Dean Ferney (December 4, 1982)

              Voices From the Past
Dean Ferney
By Dean Ferney
December 4, 1982
Tape # 53
Oral Interview conducted by Harold Forbush
Transcribed by Wendy Crofts
Edited by Emily Crane January 2008
Brigham Young University- Idaho
Dean Ferney Interview
This is a taped interview with Dean Ferney pursuant to the project, Oral History of the Upper Snake River Valley, and the primary subject of the interview is the Credit Bureau of Eastern Idaho Incorporated. The interview is being done on Saturday the 4th day of December, 1982 here at 68 East 1st South Rexburg, Idaho. Harold Forbush conducting the interview.
Harold Forbush: A few preliminary questions, Dean, and incidentally, how do you spell the name Ferney?
Dean Ferney: It‟ s spelled F- E- R- N- E- Y.
HF: Are there other Ferneys in the Upper Snake River Valley?
DF: There used to be a number of Ferneys in St. Anthony area years ago [ telephone rings] back in the 1920s, „ 27 and through, maybe, into the 40s there was a family of George Ferney. He was a grandfather of my father, and he had a brother, Jim, and---
[ Interrupted— tape skipped]
HF: Are there any of these people still around, your kin?
DF: There‟ s some brothers of my father around, not here though, they‟ re scattered around the country. I don‟ t think there‟ s any here but—
HF: But as far as you know the Ferneys under that name are all kin?
DF: Oh yes, yeah, there‟ s only one— I think any Ferney out here would be related alright.
HF: In the intermountain area?
DF: Mhm.
HF: Whether it‟ s in Idaho or Utah or Colorado or wherever?
DF: I don‟ t know about going that far. I know they moved out here from Iowa, I think, in the first place. My grandfather was really quite a pioneer in St. Anthony, I guess, he was the first Studebaker auto dealer in St. Anthony, and he also owned and operated the La Monte store up there way, way back in the 20s. I‟ ve got pictures of that. You know, where the La Mont store is up— it‟ s up above Ashton, up above Drummond, it‟ s between—
HF: Oh, yes. Mhm. On the railroad line. DF: Yes, it‟ s on, yeah, right.
HF: Between Ashton and Tetonia.
DF: Ashton and Driggs, yeah. I mean, I don‟ t know if you want to know any of that stuff or not, but…
HF: Did he farm?
DF: No, I don‟ t think he ever farmed much. My father did. I was raised on a farm up above Drummond.
HF: Where were you born?
DF: I was born in St. Anthony.
HF: Date, and what was the date?
DF: 7- 27- 27. [ Chuckles] A lot of sevens.
HF: Yeah. I see, and who was your mother?
DF: She was Leona Atkinson, and her parents farmed on a farm up by Squirrel, Idaho. That‟ s up— you know where that is, that‟ s up about Drummond.
HF: Now that‟ s Atkinson, A- T- K- I- N- S- O- N?
DF: Right.
HF: Now that‟ s a pioneer family name, isn‟ t it?
DF: I would think so, yeah. I don‟ t know too much about their history except that, you know, starting there on the farm, that‟ s all I know, really. I don‟ t know. We‟ ve probably got it in some records, but I don‟ t know off hand.
HF: Uh huh. Do you have brothers and sisters?
DF: I have one brother is all; we only had two in the family, and he was quite a bit younger than I was. He lives in Denver, has lived there for quite some time.
HF: Now, did you continue to live in the St. Anthony area, grow up in the area?
DF: Well, I was raised on a farm up above Drummond until time to go to high school and then the first year I boarded in St. Anthony. Well, I boarded all through high school in St. Anthony, and we lived in Ashton. We moved to Ashton, but I went to high school in St. Anthony, and we moved from the farm. We bought a house in Ashton the second year after when I was a sophomore, and then when I got started to going to school, I didn‟ t want to change schools so I just boarded out and stayed with people in St. Anthony when I went to high school during the winter.
HF: Did you go on to college?
DF: I went to, yeah, I went to college for— Oh, I went to Logan for probably two semesters. Well, I went to Rick‟ s College first, then I went to Logan. I went for about one semester at Rick‟ s, then I went to Logan when I got married. And then came back and went to Rick‟ s a couple more semesters. And that was the end of my college; I didn‟ t finish.
HF: Did you pursue any particular career or business endeavor in these early years?
DF: Now, I probably did a lot of things. I owned the service station in Ashton to start with, probably. Well, no, first off I worked for the county, and we were the first— I worked for the county assessor, and we were, when they first revaluated the county of Freemont County I worked with— and we went out and measured all the farmland and all the buildings in Freemont County and revaluated the whole county.
