In This Issue

Chairman’s Remarks

Why getting bad credit

will make life a tough

journey

OECS Grappling with

High Debt

The Documents You

Should Require Prior to

Advancing Credit

GCS Partner News

Bernard Fernandes CEO, A.V. Knowles & Co. Ltd.

This year, A.V. Knowles and Co. Ltd. celebrates 29 years as the lead-er in Credit and Debt Manage-ment in Trinidad and Tobago and throughout the

Caribbean. As we enter the New Year, we do so mindful of our past successes but also guided by our goals and vision for future growth and development.

We have always been regional innova-tors, pioneering upon inception the prin-ciple of ‘No Collection, No Charge’ in Trinidad and Tobago. Building upon our reputation as industry vanguards, this

year, we are set to launch the first phase of our new Credit and Debt Management System (CDMS), leading-edge financial service technology that will enable us to hold our own within the global market-place. CDMS directly facilitates our re-gional expansion, allowing us to link to databases across the Caribbean is-lands: another industry first.

Even as we turn our gaze to the global horizon, seeking out opportunities for innovation, inter-regional growth and development, this year, we must also remember to look inwards. While we seek to maintain our status as industry leaders, we must also strive to achieve ‘our personal best,’ finding both motiva-tion and pride in our abilities, our quality of service and our professionalism. Welcome to A.V. Knowles & Co. Ltd. 2014!

A Publication of the A.V. Knowles Group | Magazine Issue 001 March 2014

Vision Our Vision is to continuously expand the frontiers of our local & regional capability within our group for the full cycle of Credit Management Ser-vices.

Mission Our Mission is to provide clients with high quality service through commit-ted, motivated and results-oriented staff. We aim to foster close partner-ships with our local, regional and international clients in our quest to becoming the premier provider of Credit Management Services. We pledge to work with honesty and in-tegrity, while maintaining a positive presence in the environment in which we operate. We strive to capitalize on advances in technology in an attempt to maintain constant interaction with our clients.

Forging Ahead AV Knowles & Co. Ltd. looks to the future

Chairman’s Remarks

As we start this New Year, I extend warm

personal greetings and best wishes for

continued success to all our dedicated staff

and valued clients.

This first issue is dedicated to our Manage-

ment team at A.V. Knowles & Co. Ltd. and

to the hardworking Media committee whose

diligence made our Newsletter become a

reality.

It is heartwarming for me as Chairman to

see the introduction of so many cost-

effective systems & controls now in place

within our Company which augur well for

continued expansion and growth in our

range of credit management services.

I congratulate all concerned for their

strength and commitment to drive my origi-

nal vision, i.e. to stay out front and consist-

ently deliver best quality service to all our

valued clients in credit collections recover-

ies and risk management.

Despite all the challenges and adjustments

required in the last financial year, I am

grateful that we have still been able to

achieve significant growth and financial suc-

cess.

The Company and the Group are indeed

well-poised to take advantage of all the ex-

citing opportunities now open to us, both

locally and regionally, especially with contin-

ued support of staff and our many valued

clients.

Albert V. Knowles

Chairman, AV Knowles Group

About Us

Debt Collection Credit Reporting Legal Services Investigations A.V. Knowles & Co. Ltd. is the Car-

ibbean's largest Credit Manage-

ment Company for 3rd party Debt

Collection and Credit Risk Ser-

vices, including a substantial online

delinquency database which is

extensively used by all Local Lend-

ers and Creditors.

A.V. Knowles & Co. Ltd. pioneered

the concept of charging one flat

Commission rate, i.e. "No Collec-

tion, No Charge" for Debt Recover-

ies which includes legal action by

its Attorneys (where feasible & ap-

proved by client) at no extra

charge.

As the Caribbean's #1 DEBT COL-

LECTION & CREDIT REPORTING

Agency headquartered in Trinidad

and Tobago, we handle all Bad

Debt Collections on a contingency

basis ("No Collection, No Charge"),

and provide Free Listing and circu-

lation for members of all delinquen-

cies through the most widely used

Business Information & Credit Risk

Management Database in the area.

