that the average time for commercial debtors to pay, beyond agreed payment terms, has increased substantially over the last few years.
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| “There are plenty of legal remedies available to suppliers to ensure prompt payment, or at least to provide compensation in the event that payment is delayed. In particular, the law provides for payment of substantial interest, currently 8.5% on commercial debts unless the contract expressly provides otherwise. The relevant legal provisions are also to be strengthened by March 2013, on the back of EU legislation, which aims to limit agreed payment terms for most contracts to 60 days.
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| “The problem of course is that regardless of the legal position, many suppliers feel that they cannot insist on payment of the interest which is lawfully due to them where they have an on-going relationship with that customer, for fear of damaging the future relationship. Creditors have to weigh this risk against the impact of late payment on their cash flow and when the balance tips they need to enforce their rights.
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| 30.01.12 |
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Want Odds of a Corporate Bankruptcy? There's an App for That
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| As trite as the "There's an app for that" saying has become with the growing cultural dominance of smart phones and similar devices, a new application apparently does exist to help professionals quickly determine the likelihood of a corporate bankruptcy. And it's coming from a source familiar to veterans of monitoring trends in bankruptcy.
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| New York University professor Edward Altman, father of the 1968 bankruptcy predicting model known as the "Z-Score," is up to his old tricks, but in a whole new, high-tech world. Altman has unveiled a new application (or "app" as the tech-friendlies refer to them) for iPhone/iPad, Android and BlackBerry products called the "Altman Z-Score Plus."
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| The app, which retails for about $100, relies on the Z-Score model to determine the likelihood of publicly-traded U.S. company bankruptcies, like the original model from four-plus decades ago, as well as new wrinkles including many private firms, notably in the manufacturing field, and some internationally based outfits, particularly some key ones based in China.
Brian Shappell, NACM staff writer
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| 27.01.12 |
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En ny fattigstandard |
| En ny fattigstandard er innført i Europa. Det sørget kredittvurderingsbyrået Standard & Poor’s for. Nedgraderingen av ni europeiske lands kredittverdighet har sørget for at regjeringene og skattebetalere må betale en høyere rente |
| Land som Frankrike og Østerrike har mistet sin status som ”trippel A (AAA) og dermed fått en bulk i karosseriet. Det samme skjedde med EFSF, EUs midlertidige lånefinansieringsordning som skulle stå som en garantist for de landene med størst problemer slik som Hellas og Portugal og kanskje Spania og Italia. Ved denne operasjonen kan det hende at fondet ikke får tak i de 575 milliarder €uro som var planlagt. Nedgraderingen har fått EU-kommisjonen til å tenne og det samme har skjedd i de landene som trenger hjelp. Det er samtidig uttrykk for at S&P’s ikke tror hva politikerne sier og dermed putter ekstra kjepper i hjulene slik at de får rett i sin nedgradering. Det blir med andre ord en selvoppfyllende beslutning. Det er tre store kredittvurderingsbyåer i verden og alle er amerikanske. |
| Hvem som jobber der, hvordan de ser ut, hva de egentlig driver med og hva drives de av, er det ikke så mange som vet? De jobber i første rekke for private anonyme investorer slik at de ikke skal bli lurt og rote bort pengene sine på tvilsomme statsobligasjoner. At det rammer folk flest og gjør den økonomiske og politiske ryddejobben enda mer vanskelig, kanskje umulig, inngår ikke i de skjemaene, matrisene eller hva de nå benytter seg av for å stille sin analyse. Men S&P har unektelig ett poeng som de deler med europeisk fagbevegelse: De tror ikke at sparehysteriet vil bringe ny vekst og etterlyser stimulanser i økonomien.
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| 24.01.12 |
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Siemens tynges av eurokrisen
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| Resultatet for fjerde kvartal bærer preg av usikkerheten i Europa |
| Det tyske industrikonglomeratet Siemens fikk et nettoresultat for videreført virksomhet på 1,36 milliarder euro (1,2) i det brudne regnskapsårets første kvartal.
Ventet nettoresultat var 1,4 milliarder euro, ifølge Reuters estimater.