HF: Who was the assessor in Freemont County at that time?
DF: Floyd Law. He was the assessor there for quite a long time.
HF: Mhm.
DF: And then I got involved a lot at the service station in Ashton, and then my brother- in- law moved to Denver, and he had some connections over there with the feed lot, and he wanted us to move out there so we went out there and lived in Denver and worked around the feed lot, and I think I got to where I worked on a dairy. Let‟ s see, I sold milk, retail house to house, you know, run one of these little dairy cars or milk cars there, you know. They‟ re not a car, but they carry the milk, and you deliver milk. That was— worked that for a year and then I decided to come back to Idaho, and we moved back to Blackfoot, and then I got a job at the- AEC site. I worked at the site for, oh, five years, I guess.
HF: Now this was in the 50s?
DF: Yeah, „ 50— probably about „ 55, four to five in there.
HF: A major portion of the construction had been done by then out there, I guess?
DF: Yeah, right. I didn‟ t get on the construction; I worked for CPP, they called it, that‟ s where they dissolve the uranium slugs, redissolve them and melt them down and use the uranium again. I was in the chem. lab where I controlled this company, I mean, controlled the operation of the dissolving of the slugs and their operation. It was quite an interesting job; you did it— there was some tests you did with tongs and long fingers in the cubicle where so you wouldn‟ t get the radiation, you know, and there was other tests just we did just in the lab. There must have been 30 or 40 tests we had to learn. And I did that for up till 1960. In March of „ 60— I don‟ t know, they were having a cut back there like in— well, cut back in funds like the government does every— like now, you know? So they were going to have to lay off people or cut you back, so I got to looking around to see what else I could do. We came up to this area and this Credit Bureau. Someone we had known the people in Blackfoot that run the Credit Bureau and he had mentioned that this was for sale. So we came up and looked at it, and I think we put 50 dollars down and went back home and decided whether we wanted to do it or not. And the next day we sold our house, in one day. Now let‟ s see I went to a real estate agent the night before and went to work the next day, and the house was sold when I got home.
HF: So you decided to leave Blackfoot and come to Rexburg?
DF: Right, and that‟ s March 1960 we moved to
HF: To take over the
DF: To take over the Credit Bureau.
HF: I see. Let‟ s go back just a minute before we get into the real topic. And you have commented that you married while you were still in school. To whom did you marry, and when?
DF: I married Jackie Glover in January of „ 47. And her folks was Arvin Glover, Arvin Lagetta Glover. He lived— they lived in Ashton at that time, and he was in the seed business. He was a manager at Charter Seed Company.
HF: Was that a pea seed?
DF: Right.
HF: And they had been in business, then, for some time?
DF: Yes, Charter Seed had been.
HF: The Glovers were not early pioneers though, where they? Or were they?
DF: Well, I would say, yeah— I would say they were. They came here, and there was about eight brothers and a couple of sisters and, let‟ s see, where‟ d they— I guess they lived around Ashton and St. Anthony.
HF: How do you spell the name? G- L…?
DF: G- L- O- V- E- R, they all went to Rick‟ s College down here, and they were, I guess they were in boxing and whatever sports they were really pretty good. I would say they were probably real pioneers.
HF: Of the Ashton area, Ashton [ Inaudbible]
DF: Right.
HF: Great, okay then. You have had a family, haven‟ t you?
DF: Yes.
HF: How many?
DF: Three. Two boys and a girl.
HF: I see. Well now, Dean, I have come to know you, and when I think of Dean Ferney, why, it‟ s associated with the Credit Bureau of Eastern Idaho, Inc. Tell me, you took over this business in 1960. Was it referred to as, under that name and style?
DF: It had the same name; it was Credit Bureau of Eastern Idaho, but it wasn‟ t incorporated.
HF: I see. Who operated it? Who founded it?
DF: Allen and Ruth Staddon started it as far as I can tell. They probably ran it two years before I bought it and they
HF: How do you spell their names?
DF: S- T- A- D- D- O- N, and Ruth, Ruth Staddon, R- U- T- H, they lived in Teton, Idaho.
HF: Just up the way here, 10 miles up Teton City.
DF: Right, yes.
HF: Where did they have the business?
DF: The business was located at 30 Carlson Avenue, and that‟ s where I operated it for several years, right next to Bill Kennedy‟ s office at that time.
HF: On Carlson Avenue?
DF: Right. Carlson Avenue is only one block long, you know.