A.V. Knowles & Co. Ltd. is fully

owned and managed by our pro-

fessional Attorneys-at-Law with

over forty (40) years of experience.

With our Head Office in Trinidad,

plus a worldwide network of 70

partner offices in Global Credit So-

lutions, we have the coverage in-

ternationally to handle any Corpo-

rate Fraud Investigations, Back-

ground Checks and Brand Protec-

tion cases on your behalf.

The Management Team of

A.V. Knowles & Co. Ltd.

Mr. Albert V. Knowles

Chairman

Mr. Bernard Fernandes

Chief Executive Officer

Mrs. Nirmala Ramkhelawan-

Dhanrajh

Senior Attorney-at-Law

Mr. Jason Edwards

Group Finance Manager

Mr. Donn McQuilkin

Group IT Manager & General

Manager

Mrs. Sharon Yorke

Human Resource Manager

Mr. Keon Gonzales

International Business Manager

Ms. Carol Kitson

Sales & Marketing Manager

Learn to manage

your money. If

managing your

money is

something that

you're not

comfortable with

or knowledgeable

doing, then

consult a credit

counselor or

personal money

manager to learn

the basics.

Why Getting

Bad Credit

Will Make Life

a Tough Journey

By Bernard Fernandes

In order to understand how bad credit can make life a tough road, let me begin by telling you some basics about the meaning of credit.

The word "credit" comes from the Latin word, "credere", which means, "to trust". When we allow someone to buy something from us "on credit", it means that we trust them to pay us after a given period of time. When we also say that a person has "good credit", it's generally known that the per-son is trusted to pay for the goods and services subse-quent to the sale.

Our creditworthiness, or an-other way to say it, our trust-worthiness, can be gathered from many sources. One of the easiest ways that our per-sonal creditworthiness is cap-tured is from the use of credit cards. All the credit card com-panies such as American Ex-press, Visa, Master Card, and Discover, report the ongoing credit card history of their credit card holders to the ma-jor credit reporting companies on a monthly basis.

There are five key items that are monitored by the credit

card companies and subse-quently reported to the credit reporting bureaus.

the amount of the charg-

es that accumulate in a one month period;

the types of purchases

that are made;

the amount of payments

that are made towards charg-es;

the time it takes to make

those payments to completely settle all the charges; and the total period of the individual's credit history

In addition to the credit card companies, banks, finance companies, and utilities are also sources that report the above key elements to the credit reporting bureaus.

Continued on Page 4

Continued from Page 3

The major credit reporting bureaus are Experian, Equifax, and Transunion and every month they are receiving and stor-ing the information on hundreds of mil-lions, perhaps billions, of people throughout the world. Once they receive this information, it is processed through certain proprietary formulas that result in what is known as a "credit score".

In addition to producing their own credit scores, each credit reporting bureau also sends its credit information to the Fair Isaac Corporation, which produces its own credit score, called a FICO score The FICO Score is the most com-monly used credit score upon which decisions concerning an individual's creditworthiness are made.

FICO scores range from 300 to 850 and following below is the general range of how an individual's score is considered.

Less than 630: Poor credit

630-689: Fair credit

690-719: Good credit

720-850: Excellent credit

The above gives you a short synopsis of how creditworthiness and your credit score is established, and since we live in a credit society, depending upon how low your credit score becomes, your life's journey may also become much more difficult. Let me give you some examples.

1) Higher interest rates - Interest rates that you'll pay on purchasing a car, buy-ing a home, or any other material item will be financed to you at a higher inter-est rate. The reason is that individuals who are perceived to have poor credit are a higher risk, which translates into higher interest rates. Logically, the high-er the risk that a person is considered to have, the more difficult it would be for them to pay a higher rate. Unfortunately however, banks, lenders, and credit card companies apply a different logic in which a person with lower or poor credit is charged a higher rate to offset the possibility that they if they default during the course of a payment stream, part of the payments received will help to offset the payments that remain outstanding.

