Spinoff cashes in on debt collection

A Rohnert Park company that makes millions of dollars protecting retailers from bad checks is expanding its operations to include debt collection -- a prime opportunity during a recession.

CrossCheck, which is the nation's third-largest check guarantor, has formed a separate company to track down delinquent accounts.

The spinoff, Optio Solutions, plans to take a slice of the $12-billion collection industry.

"We realized there is a huge opportunity not just on the checks side of the business, but more so on the accounts receivable end," said Chris Schumacher, president of Optio Solutions and chief operating officer for CrossCheck.

"There are a lot of companies struggling with their accounts receivable, and a lot of that has to do with the current economy," he added.

The number of checks written has declined 6.4 percent every year, on average, since 2003, according to the Federal Reserve. At the same time, the usage of check cards has increased about 18 percent. While CrossCheck has developed new services such as electronic check processing for its customers, it is looking to further expand by entering the debt collection business.

Optio Solutions is wholly owned by CrossCheck. It offers clients two levels of service and lets them manage their accounts online.

Its first tier of service tracks down overdue debts by mail and charges a flat fee ranging from $5.25 to $12.25 per account, depending on the volume of accounts.

The second, more-expensive tier adds a personal touch. Debt specialists will call overdue accounts. The cost for this service is based on a negotiated rate that includes a percentage of how much money is collected.

Optio Solutions also lets its clients set the tone of its collection efforts -- from diplomatic to intense.

That nuance is especially appreciated by clients such as Aaron Locks, president of the University of Sports fitness gym in Rohnert Park.

Sometimes gym members get behind on their payments, and Locks doesn't want a cranky collection agent to sour his relationship with them.

"We need to maintain good relationships with former members who owe us money, because they might want to become a member again in the future," Locks said.

The gym has about 4,000 members, and every month about 75 are late making payments.

"Most of those are taken care of with a simple e-mail or phone call from us," Locks said. "But about 12 a month are sent to Optio Solutions for further contact. It's the nature of the beast."

Optio Solutions is still in its growth stage after forming last February, and employs seven people at its offices in Rohnert Park, Schumacher said. By the end of 2008, the company hopes to employ a staff of 25.

Schumacher declined to provide revenues for Optio Solutions, but said CrossCheck employed 182 people in the North Bay and had revenues of $63.8 million in 2007. CrossCheck employs another 65 people in Dallas.

Optio Solutions is working to form partnerships with third-party vendors that sell packaged solutions such as banking services and debt collection to businesses. These vendors will be Optio Solutions' primary sales force, Schumacher said. The company also plans to leverage relationships that CrossCheck has with many of these vendors.

You can reach Staff Writer Nathan Halverson at 521-5494 or nathan.halverson@pressdemo

crat.com.