HF: Had— now you mentioned that they had operated for about two years? DF: Yes. That‟ s the best of my recollection. I think it was about two years.
HF: Now, what‟ s the purpose— you went ahead and incorporated. Why‟ d you do that?
DF: Well, we didn‟ t do that probably for, gee, you know, until about 10 years ago, I guess. The purpose, only for business incorporating is to protect yourself, I would say, on any liability from some error you might have made in some suit. I mean we‟ re dealing with a subject here that you can— there‟ s a lot of suits filed against credit bureaus and for, you know, errors on part of your help or somewhere. We‟ re lucky we‟ ve never had any suits, but that‟ s the main reason to incorporate the Credit Bureau.
HF: Now, what is the purpose of the Credit Bureau of Eastern Idaho?
DF: There‟ s two main purposes in a credit bureau, with any credit bureau. There‟ s probably around 3,500 credit bureaus in the United States, and they all belong to one national association, and that‟ s the Associated Credit Bureaus of America. Now there‟ s, like I mentioned, there‟ s two departments. One‟ s credit reporting and the other one is collecting of bad debts. In a small area like this the largest part of the business is collections, probably about 80 percent collections and 20 percent credit reporting. The credit reporting business is really changed in the last five or six years. It‟ s gone computerized like everything else. It used to be that we would keep manual files, and that‟ s the only thing we would keep. We would have, somebody would call in for a credit report. Well the credit, maybe I should explain first the credit reporting is keeping a record of how individuals pay their bills, and this is— the purpose of this started right after the end of World War II when credit really came into being. They had to have some way to control the good credit with the bad credit. They always say out of 10 people one person probably refuses to pay his debts and the other two are slow, and the seven are good, and that‟ s about an average of national
HF: That‟ s interesting.
DF: And so they had to have some way to control the credits. So the businesses got together way back after the war and decided they would farm merchant- owned bureaus. So they all got— merchants would get together and form a credit bureau and then it went from there into individual ownership. I guess there was more incentive when they had individual ownership to run the business more efficiently. So at any rate, the credit reporting keeps record from these various businesses in the areas and also on a national basis of how people pay their bills.
HF: For example, Joe Blow moves into Rexburg, and he goes to the Valley Bank to get a loan. He reports that for the past 10 years he has lived in Hoboken, New York, a little community in New York State. So do they— does the bank call you and say, “ Mr. Ferney, can you get me a credit reading on Joe Blow?”
DF: Yes, they do. This is the HF: That‟ s the procedure.
DF: That‟ s the procedure. All the banks, finance companies, department stores, any credit card, mortgage company for a home loan, all of these businesses, I would say, nearly 100 percent call the Credit Bureau for a credit report before they complete the loan.
HF: Now you would call Hoboken, New York and get all the data you can get back there on this man, I guess, wouldn‟ t you?
DF: Yes, that‟ s the way it used to work. Now we‟ ve changed a little bit. We used to— in fact, they used to have to furnish us references, people they‟ ve dealt with back there, and then we‟ d call back to New York, and we‟ d furnish these references, and if the credit bureau back there didn‟ t have a file then they‟ d call these references themselves and then call and report back to us. Well now it‟ s changed.
HF: Now just a minute. At that point, after you had gotten all the report, then you filled out a file or a form, some type of format, and submitted it to the Valley Bank?
DF: Well they had to—
HF: Requested it.
DF: They had the choice. If they wanted it written, we would give them a written. If they wanted verbal, we‟ d just give it to them on the phone and they write it down.
HF: Okay, then. But you would, you had some basis of charging a fee for that service?
DF: Right, we would charge a fee for the type of form.
HF: How was that determined, how was the fee determined?
DF: Well, there‟ s this one thing, an oral fee is less than a written fee, and then on top of that, we would charge the tolls and the costs that go to that bureau. That bureau back there might charge us a dollar and a half, the tolls might be four or five dollars, our fee
HF: The telephone calls?