2) Employment - Some employers, with permission by the candidate, will obtain a candidate's credit report during the vetting process. Candidates with fair to poor credit may be considered a high risk for employment due to the fear that their credit issues may impact their abil-ity to properly perform their duties. Spe-cifically, candidates with credit issues who are applying for positions where access to a company's funds is possi-ble, may be completely denied employ-ment.

3) Marriage - Although most of us have a dreamy eyed version of what marriage is, the reality for its success depends upon its ability to be economically via-ble. This means that a married couple, especially with children, will want to have access to a sufficient level of ma-terial items to make their lives comforta-ble. However, paying higher interest rates or not being able to access credit to purchase necessities such as a car, could put a great deal of strain on the family and result in its breakup.

4) Insurance - Many auto, property and casualty, health, and life insurance com-panies will look at an individual's credit score as part of their underwriting pro-cess to determine insurance premiums. For example, a property and casualty insurance company will use credit scores as part of the underwriting pro-cess. If the insured has poor credit, this could be interpreted as not having the financial means to keep a home from falling into disrepair. This could result in a higher home insurance premium for the insured, which is again an added expense that can put stress on a family.

5) General Reputation - Because we are a credit society, having poor credit can sully one's reputation. Even if the reasons for poor credit are the result of circumstances outside of one's control, regretfully most people don't consider those extenuating circumstances when deciding to grant credit. The reality is that the red carpet rolls out for people with good credit.

No matter what stage of life you're at, whether your're a student, a business person, or a retiree, follow these day-to-day practices to establish and maintain good credit.

1. Always try to pay your bills on time. This is considered the golden rule for establishing and maintaing a good credit history. Try to set up as many payments through online banking. This will not only help you have the pay-ments be withdrawn regularly without possible lapses due to the mail, but it will also help you to stay organized as well.

2. If you can't make your payment in full, especially with credit cards, try to pay more than the minimum payment.

3. Know the amounts that you owe. Every month you should have a firm idea as to how much you need to pay for your rent or mortgage payment, car payments, food, and utilities.

4. As the personal financial guru Suze Orman has said on many occasions, "live below your means and within your needs". Do not spend beyond your per-sonal limit. Remember, Just because the credit limit on you credit card is high doesn’t mean you should use it.

5. Close or cancel any credit card you don't need. Honestly, having one credit card account will makes it easier to keep track of bills.

6. Keep yourself out of collections. Stay on top of bills and call your vendors or suppliers before they call you.Taking a very proactive approach will keep you out of third party collections and keep your credit history in tact.

7. Monitor your credit score and obtain a credit report every 4-6 months. Credit reporting companies are notorious for making errors and it's up to you to make sure that there are no errors on your credit report. If you find errors on your credit report, take the time to get them corrected.

Learn to manage your money. If manag-ing your money is something that you're not comfortable with or knowledgeable doing, then consult a credit counselor or personal money manager to learn the basics.

As having poor credit can make life's journey a tough one, establishing and maintaining good credit through prudent money management will tremendously provide you with many opportunities to enhance your life.

Why Getting Bad Credit Will Make Life a Tough Journey

Trinidad Business Guardian | Pub-

lished: Thursday 30th January 2014

Member states of the Organisation of

Eastern Caribbean States (OECS) are

still grappling with low economic

growth, persistent fiscal deficits and

rising debt levels, Governor of the

Eastern Caribbean Central Bank

(ECCB), Sir Dwight Venner, has said.

Delivering the 2013 Economic Review

of the sub-regional grouping on Tues-

day night, Sir Dwight said it was evi-

dent that 2013 had been “another chal-

lenging year for the Currency Union”

with high unemployment and poverty

rates and some fragility in the financial

sector. “Once again the structural char-

acteristics of our countries, namely,

small size, extreme openness and high

vulnerability to external shocks and

natural disasters have become more

evident.”

