Why it's important to have a third-party monitor your industry credit
group - The Pitfalls
By Suzzanne Stanford, CCE CEW
I recently saw this inquiry:
We don't have an official credit group for our industry
but a handful of us share "credit inquiry" type info about
customers on a regular basis. One of the members has suggested we
hold a quarterly telephone meeting to discuss issues to help with "common
collection problems and industry trends". We would be our own
moderators. I'm not sure how this can be accomplished without getting
into "collusion." issues. Before I respond to them I would
like your thoughts on the matter.
My immediate response was:
it is very important to have a permanent record of what information
was asked and what information was shared.
To protect your company and your own personal backside if your group
was accused of collusion. Meeting anywhere without an official third-party
monitor puts you in a position to be named in a potential lawsuit.
Imagine two or three of you meeting for lunch and being
seen, or you casually talk together on the phone. And watch out what
you say in those emails. There are black and white guidelines as to
what can or cannot be said. Having served for eight years as a Corporate
Credit Manager and ten years as an NACM group monitor - you probably
would NOT believe some of the things that happened in industry credit
group meetings! The information we used to share - - when we didn't
know any better, would scare the hair off your head.
Even when I monitored meetings - - there were surprises
sometimes within and sometimes outside of the meeting. The situations
had to be handled quickly and with finesse in order to cool down the
group's mutual customer[s]. Not all credit professionals know what
they can say, and sadly a few do not care :-( After all . . . they
all know each other, don't they?)
Imagine a colleague visiting your mutual customer and
mentioning that they know your company isn't going to extend credit
to them either. Whew, have I seen a lot of scary things. A lawsuit
is so easy to file. Perhaps your customer doesn't file a lawsuit but
contacts your company's senior management with their alleged grievance.
If this happens, guess who gets blamed and could potentially lose their
"Cover your Backside and Protect your Company" Establish
an industry credit group, but have a third-party monitor it, whether
it be an attorney or an organization who specializes in credit groups.
You'll gain the tools necessary to perform with more success than by
simply exchanging credit inquiry type information. Under a protected
atmosphere you'll gain more extensive credit information, discuss industry
trends and new techniques, and can even do salary surveys - - (just
don't tell your boss about this one.) Some NACM affiliates will monitor
your group over the phone so that you can avoid the meeting expense
if that is an issue.