DF: Right, the telephone tolls. Our fee would probably be three dollars for a report, and for a written report might be for five to ten dollars, depends on the report. So it‟ s all based on that. Now, like I say, the reporting is changed, and we don‟ t have to call New York anymore with the computer. We have a terminal in our office that‟ s hooked up with a computer in California. Now there‟ s two or three large computer agencies that keep this information in their files in different parts of the area. Like we call ours TRW, and that‟ s what we‟ re hooked up with down in California, and they cover a good part of the United States although you‟ ll find, like in the Seattle area, Washington, there‟ s another one up there. And there‟ s another one in Denver area, central. But yet TRW might cover, it might also have information from all these other places, so. And the way the information gets in there, most all the banks, the same people that call us, that are big companies, not the little clothing stores in town or the drug store, but the bigger companies turn their information into these central computerized recording agencies once or twice maybe, I mean, once a month or maybe every quarter, or every two months. Maybe they‟ re not all the same, but they turn the information in on a tape. Nobody has to sit down and type anything in or key anything in, it‟ s just sit in on a tape, and the tape‟ s just taken into the computer. And then the record is there of how this person— it shows the date he opened, his high credit, his balance owing, and how he‟ s paying his bills, whether he‟ s past due 30 days one time, three times, or ten times. There‟ s a record there of how many times he‟ s past due; that‟ s what it amounts to or they show if he‟ s a bad debt. It‟ ll show if he‟ s a write off, or if it‟ ll show up they want the collection, or it show all the suits.
HF: All the judgments that are brought against him?
DF: Right, now that‟ s not saying automatically that has to be done by the local areas, but to give you an idea of how this information gets in here, like you say, all these banks and everybody turn it in, and then we just key it up on our terminal. We have to go by identification by the person‟ s name, middle initial, wife‟ s name, and social security number, employment if we got it, but if we got that information we can
HF: That gives you a definite I. D. then, doesn‟ t it?
DF: Right. With those three things, a wife‟ s name and social security number, that ties it down pretty much so we can identify. There‟ s lots of people with the same name, but that ties it down, and it all— the computer also checks and looks at the address, and if we show a previous address it‟ ll show on it.
HF: Now you have the terminal here.
DF: Right.
HF: In your office.
DF: Mhm.
HF: And how quickly can you come up with some hard information on Joe Blow?
DF: I‟ d say in about a minute and a half. We can call, we can key in. See we got choices; we don‟ t have to go to California. We can get into these other computer centers like Denver or Seattle. We have a code, and we can just key into that, and of course, we have to pay that company over there a certain amount, a dollar, two dollars, or something. But instantly we just key it in and it comes out written right in front of us on a type- written report. It shows all this information. Like it will show if he dealt when he opened with this bank over there, when he opened with his mortgage company, his credit card, his bank charge account, his master charge and all of these things are on there. Plus bankruptcies are in there, plus judgments are in there. These items are all in there, and we can pull them out in a matter of two minutes, just as long as it takes us to key it in.
HF: Do you have a trained computer operator in your office?
DF: Yes, we have three
HF: Two to three?
DF: We have three girls, and the girls are working collection. Everybody knows how to do everybody else‟ s job so that we might have three or four calls going at once, or if we get some call, we just have to put them on hold, or we‟ ll call them back when all the lines are busy.
HF: Well, now Mr. Ferney, what you‟ ve been describing is these various banks of information, Seattle or Denver or some place in California and back East and so forth, and you have terminals so you can check in, key into these storehouses of information along of credit, the credit rating of an individual. Now with reference to collections, do you have something akin or similar for collections?
DF: Well yes, this same terminal helps in locating people, you know. We can key in somebody we‟ re looking for, and it‟ ll give us his address and his employment, and if he‟ s, you know, applied for credit, or if he‟ s a person that deals in credit. Now that might be in there for a collection too, but it‟ s really a great help in tracking people down. Now, the collection— let‟ s mention one thing about credit reporting before we leave there. For anybody it should be understood that you have to have a signed contract with the credit bureau to get any information as a client. I mean, we don‟ t insist on give it to anybody that calls up on the phone. They have to have a signed agreement with us that their using this information for credit purposes.
HF: Okay, so with the Valley Bank, for example, you have a contract with them to furnish them and serve them in providing credit ratings.
DF: This is true, with every, right.
HF: Do you bill them monthly or something like that for the services you‟ ve done for them?
DF: Yes, every month they have a bill. Let me go one step further now with a computer. It‟ s gotten to where in the larger areas, not in our area, but in the larger areas most every bank has their own terminal. And they can key in, they don‟ t have to go to the credit bureau; they just have their own terminal. And they want a credit report, they key in this information on the debtor, and it pulls up the file if there is one, just like we do, and then this is automatically charged to their account with the credit bureau so they still pay the credit bureau for the service, but they can do it all themselves.
HF: It would be your larger commercial houses that would have that independent facility, wouldn‟ t it?
DF: Yeah, it‟ s not too far away, I mean Idaho Falls probably. There‟ s banks and different companies that have then down there, but Rexburg there isn‟ t any yet.
HF: There isn‟ t anyone in Rexburg?
DF: Right.