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| Toppsjef Peter Löscher forteller at selskapet merker usikkerheten knyttet til krisen i eurosonen godt.
- Selv om en gjeninnhenting er forventet i andre halvdel av året, så må vi jobbet hardt for å nå målene våre, sier han, ifølge Bloomberg.
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| 24.01.12 |
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Small Business Outlook Remains Dim, According to Chamber
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| A recent survey of small businesses found economic optimism in short supply, at least on a national level. Locally, however, the outlook was considerably more positive
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| In the U.S. Chamber of Commerce's Small Business Outlook Survey for Q4 2011, a whopping 85% of respondents said that the U.S. economy was on the wrong track, while 63% said that they would keep the same number of employees over the next year. On a local basis, however, the most recent data showed a significant increase in the percentage who believed their local economy was on the right track, from 33% in Q3 to 45% in Q4. The data was even more positive on a company-by-company basis, with 69% of respondents saying that they believed their business was headed in the right direction.
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| The poll indicated that the larger the scale, the more pessimistic the outlook was for small businesses, and the chief culprit for all the national economy's trouble could be found on Capitol Hill. Seventy-eight percent of small businesses surveyed reported that the taxation, regulation and legislation from Congress make it harder for their business to hire more employees, and 86% said they would rather have more certainty from Washington than more assistance (6%) to deal with the economy.
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| 20.01.12 |
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Atradius Collections' Collect@Net 3.0 goes live today |
| Atradius Collections, the global expert in domestic and international debt collections, releases the third version of Collect@Net, the leading online debt collections management and communication system
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| The new version has undergone a major facelift in terms of functionality and look and feel, resulting in an interface that boosts a new level of ease and efficiency for businesses handling their collection cases online.
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| "Transparency was a key request we continuously heard from customers," says Ralph van Dijk, Commercial Director at Atradius Collections. "Based on research and customer feedback over the past three years the new Collect@Net has been designed to deliver a new level of transparency and control for the customer." Some of the improvements include an expanded and therefore more detailed reporting section, additional specific information on case histories, as well as new interactive features, such as a messaging tool to directly communicate with a collector.
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| 17.01.12 |
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One in ten small business owners put their own homes on the line to continue trading |
| New research from borro, the UK's leading personal asset lender, shows that over the last year more than one in ten (12%) small business owners in the UK have had to put their own homes on the line as a guarantee for a loan to continue doing business in 2011
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| The survey of 300 owners and directors of small businesses also showed that a further third of small businesses (33%) would consider using their home as a guarantee if they couldn't get any other kind of finance to help with issues such as cash flow problems, late payments from customers, tax bills and staff wages.
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| The analysis goes on to reveal that the number of small business owners considering using a secured loan to get the capital they need to continue growing is now at the same level as those considering using an unsecured loan (38%) and an overdraft facility from their bank (33%).
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| 16.01.12 |
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Internasjonalt fokus på markedsføring av kreditt til forbrukerne
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| Forbrukerombudet deltok i høst på en internasjonal undersøkelse der EU- og EØS-landene kontrollerte nettsidene til ulike kredittformidlere. - De norske kredittformidlerne kom generelt godt ut av undersøkelsen, men kan bli bedre når det gjelder prisopplysninger, uttaler forbrukerombud Gry Nergård.
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| Markedsføring av kreditt til forbrukerne har vært et av Forbrukerombudets særlige fokusområder i 2011. På grunn av finanskrisen har dette også vært et høyt prioritert tema på EU-nivå, med vedtakelse av flere direktiver som regulerer finansielle tjenester.
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| Målsetningen for EU-undersøkelsen var å kontrollere om kredittyterne fulgte kravene til informasjon og forbrukerbeskyttelse i nasjonal finanslovgivning, med særlig fokus på: villedende markedsføring av kreditt, utilstrekkelig informasjon og rådgivning til forbrukerne ved inngåelse av en kredittavtale, og eventuelle urimelige avtalevilkår i forbrukerkredittavtalene. 27 medlemsland deltok i undersøkelsen, i tillegg til Norge og Island.