Sir Dwight aid that economic and fi-

nancial developments in the Eastern

Caribbean Currency Union (ECCU)

continue to be shaped by the global

economic environment which is still

uncertain, with growth for 2013 likely to

be lower than previously anticipated.

According to figures released here,

preliminary data indicate that economic

activity in the ECCU expanded at a

modest pace of 0.7 per cent in 2013,

building on the marginal growth of 0.2

per cent achieved in 2012, which re-

versed the negative growth trends ex-

perienced since 2009. The increase in

economic activity was primarily driven

by improved performances in agricul-

ture, construction and tourism.

The construction sector expanded by

2.9 per cent following a 4.3 per cent

decline in 2012, as public sector con-

struction gained momentum. In the

tourism industry, value added is esti-

mated to have increased by 0.4 per

cent due to improvements in major

source markets and more intense mar-

keting efforts. However, this rate was

lower than the 1.4 per cent growth

recorded in 2012.

The ECCB said the consolidated fiscal

position of the Central Government is

provisionally estimated to have deterio-

rated in 2013 as the growth in expendi-

ture outpaced revenue collections. An

overall deficit of approximately

EC$427.3 million or 2.8 per cent of

gross domestic product (GDP) was

recorded compared with one of

EC$367.3 million or 2.4 per cent GDP

in 2012. The bank said the deteriora-

tion in the overall deficit position re-

flected the increase in capital expendi-

ture while current expenditure de-

creased.

OECS Grappling with High Debt

Experts look at Caribbean Trinidad Business Guardian | Pub-

lished: Sunday 23 February 2014

The Latin American and Caribbean

Economic System (SELA) and the As-

sociation of Caribbean States (ACS)

will hold a Meeting of Experts on debt

burden in the Caribbean Region tomor-

row in Port-of-Spain.

Permanent Secretary of SELA, Ambas-

sador Roberto Guarnieri, underlined

that the meeting will analyse the debt

situation and policies for debt relief,

focusing on differentiated approaches

that respond to the particular character-

istics of Caribbean economies.

The importance of the issue of debt

burden or sustainability has been

stressed repeatedly in various regional

and global forums, including the Latin

American Council of SELA, with partic-

ular emphasis on the situation of low

and middle income countries in Latin

America and the Caribbean.

While the issue of debt has been mar-

ginalised at the regional level, mostly

as a result of the positive impact of the

most favourable external economic

conditions and the greater macroeco-

nomic discipline attained by the majori-

ty of countries since the 1990s and the

beginning of the millennium, debt bur-

den persists as one of the main prob-

lems being faced by the economies of

the Caribbean subregion.

Some Caribbean economies report a

debt/GDP ratio of more than 60 per

cent, revealing an almost unchanged

fiscal vulnerability of this burden in

terms of economic and social develop-

ment for this group of countries, since

debt burden has a major negative im-

pact on economic growth. Although

debt can be used as a tool to improve

macroeconomic performance and pro-

mote welfare, excessive debt accumu-

lation can lead to a fiscally-

unsustainable situation, with severe

negative effects on macroeconomic

stability and economic growth.

In addition, the per capita level has

deprived most Caribbean countries of

preferential solutions for debt relief, in

particular the Heavily Indebted Poor

Countries (HIPC) Initiative and the Mul-

tilateral Debt Relief Initiative. The Meet-

ing of Experts is intended to exchange

experiences among the countries in the

subregion as regards the subject of

debt relief and disseminate information

about this reality among countries and

integration of organisations in Latin

America and the Caribbean.

Continued on Page 6

By Bernard Fernandes

In very broad terms, the kinds of support-ing documentation that supports advanc-ing credit to a new customer depends upon the amount of credit being request-ed and the amount of credit you are will-ing to advance. Following below is a gen-eral list of the documentation that should and/or may be required to support ad-vancing credit.

1) Credit Application - The information requested on a credit application can be very simple or very detailed, as it all de-pends upon the nature of your business and the amount of credit that you intend to advance. If the amount of credit being advanced is quite small then perhaps the only items you'll need is the name of the individual in charge and the company's contact information.