HF: The interview will be continued on track two of this tape interviewing Mr. Dean Ferney pertaining to his operation of the Credit Bureau of Eastern Idaho Inc.
[ Switch to side two]
HF: Track two continuing the interview with Mr. Dean Ferney on the subject, the Credit Bureau of Eastern Idaho Incorporated. Now, let‟ s go into some comments about the other purpose of the credit bureaus, that of collections. Is this quite a national thing?
DF: Yes, the collection is the same as reporting. There‟ s also a national organization. The collection agency doesn‟ t have to be a credit bureau. There‟ s usually, in the larger areas, probably two credit bureaus, and there might be 20 collection agencies in a town the size of Salt Lake. So what I‟ m saying is when we have the ability— well, in a national organization we all work together, and we forward accounts back and forth to collect. If we can‟ t collect them in our area, then the agency will forward it to another agency to work in the local area where the debtor may be.
HF: Now it‟ s very important for a creditor to be able to collect his accounts receivable. This is a tremendous concern with every business establishment that he have the means of collecting. I‟ m sure that he personally or the company personally makes an effort, but once it gets out of their control, and they can‟ t collect it, there must be a place where they can go to get some help.
DF: This is true. It‟ s a need that is necessary in any area in almost every business that deals in credit. The one fact— advantage of a credit bureau is that credit reporting is connected and the collection account goes onto the debtor‟ s file automatically so when a report is given, even maybe five or six years down the road, and if the account isn‟ t paid it may force him to pay the account to clear his credit file. Now there are laws controlling how long it can stay on the file, and that is seven years. An account stays on the debtor‟ s file seven years from the date of the charge.
HF: Now, does each state of the 50 states in the United States, does each one has its own laws governing the operation of credit bureaus? DF: Yes, Some states are— let‟ s back up. No, not every state has laws. For instance, Utah does not have any collection agency laws; however, they‟ re governed in other ways. The FTC governs this to some extent by the way we have to treat debtors.
HF: The FTC, the Federal Trade?
DF: Trade Commission.
HF: Commission.
DF: Mhm.
HF: They‟ re the federal agencies that control and regulate what, credit ratings and also collection operations?
DF: Yes, they want to make sure that we don‟ t— I don‟ t know how to say this. We, they want— they control how we work with the debtors. They don‟ t want us to make false- looking letters. We can‟ t issue a letter that looks like a legal statement unless it really is. We can‟ t tell them we‟ re going to sue them unless we actually do file suits. You just have to— you can‟ t falsify
HF: You can‟ t use letters, extort payment with threats and so forth.
DF: Right.
HF: And use the mails to do that can you?
DF: Not unless you really do follow through with these threats on a certain percent of your accounts. And that‟ s how the Federal Trade Commission gets in on controlling collection agencies.
HF: Historically, Dean, how far back do we go to the establishment of the first collection agency?
DF: Well, I would say back into the 19, probably the 1940s is when probably the same as the reporting. A lot of the collection agencies probably got started after the World War also because of the credit that got started and so they had to have ways to enforce payment, and that‟ s probably where it got started.
HF: Don‟ t you think that collection agencies existed and so forth before World War II?
DF: Well, I guess if you— I guess I‟ m just thinking about it as a large business. I‟ m sure that they had collection agencies of some kind. In fact, they used to have debtor prisons way back in the olden days in England, I guess. But—
HF: It really became a commercial activity after World War II though, I guess?
DF: Right. I would say so.
HF: Well now, for example, we‟ ll take this illustration: Joe Blow establishes a community here in, or a business here in Rexburg, and he doesn‟ t do very well. He doesn‟ t take out bankruptcy, but he does incur a lot of obligations to other business houses, to individuals, and so on. And he‟ s just a debtor to a lot of people. Now, the various creditors [ phone rings] have tried to collect their sums from him and have failed. Then they come to you. What can you do about that? What‟ s your procedure?
DF: We set it up for collection, and we keep every account on the same fellow together, and if we have to file a suit in our state we can file— we can lump all of these accounts together and file one suit. And then we can execute on this judgment of all of the accounts, and then we spread the money around. It‟ s sort of like pooling the accounts but not on a voluntary basis. We do it forcefully, and there are some agencies now that just pool accounts from the debtor coming in and listing him with them. And they keep a small fee and then spread the money around, but this usually doesn‟ t work too long, maybe one or two months, and then the debtor leaves and quits paying, and that‟ s the end of it. But in our business we have— if we sue we have a judgment, and if he quits paying, then we can garnish or execute on our judgment if he‟ s working or if he has assets. We feel we are quite lenient with this; we want, we check out the debtor to see if he‟ s working, or if he has assets, and if he doesn‟ t, if he‟ s a hardship case, we usually work with him and just set the file aside until he gets to work or until times change. And then we try to get payment again. And if he‟ s working, and we see some debtor that doesn‟ t respond to us then we can, we feel like we get just as hardcore on the other side. We can take all the steps possible to collect this account as far as we might levy on his vehicle or his house or sign him into court under supplementary proceedings. And this way we can find any assets that this person may have.