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| 16.01.12 |
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Economy, Politics Among Credit Professionals’ Top 2012 Concerns
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| Credit professionals still consider the economy to be their biggest concern for the coming year, according to an annual survey conducted by NACM |
| For the third straight year, when asked "Looking forward to 2012, as a credit professional, what are your biggest concerns?" the largest percentage (26.7%) of the nearly 1,000 participants chose "lingering uncertainties about the still-sluggish economic recovery." The result was expected, as credit professionals continue to face stagnant business conditions along with lingering bankruptcies, preference actions and customer difficulties.
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| The top concerns garnering the majority of survey responses included:
•Lingering uncertainties about the still sluggish economic recovery (26.7%)
•Slow payment, delinquencies and general customer creditworthiness (19%)
•Job security, the future of your career, or ensuring that salary keeps pace with cost of living (11.7%)
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| 22.12.11 |
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Payday loan explosion to meet the cost of Christmas |
| More people than ever before will buy Christmas presents for loved ones this year with the help of a microloan – otherwise known as a payday loan |
| More than two million people in Britain are now believed to have applied for the increasingly popular short-term loan.
And with the majority of people now having received their last payday before the festive season, experts are predicting that microloans will be in greater demand than ever to help buy last minute gifts.
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| Ian Porter, UK Sales and Marketing Manager with Ferratum, Europe’s biggest online microloan lender, said: “The expected surge in demand for microloans in the run up to Christmas is due to a number of factors.
“Among them is people’s need to find a few extra pounds to help buy last minute gifts or food for Christmas, but also the growing awareness of the simplicity of payday loans and how they can provide short-term help when you run short of money.
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| “We are already seeing a significant increase in applications for our microloans and we still have three weeks to go until Christmas Day.
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| 12.12.11 |
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Sentralbank-penger hindrer ikke en skikkelig kredittskvis
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| Bankene vil kanskje unngå konkurs, men bedrifter og forbrukere må se langt etter lån, mener sjefanalytiker |
| Som vanlig går ikke alt på skinner på EUs toppmøte i Brussel hvor Storbritannia setter ned foten for traktatsendringer som skal styrke budsjettdisiplinen, hvis ikke landet får visse unntak.
Frankrikes president Nicolas Sarkozy la ikke skjul på sin skuffelse og kalte kravene britene stilte for uakseptable
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| I går annonserte den europeiske sentralbanken at den vil stille ytterligere likviditet tigjengelig for bankene gjennom tre års lån. Samtidig lemper ESB på sikkerhetskravene.
Sjefanalytiker Erik Bruce i Nordea Markets mener mer hjelp fra sentralbanken til bankene likevel ikke hindrer en kredittskvis. |
| Uansett, i en verden hvor bankene lever på sentralbankfinansiering og ikke får normal finansiering i markedene, vil de kutte ned på utlån til bedrifter og forbrukere, og da blir det kredittskvis i Europa, sier han til iMarkedet Xpress.
Bruce sier at man kanskje unngår bankkonkurser på kort sikt, men man hindrer ikke en skikkelig kredittskvis, hvor bedrifter og forbrukere ikke får lån.
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| 09.12.11 |
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Largest U.S. Bankruptcy Proceeding Hits Home Stretch on Judge's Approval
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| The Lehman Brothers bankruptcy plan has been approved—finally—more than three years in the making. But could the end merely be the beginning, attorneys ponder?
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| Judge James Peck of the U.S. Bankruptcy Court for the Southern District of New York appeared almost relieved as he approved the latest plan by Lehman Brothers, which filed the largest Chapter 11 bankruptcy filing in U.S. history nearly three-and-a-half years ago. Marked by its size, drastically different plans and legal wrangling between creditors, Peck characterized the bankruptcy proceeding as the most difficult ever seen in U.S. courts. Lowenstein Sandler PC attorneys Bruce Nathan, Esq. and Scott Cargill, Esq. agreed.
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| The plan includes a three-year schedule of liquidating assets, with much of the $23 billion currently available in cash to be distributed within months. Additionally, creditors are likely to get back significantly more than anyone predicted, as the process unfolded at a snail's pace. Granted, most of them are still taking a pretty sizable hit.
