The debt collector trying to be the conscience of the industry

Friday, 12 May 2023

‘I want to be known as the person that got everybody to stop, and think about what they were doing, and just ask, ‘Is there a better way?’,’ says Mark Francis, general manager of Debt Managers.

Mark Francis knows he looks like the stereotype of debt collector a media executive might dream up for a TV series.

He jokes that if you saw him coming the opposite way on a dark night, you might think about crossing the street. He has the muscles. He has the close-cropped hair. He has the tattoos.

“If you’re 120kg and fully tattooed, people decide you’re a thug and a nasty debt collector,” he says.

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Mark Francis runs Debt Managers and argues that NZ needs to follow Australia and introduce a national code of conduct within the industry.

But Francis, general manager of debt buying company Debt Managers, is on a mission to change debt collection.

“I’m 57. I’ve been in the industry all my life. I’m trying to be the conscience of the industry, I’m trying to challenge the thinking more than anything,” he says. “I want to be known as the person that got everybody to stop, and think about what they were doing, and just ask, ‘Is there a better way?’”

Circulating in debt collection and financial mentor circles is a discussion document on Francis’s ideas for a code of conduct for the debt collection industry.

It’s an attempt to set minimum standards of decency and conduct for debt collectors. It contains some revolutionary ideas.

Debt collection is a vital part of the economic system. Debt collection companies exist to chase overdue debts for other companies on commission – or like Debt Managers, buy books of overdue debts from companies to chase in their own names.

But Francis says it’s an industry that’s yet to earn its social licence.

His code discussion document includes the UK concept of giving debtors being pursued by debt collectors the “breathing space” of five consecutive working days each month, during which period there will be no attempts to contact them.

It asks whether contact attempts by debt collectors to a debtor should be limited to a maximum of 12 a month. It also advocates the compulsory recording of all debt collection conversations.

Mark Francis may look intimidating but he says: ‘I’m not what I look like.’

Debt Managers is a member of the Financial Services Federation association of finance companies, which is drawing up its own a draft code, which has not been made public. Francis has seen it.

“I don’t think it goes far enough. I think it’s a document that allows current behaviour,” he says. “I just think we can do better.”

Francis cut an unusual figure in debt collection for his willingness to meet and talk ethics, debtor rehabilitation, and debt write-offs with financial mentors from the country’s household budget services.

Last month, Francis stood before the heads of budget services in Auckland to implore them to make use of a $1 million debt write-off offer from Debt Managers.

Debt Managers buys overdue customer debt from the likes of big-name power companies, banks and telecos, paying an undisclosed cents-in-the-dollar price. It makes a profit if it can collect more than it pays, allowing for overheads and taxes.

But Debt Managers has offered to write-off debts for people who work with financial mentors for at least a year. It’s budgeted for writing off $1m.

“The idea was that people would be smashing the doors down to speak to mentors,” Francis says.

Not much smashing down of doors has been happening. “I get more requests for write-offs from my team.”

Debt Managers has a staff of 80, and when they come across what they think is a genuine case for a write-off on humanitarian grounds, they come to Francis and as for it to be written off.

“I don’t want to collect money from someone that’s really in bad shape. Bad shape might be mentally ill, physically ill, financial hardship, economic abuse,” he says.

He gives a recent example of a debt being written off owed by a woman in Whangārei.

“The woman had just been blinded by the boyfriend in a domestic abuse case, and was struggling to pay her bills. We didn’t ask for validation. We just wrote the debt off,” Francis says.

Francis is keen people don’t misunderstand who he is, or what he is trying to do.

Our economic system requires people pay their debts, but that does not preclude debt collection being “fair” to debtors.

He thinks debt collection companies should also be in the business of debtor rehabilitation. Most are good people in a mess. They deserve a chance to clear their slate, and rebuild their credit standing.

‘We try to cause no collateral damage in our collections,” says Francis.

One financial mentor who has a copy of Francis’s code, and who recently went out with one of Francis’ debt collectors to see how they work, described Francis as a man on a genuine mission following a “Road to Damascus” moment.

Francis’s moment came on TV’s Fair Go in 2015, but it might not have been so pivotal were it not for Francis’ background.

He grew up in a single-parent household in Auckland’s Glen Innes.

There was precious little money in the Francis household. Raised by his mother, Francis even recalls debt collectors carrying off whiteware from his home.