HF: Dean, as I understand you, however, before you bring suit against a debtor for a lot of obligations that he has incurred, you have a procedure of working with him; letters, or phone calls, or whatever. Is this correct?
DF: This is true, yes. We start out with two. The computer prints two letters. Now we have everything on our own computer, and it prints the first two notices. If he pays before the 10 days are up, then we pull out the second. But as soon as the first letter is sent out, then we have office people that call. They work the files, and they call these accounts maybe every two weeks. We go through all the files, and call them and see if we can‟ t get some payment arrangement worked out or payment in full or just what the situation is; if he‟ s working, and where he lives, and all these efforts are put forth to try to collect. Now anytime that— or every collection that comes in goes onto the person‟ s credit file so anytime that he applies for credit, this account is recorded as a collection. It‟ ll show whether it‟ s paid or unpaid. Then he gets turned down for credit. But then possibly he may come in and see why he was turned down. And therefore, and this may result in the payment of that account. HF: What procedure, before it goes to court, have you found to be the most effective?
DF: I don‟ t think you can beat the telephone. The telephone is probably the best collecting tool that you have.
HF: And you just, when your girls call the debtor, and say, “ Look, we‟ ve received this assigned collection. We‟ d like to chat with you about it. Can you come to the office?” You just kind of follow that line of—
DF: Well, we, yes, we really don‟ t ask them to come to the office. We feel that we can get the arrangements over the telephone. That‟ s just as good as taking our time and his to come to the office. We don‟ t take promissory notes. We, in any case, we try to make the arrangements on the phone and do it as quick and efficient as we can, and the most reasonable payment we can get out of him. I mean on the client‟ s side, we‟ re representing the client, and we want to get the most money that we can that we can get. We want to collect the account in full as soon as possible, and so our girls are trained to try to collect the account in full, and if it looks like it‟ s just impossible to do with his job and his income and the number of accounts, then we arrive on a payment. We don‟ t like to go under 25 dollars a month, mostly 50 or 100 if it‟ s at all possible. So it‟ s hardly worth our time to write up a five dollar payment.
HF: What‟ s a typical collection amount that‟ s been assigned to you?
DF: The average amount?
HF: Would you say?
DF: Oh, I would say nowadays the average amount is probably 300 dollars, 400 hundred dollars.
HF: And that may be one or two or three or four or five accounts?
DF: No, I was just thinking one account.
HF: Oh, just one account. Okay, so when you get in— do you have a debtor with a number of creditors after him?
DF: Oh yes, I would say over half our debtors have more than one account that they‟ re paying at a time. It just goes on a scale. The worst debtors have more accounts. The ones that are on the fringe, that we end up maybe only just— are good but they just get a little slow, then they have one. It just works right down the scale. Maybe a person gets into hard times then he‟ ll probably get maybe, you know, they‟ ll build up one, come in this month, another two to three the next month. And it‟ s just generally they have more than one now. The average size of the account is really kind of hard to say— it just depends on your client. Like we might have a floral shop, and their average account might be 30 dollars. Or we might have a hospital and their average account would be 600 dollars. And we have all these various accounts; it‟ s hard to say what the average is. I can, you know
HF: Would— you retain an attorney, do you, to enforce payment?
DF: Just collection. Definitely in suits, yes. We have our own attorney.
HF: You have no right to sue yourself.
DF: No right in the state of Idaho to file in the small plains quarter sue ourselves. Right, Idaho has a very definite set of collection laws, and we‟ re governed by the department of finance. We have to keep definite records, and we have to keep a trust account and many things that they control us. We have to be bonded for double of the amount of money we handle that we pay back to clients.
HF: What percentage of your collections end up in court?
DF: I would say probably less than five percent end up in court, really.
HF: How successful are you when you have to bring actions?
DF: Well, we research the ones we take to court, pretty much, so we don‟ t sue anybody that isn‟ t working. We feel, at least when they started, now in today‟ s times, one guy will be working today and next week he won‟ t be. Or he might move. It would be surprising how many people would move from the time we file an action until he served. But I would say our recovery on suits would be something like 50 percent, I guess.