For example, hand tools are one product with a low unit sales amount that comes to mind since each tool may be between $10 - $50. Some companies in this in-dustry will go ahead and ship out hand tools up to $100 on credit knowing full well that between 1-2% of all new and/or

existing customers may end up not pay-ing. In this case, the minimum infor-mation may only be the telephone num-ber, shipping and mailing addresses. Since the dollar volume is relatively small, it's felt that it would not be worth the time, effort and cost to obtain and review a credit report and any other supporting credit information.

Conversely, if the amount of credit you intend to advance is quite large, say at least 1% of your total sales, then the information on the credit application has to be very detailed, which would include the names of the executive manage-ment, trade and bank references, sales and profit history, personal information on the owners, and even a personal guarantee may be required.

Please note that the information on a credit application where the amount of credit being requested is large, still needs to be verified since the information provided by the potential customer may be inflated or exaggerated.

Continued on Page 7

GCS News Global Credit Solutions (GCS)

founded in Australia in the 1970’s,

GCS Group today is a world lead-

ing Credit, Collection and Risk

Management enterprise. With a

team of more than 3,000 trained

specialists located in over 90

countries, GCS has the expertise

and international resources to pro-

tect its clients from financial and

reputational risk. A.V. Knowles &

Co. Ltd. is proud to be a long-

standing member of this well-

established group. Each year GCS

holds a global conference where

partners from its constituent meet

to discuss industry trends, share

ideas, resources and network.

Our Chairman and Owner served

as Regional Director and was hon-

ored at last year's conference in

Chicago with a Lifetime Achieve-

ment Award.

This year A.V. Knowles & Co. Ltd.

looks forward to continuing our

relationship with GCS with plans to

attend this year's conference slat-

ed for Dubai in October.

The Documents You Should Require Prior to Advancing

Credit

Continued from Page 5

Another objective of this meeting

is to identify debt relief policies,

particularly measures to promote

investment and to spur economic

growth.

The conclusions and recommen-

dations are expected to be of ben-

efit for affected countries and of

strategic importance for the other

Member States.

After the Meeting of Experts, the

final report will be sent to the

member states of SELA and rele-

vant regional bodies, including the

Association of Caribbean States.

It is only the poor

who pay cash, and

that not from virtue,

but because they are

refused credit.

- Anatole France

Continued from Page 6

2) Trade Reference - Understanding who your potential customer is presently doing business with, at a credit level and with credit terms that are being requested of your company, is imperative. If your po-tential customer is requesting a $20,000 credit limit from your company and only able to show a $2,000 credit limit with another supplier, that is not too reassur-ing. But even if the credit amount and payment history with another supplier appears to be in line with what is being requested to your company, it's still prop-er due diligence to confirm if there is less than an arm's length relationship between your potential customer and their suppli-er. A supplier who is the brother-in-law of the potential customer and who vouches for a $20,000 credit limit in name only, is very misleading.

3) Bank Reference - If you can obtain a bank reference that contains average daily balances, lines of credit, overdrafts, and high and low credit facilities availa-ble, this would be an excellent indication of your potential customer's cash flow status. Again, if the credit amount being advanced is quite low relative to your monthly sales, then you would not require this document.

Unfortunately, banks are not always will-ing to give a third party that kind of de-tailed information. Sometimes if your company and the potential customer have the same bank then that information may be forthcoming.

4) Credit Report - There are a number of credit reports that can be obtained over a wide range of costs, which can be a sim-ple financial summary or provide incredi-bly detailed information and data. Here too, one has to balance the information they need to evaluate the amount of cred-it being advanced against the cost of the supporting information being obtained and analyzed.

One of the major ideas to keep in mind when using any credit report is under-standing to what extent the credit infor-mation has been verified. Many compa-nies that issue credit reports have a dis-claimer at the bottom of the report which states that they do not accept any re-sponsibility for any credit decisions made using their report. This kind of disclaimer should be a warning sign that the infor-

mation, especially when it comes to ad-vancing a large credit amount, is not as reliable as you require.