“I know what it’s like as a kid to have scabies, and no dinner, and the repo man taking the fridge. I know what that’s like,” Francis says. “Nothing was expected of you, and you didn’t expect anything of yourself either.”

He went to university at age 26 after spending some time overseas. He studied politics and theology, but jokes: “I found I was better at doing bench press than studying”.

Mark Francis is on a mission to change debt collection.

His career as a debt collector began when he joined Baycorp in 1995.

“I found I was very good at talking to people about their debts, and getting them to pay their debts back,” he says.

He went hard at his new career, a bit too hard.

“When you are young and driven to succeed, you forget some of your values, like wellness and work-life balance,” he says. “It is the challenge of a young man. You let your vitality carry you away, and get your balance wrong.”

He burnt out, left the industry and sold used cars for a while on “The Strip” in Manurewa.

In 2018, Intercoll was warned for likely breaching the Fair Trading Act by misrepresenting a debtor’s legal rights.

Later, he worked with his wife in the beauty therapy industry, but then returned to debt collection with a company called District Collections in Auckland, the company that would become first Intercoll, and then Debt Managers.

“After a year, the owner said, ‘You’re the boss now. I want to do more fishing’, and walked out,” Francis says.

In 2015, a year into running the place, Francis found himself on Fair Go, prompted by a complaint from a community law centre in Whangārei which was incensed at the company’s high-pressure tactics towards a debtor. Francis went to meet the mentor.

“That was the defining moment, when they ripped me. They had been waiting all their lives to get a debt collector in the office to tell them what they thought of them.”

They told him about how scary debt collection could be for people, and how, if a debt collector demanded too much each week from a person, they went without something they needed. He began thinking about those people more deeply, and about debt collection having a more respectful, more mana-supporting relationship with debtors.

“I think if people are without goods, and the trappings of wealth, all they have left is their mana,” he says.

Mark Francis says it’s a necessary precaution for debt collectors to wear stab-proof vests.

Perhaps it should have been obvious to the boy from GI, but Francis says: “I was oblivious to that collateral damage. I said ‘can you help me change?’”

It wasn’t the end of Intercoll’s bad publicity. In 2018, Intercoll got a public warning from the Commerce Commission, after a complaint in 2017.

In 2019, Intercoll was name-checked, and not in flattering terms, in a Salvation Army report on the need to regulate debt collectors.

One finance mentor was quoted: “Intercoll is the most aggressive collection agency I have come across.”

However, the mentor remarked on how Intercoll was claiming to have changed.

“Its homepage used to have a black background and bragged about Intercoll's collection staff being the toughest in the business,” the mentor said. “Now their homepage says that ‘Intercoll Limited is dedicated to leading the NZ debt collection industry in socially responsible debt recovery.”

In 2021, the company was covered, though not named, in another report by Christians Against Poverty which was critical that its debt collectors dressed in Swat-style clothing, secret-service style earpieces, and flak jackets.

Francis says stab-proof vests are a necessary precaution.

“We were one of the first. But sadly, it’s become the norm,” he says. “I have a duty of care with my guys, who are out on there on their own.”

After his dressing down in the community law centre, Francis faced a big question.

If his company was going to adopt a new style of debt collection with an emphasis on empathy and fairness, could it be commercially successful?

In 2021, investment bankers Charles Whiting and Jacub Vermunt bought a majority stake in Intercoll, which he feels was an endorsement in the direction he was taking the company, which was rechristened as Debt Managers.

Francis remains a minority shareholder.

“I have carte blanche to run with this social piece,” he says, on the proviso the company delivers a return. “We try to cause no collateral damage in our collections.”

Indeed, not causing collateral damage is now an important part of the business model.

He is contractually obliged in the sale and purchase contracts not to embarrass the companies he buys debt from. They wouldn’t sell their overdue debts to Debt Managers, if they thought it might harm their brands.

Francis hopes his push for a national debt collection code could lead to real change, including from the government, which is a big debt collector itself.

“Let’s all get around the table; MSD, IR, myself, all of the big debt collection companies, and hash something out,” he says.

He’d like to see debt collectors licenced, like other financial professionals have to be.

And he hopes that one day, people will see him as having left a legacy: “He’s the guy that brought breathing space out from the UK. He’s the guy who said all conversations should be recorded to protect people.”