HF: I see.
DF: Maybe a little higher. If you look at it over a whole period of time, we might have a suit for four or five years before it‟ s all paid off. Or maybe it will sit there four or five years and we lose the guy and we find him again in four or five years.
HF: Do you find that the actual bringing of suit and having him serve with summons gets some quick action?
DF: I‟ d say it does on oh, three out of five people if you sue
HF: Especially the new ones?
DF: The new ones, yeah.
HF: Who have never been sued before?
DF: Well right, it all depends, again on the person. I mean, you might get somebody you‟ ve sued four or five times before and you know you‟ re never going to see him; the only way you‟ re going to get the money is just keep garnishing. He may never ever come into the office. And then there‟ s others that will come in and want immediately to get some arrangements made because they don‟ t want to go to court. Really, you‟ d be surprised at how many people get summons and a complaint and they come in, and they say, “ I don‟ t want to go to court.” But they‟ re in court, they don‟ t know it, but they‟ re in court. But we will work it out with them then, hopefully, and we won‟ t have to execute and garnish.
HF: Now isn‟ t it so that there must be an actual assignment in writing that claim of the creditor to you authorizing you to sue or to handle that particular claim?
DF: Well, our attorney says no. Our attorney says a verbal assignment is as good as a written assignment. Now, we try to have written assignments on our legal paper, but actually, there‟ s some we don‟ t, so this is our opinion. That‟ s just what our attorney advises us.
HF: Have you retained Mr. William B. Kennedy as your attorney down through the years and his firm?
DF: Yes, ever since we started in business in 1960 we‟ ve had Mr. Kennedy as our attorney.
HF: Now you were on Carl— 30 Carlson Ave. for a number of years. When did you move from that location, Dean?
DF: Okay, we moved from that location to another building owned by Mr. Kennedy. The new address is on 10th West and 1st South, and we moved there in about ‟ 64 and we stayed there until about 1970. Then Kennedy built another office just next door, and we moved over to that in 1970 and stayed there „ until about 19— June of „ 74. Then we bought a computer, and we got a little too big for his size of office so we moved over to a building on 176 South 2nd West in Rexburg in June of ‟ 74. Then we stayed there through December of ‟ 78.
HF: And it was during that time that the flood— Teton Dam burst.
DF: Right.
HF: And had its adverse affect upon your office.
DF: Yes. Our office was a two story building, and the upper story was okay, but the lower part had our computer in it, and the flood did do a lot of damage to the basement.
HF: I see.
DF: Then we moved from there in December ‟ 78 to the 54 Professional Plaza where we are now. HF: Has there been much change in the— first of all, the personnel that you‟ ve had to hire from the time you started up to the present time?
DF: We‟ ve had— we haven‟ t had a large turnover. Our girls have worked for us for a long period of time. We had a Phyllis McBride that worked for us, gosh, probably for 12 years. We have a Loreah Bell that‟ s worked for us probably 15 years, and she‟ s still there. We have had a few girls in collection who have turned over. I don‟ t know, I don‟ t think we‟ ve had over five or six other girls working in collections during this whole period of time, 22 years.
HF: So your personnel has been what, three or four in the office all the time?
DF: Yes.
HF: You haven‟ t increased that number too much then over the 20 years that you‟ ve operated?
DF: We, right after the flood, we, well, during the, probably in the 1975 up until this last recession our— we dropped back in our help about a year ago. We had one other girl— we took another girl in reporting, and we‟ ve done away with that one girl in reporting and maybe a half a girl in collections since the high interest rates and the tight money has come about.
HF: Has the fact that you have a computer terminal and other sophisticated equipment now in your present location, has that been a means to make it possible to reduce your personnel?
DF: Yes, that‟ s true. We can set up a couple, 200 accounts now in probably an hour. It would probably take us a couple of days before, and the computer now will print out the acknowledgement, the first two letters, and that file is always in the computer, and as a client wants a record of what accounts he‟ s listed with us and the amount owing and a little history on what‟ s happened to him, we can pull it out in just a matter of minutes and furnish him with a report. So yes, it has helped us in eliminating a party as far as employees.
HF: You refer and infer that there have been some changes in these 20 years, good times, bad times, high interest rating, depression; all that has a direct bearing on your business.
DF: Yes, it sure does. You might think that the tight money would be good for our business, but it‟ s not good. It‟ s harder to collect and clients are more tight with their credit so they don‟ t have as many bad accounts. I think the best time in our business was probably right at the time of the flood, even before and shortly after was the high income, high business time for us.