Some credit insurance carriers issue credit reports indicating for how much they would cover the potential customer in the event of a payment default or bank-ruptcy. This coverage amount can also be used as a credit limit guideline and is much more reliable since the credit insur-ance carrier is basically saying that they would be prepared to pay out to your company up to the amount of coverage.

Credit reports issued by Industry Credit Groups are also much more reliable since the payment and default information comes from other suppliers on a regularly basis that have had a direct business relationship.

5) Financial Statements - Obtaining a customer's financial statements are often required when you are selling very ex-pensive products or equipment and un-derstanding the customer's credit worthi-ness and long term viability is imperative. However, most financial statements are not audited but assuming that they have been created properly, directly viewing and analyzing (assuming you have the time) the results can give you one of the best snapshots of a company's financial situation.

6) Standby Letter of Credit - When a review of other documents such as a credit report or financial statements indi-cate that the creditworthiness of a poten-tial customer is in a weak position, a Standby Letter of Credit can give you the assurance needed to advance credit. In short, a Standby Letter of Credit is is-sued by a bank on behalf of its customer and is used as a "payment of last resort", should the customer fail to fulfill a con-tractual commitment. Standby letters of credit are created as a sign of good faith in business transactions and are proof of a buyer's credit quality and repayment abilities with his bank.

Every company's credit situation is unique and not only knowing what docu-ments are necessary to advance a credit limit but who has the responsibility to authorize credit within a given range should be set up in a guideline.

The Documents You Should Require Prior to Advancing Credit

Contact Us

Give us a call for more

information about our

services

A.V. Knowles & Co. Ltd.

50 Woodford Street,

Newtown, POS, Trinidad

W.I.

T: 868.628.2062/2063

F: 868.622.8576

E: info@avknowles.com

W: www.avknowles.com

GCS Chicago Conference 2013 | Photo credit: facebook.com/GlobalCreditSolutions

GCS Chicago Conference 2013

The GCS Global Conference held on October 14th – 16th 2013 was attended by Mr. Albert Knowles and Mr. Bernard Fernandes. In the photo below, Mr. Albert Knowles is seen in

discussion with Mr. Lou Figueroa, the President of Credit Decisions International.

Editorial Team

February 2014

Congratulations In a Press Release issued on February 6, 2014,

the International Association of Commercial Col-

lectors Inc. (IACC), the largest international trade

association for commercial debt collectors, was

pleased to announce that four (4) employees of

A.V. Knowles & Co. Ltd. earned the IACC Certified

Collector designation.

They are:

Ms. Vidia Suphal

Ms. Linzi Balroop

Ms. Nekeisha Sandy

Ms. Cindy Sooknanan

IACC Certified Commercial Collectors must pass a

rigorous exam that consists of 60 industry specific

questions relevant to commercial collections and

focuses on the duties and responsibilities of com-

mercial collectors. The exam was designed and

written by some of the top commercial collectors in

the field.

Congratulations to our IACC Certified Collectors!

Congratulations to Ms. Suryya Salick, Accounts

Assistant at A.V. Knowles & Co. Ltd., who recently

passed ACCA Level 2 Examinations. Ms. Salick is

scheduled to write her final Level 2 Examination in

June 2014 and we wish her the best of luck!

New Appointment A.V. Knowles & Co. Ltd. recently wel-

comed Mr. Norvick Mohon as a Consult-

ant in the areas of Credit and Collections.

Mr. Mohon comes with a wealth of experi-

ence, having spent thirty-eight years in the

Banking Sector. He served as Senior Cor-

porate Manager at Republic Bank Limited

for 36 years and as a Consultant in Credit

and Securities Management at the Bank

of St. Lucia for 2 years.

Albert V. Knowles

Bernard Fernandes

Amrica Seepersad

Carol Kitson