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| 09.12.11 |
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Varsler nedgradering av samtlige euroland |
| I tillegg til at eurosonen seks sterkeste økonomier kan miste sin topprangering, står også øvrige euroland i fare for å bli nedgradert av S&P, ifølge Bloomberg
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| Tidligere mandag kveld gjorde Financial Times det kjent at kredittvurderingsbyrået Standard & Poor's har satt Tyskland, Frankrike, Nederland, Østerrike, Finland og Luxembourg på negativ kredittovervåking.
Det betyr at landenes topprangering, trippel A (se faktaboks), har en femti prosents sjanse for å bli nedjustert ett hakk til «AA+» i løpet av de neste 90 dagene.
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| Nå melder Bloomberg TV og Bloomberg News , som viser til to ikke-navngitte kilder, at samtlige 17 land i eurosonen kan få sin rangering nedgradert.
- Negative nyheter vil komme til å fortsette å skape oppturer i obligasjonsmarkedene, i det minste inntil den europeiske sentralbanken rykker inn og avslutter dette rotet en gang for alle. S&P kan tjene til å skremme markedene, men jeg tror ikke vi vil se noen ferske politiske grep utelukkende basert på et kredittvurderingsbyrås mening, sier sjefstrateg for kreditt, Guy Le Bas, i Janney Montgomery Scott til Bloomberg.
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| 06.12.11 |
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New software enhances speed of International Collections
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| Euler Hermes Collections UK, a company of Allianz, has launched a new software platform that will considerably enhance the speed and efficiency of its current UK and international debt collections service |
| The new system, which has been developed specifically for Euler Hermes Collections over the last 12 months, will provide customers with online access to all of their cases placed anywhere in the world, via a dedicated client portal. “Clients will be able to review in real time the status of any outstanding debts and see instantly what debt recovery actions have been taken, giving clients a clearer picture of when they can expect payment from their debtors,” says Phil Mercer, Managing Director of Euler Hermes Collections UK.
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| The investment in this new IT system reflects the importance Euler Hermes places on their collections service, which last year received more than £1bn of debt placements spread over 100,000 debts in over 120 different countries.
The new system means that when a collection instruction is received, it is automatically routed to the relevant debt collector located in the country of the debtor and will result in the debt collection action being activated without delay by professional debt collectors. The collectors will be native speakers of the relevant country with dedicated training and in-depth knowledge of the local collection and legal frame work.
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| 02.12.11 |
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European Professional Services hit hard by bad debt |
| A survey of almost 6,000 businesses across Europe shows significant differences in how industry sectors are hit by bad debt and late payments. Businesses in Professional Services on average have to write off 4.5 percent of all transactions whilst businesses in Utilities only write off 1.5 percent. Credit Management Services Group Intrum Justitia believes the situation will worsen in 2012, but that there are protective measures to be made by businesses, measures essential to boosting Europe.
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| European Businesses write off a record total € 312 billion or 2.7 percent of all transactions. However, this burden is not spread evenly across the different industry sectors – the industry hardest hit, Professional Services (For example Accountants, Law Firms and Recruitment Industry) write off three times the percentage of sales of Utilities (Gas, Water and Energy). Construction & Building, Real Estate and Education have to write off well above average, whilst Transportation and Business Services are doing better than the average.
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| 28.11.11 |
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65% of Credit Professionals want Government to protect SMEs from late payments
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| Survey of members of Institute of Credit Management reveals late payments still a major issue as Equifax reveals increase in use of credit data
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| London, November 2011 – The latest survey of credit management professionals, conducted jointly by the Institute of Credit Management (ICM) and leading business information provider, Equifax, reveals a huge increase in the use of credit data compared to 2010, as businesses look to reduce their risk of bad debt. In the survey of ICM members, 86% said they use credit and business data checks for new customers and suppliers, compared to just 37% last year. And 85% use data for ongoing monitoring, but only 41% said the same a year ago.