HF: Lot of money around. DF: Yes, mhm.
HF: Can you give me an idea on a monthly basis, maybe, how many collections, how many referrals of collections you have each month, new ones?
DF: Yes. I don‟ t know about the number of accounts, I can— our average amount of collections turned over to us for collection a month is probably 45 to 50 thousand dollars a month.
HF: That‟ s a total amount to be collected.
DF: That‟ s a gross amount to be collected, yes.
HF: Is that— how would you break that down? Locally, within the state, outside of the state?
DF: I‟ d say, 80 percent locally and 20 percent out of our area. Probably most of that might still be in the state like from— you know, if an agency in Idaho Falls has an account they can‟ t collect, they‟ ll forward it to us, Pocatello, anywhere in the state. I really don‟ t have any records between, other than our area and out of the area. If you want a record of what percent was come collected, on a national average the amount of recovery is probably about 30 percent recovery of bad debts turned to a collection agency.
HF: About 30 percent is the national statistic?
DF: Yes, national. I think ours has been averaged about 40, the way we— our recovery is about 40 percent.
HF: Now that‟ s with and without suit?
DF: Yes, with suit, that‟ s the complete recovery.
HF: Complete recovery.
DF: All the way through from just plain letters on through suit and everything, yes.
HF: About 40 percent.
DF: Yeah. I mean you got— that might sound low, but you got to consider— you got to take bankruptcies out of that, and that‟ s very high anymore. Bankruptcies and skip people, you know, many of the accounts are turned over, the client doesn‟ t know where they‟ re at, and so this is listed as a new account. But yet, we never did know where he was, and they don‟ t know where he is so that‟ s got to come out of that percentage. If we took a percent of accounts that were here, and we knew where they were, our recovery rate would probably be, I would say, 80 percent maybe. I mean there‟ s just this many people that skip around the country.
HF: For your service, what does the Credit Bureau of Eastern Idaho, what policy do they have for fees?
DF: For collection fees?
HF: Uh huh, right.
DF: Our collection fees run from a third to 50 percent. If we
HF: Of the amount collected.
DF: Of the amount collected, yes. It‟ s all on amount collected. If we don‟ t collect, there‟ s no fee. We do have some clients that advance us court costs in case of suit, but that‟ s the normal fees. If we have to go to suit, then the fee goes up to 40 percent. Now if we get an account that maybe over two thousand dollars. We‟ re wiling to make arrangements for a little lesser fee; depends on the situation.
HF: Dean, you commented about bankruptcy as a tremendous, discouraging thing. Make some comments about bankruptcy. What effect does that have on the collectability of the item? The person takes out bankruptcy.
DF: Well the effect of it is completely zero, you know. I mean, of course, there‟ s two types of bankruptcies. There‟ s a chapter 13, where the debtor agrees to pay the court so much a month to pay off these accounts, but most of the time he doesn‟ t— it‟ s not set up to pay them in full. They may pay 20 percent of them or 30 or 40; it hardly ever pays the account in full. Now this is a chapter 13. Now a chapter seven is just a regular bankruptcy. On this the court is supposed to take all their assets. Of course they have exemptions, and this is very discouraging. A guy might have a— I mean for the creditor— the guy has a nice house and most of that is exempt; they have so many dollars exempt cash and bankruptcy recovery, anymore, in my opinion, is practically zero as far as straight bankruptcy. On the chapter 13s there‟ s a very large percent of these that never complete the chapter 13. I think the attorneys file these sometimes when they shouldn‟ t. I think they might as well take chapter seven and get it over with because you go along for
HF: False hope.
DF: False hope, yes, and a lot of paperwork for nothing. When any bankruptcy anymore we cancel back to the creditor and tell him to file a claim. I see no reason for us to take the commission out of a bankruptcy to file the paperwork when he might not only get 20 percent in the first place.
HF: Having a business of collections and credit ratings and so forth, have you found rewards and feelings that a real valuable service has been rendered the community?
DF: Yes, I‟ ve always had a good feeling that we‟ re doing a good service for the community, and we‟ ve built up many friends, I think, even in the debtor‟ s side of this thing or the poor credit risk. Also, on the other hand, we‟ ve had many people get upset with us, too, but you know they caused the problem themselves, and they sometimes try to blame somebody else for their misfortune. But all we do is keep track of the records, and if they‟ re wrong we certainly want to correct them, but it‟ s a service that‟ s needed for any community or any creditor that deals in credit. But I really have felt good about our service, and we‟ ve made a lot of friends, I feel, over the years.
HF: What segment of the con—