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| In 2010, 59% reported an increase in late payments that year, but this is down slightly to 52% in 2011. Over a third (36%) are chasing late payments up to 3 days sooner than they were a year ago, up slightly on 2010. And 20% are chasing four days sooner, compared to 29% twelve months ago. Late payments remain a major issue for businesses, which accounts for the sharp increase in the use of data checks and ongoing monitoring, as firms keep a closer eye on new and existing customers and suppliers.
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| The survey shows that the current market conditions continue to put a strain on businesses, with 65% saying the Government should offer more support to protect small businesses from the negative impact of late payments. This is down on the 77% who said the same last year, but clearly shows a significant level of dissatisfaction.
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| 21.11.11 |
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Bankruptcy Filings Fall in Fiscal Year 2011
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| Bankruptcy filings fell by 8% in the federal government's fiscal year 2011. Overall, a total of 1,467,221 cases were filed between October 1, 2010 and September 30, 2011, as opposed to 1,596,355 in the same period the year prior |
| For businesses, the difference between this fiscal year and last was even greater. According to the Administrative Office of the U.S. Courts, the agency that keeps track of filing behavior, business bankruptcy filings fell by 14%, from 58,322 in the 12-month period ending September 30, 2010, to 49,895 in FY11.
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| 18.11.11 |
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FCIB Global: 'Change' a Recurring Theme among International Credit Managers
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| Despite divergent topics discussed during the opening trio of sessions at the FCIB Global Conference at the Ritz-Carlton Palm Beach, one theme seemed to beam out of the sessions: change (and being able to adapt the large amount of it going on in business and credit at present)
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| Sanjiv Sanghvi, of Wells Fargo Bank, noted in the opening session that a few changes in leadership in Europe (Italy, Greece) doesn't automatically equate to a stabilized Europe and that credit professionals need to be wary going forward.
"It's tough to believe that putting technocrats in power will mean that things will be run in a fundamentally different way," he said.
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| Sanghvi also noted that the coming Basel III changes will require businesses worldwide, and notably their credit departments, to stand up and take notice. All told, the Basel III changes and what seem to be some almost hidden requirements could force financial institutions to literally double their capital holdings. As such, he believes banks forced to change their ratios will simply handle the equation on one side or another: raise the costs to borrow or reduce assets in the game.
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| 18.11.11 |
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Debt and depression: Twin evils that need to be fought together |
| Mental illness and money problems very often go together but the link is still unclear
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| Nearly nine out of 10 people with significant debt problems also appear to be suffering from mental health disorders, particularly depression and debilitating anxiety. This alarming statistic, which comes from the Consumer Credit Counselling Service (CCCS), helps to explain why so many banks are now setting up special mental capacity and health units in their debt collection teams, and why the Office of Fair Trading (OFT) has just issued guidance in the area.
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| CCCS – which advised more than 400,000 consumer debtors in 2010 – employs a questionnaire as the first step in its online debt counselling service. Users of this facility are not told at the outset that the questionnaire also tests for possible mental health issues. When compiling the statistics over a month, CCCS found that 86 per cent of people indicated positively for potential mental health problems, ranging from mild to serious. CCCS then recommends to these people that they take further tests or see their GP.
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| 15.11.11 |
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Largest Municipal Bankruptcy in U.S. History Filed |
| Largest Municipal Bankruptcy in U.S. History Filed After Creditor Deal Crumbles
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| Many weeks ago, it seemed Jefferson County, AL officials and its main creditors on a sewer renovation project that has sucked its coffers dry had enough of a framework for a deal to help the community avoid filing for Chapter 9 bankruptcy. But then, the prospects for such a deal were gone and the largest municipal bankruptcy in the history of the nation has now gone on the books.
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| Jefferson County Commissioners voted 4-1 Tuesday evening to declare bankruptcy. Alabama Gov. Robert Bentley confirmed publicly that a deal with creditors that could have renegotiated upwards of $1 billion of the $3 billion in debt tied to the sewer renovation had fallen through before the decision. The Chapter 9 filing, which lists the county's debts in excess of $4 billion, is nearly double that of the well-documented filing in Orange County, CA nearly two decades ago.
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| 11.11.11 |
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