Announcing Investment in DCM Services
December 04, 2007
Minneapolis, Minnesota – Norwest Equity Partners (“NEP”), an equity investor focused on investments in growing and profitable middle market companies, today announced that it has made a significant investment in Deceased Credit Management, LLC, the holding company of DCM Services, LLC (“DCM Services” or the “Company). DCM Services is a leading national provider of deceased account collection solutions for the financial services, telecommunications, utilities and health care industries. NEP invested along with existing management shareholders in the transaction; financial terms were undisclosed.
DCM Services has targeted the large and growing deceased account collection business with its innovative estate-focused approach to deceased account collections. According to The Kaulkin Report – 7th Edition, contingent-fee collections on delinquent and charged-off receivables, which includes deceased accounts, represents a $10 billion revenue opportunity in 2007.
Since its founding, DCM Services has recognized that unlike traditional delinquent and charged-off collections, credit grantors face a complex array of challenges unique to deceased account collections, including increased brand risk, limited knowledge of the probate process, the need to balance liquidity requirements with intricate estate processes, and a finite collections timeframe with no opportunity for secondary or tertiary collection strategies.
Founders James Balogh and Gary Becker set out to form a company whose approach to deceased collections would serve to protect client brands and maximize their recoveries. DCM Services’ innovative approach to deceased collections starts with a focus on finding probate estates. Despite the difficulties inherent in the probate process, including lack of a uniform court system and dozens of different procedures to source data, DCM Services makes finding estates a priority for three critical reasons: 1) recoveries through the estate process are significantly greater than through voluntary collections and can represent a substantial share of total collections; 2) maximizing contact with estate representatives while limiting contact with survivors reduces a client’s brand risk; and 3) the approach honors the intentions of the decedent, who while alive, set aside funds in an estate to pay creditors after his or her death.
DCM Services’ ability to find estates and generate recoveries is unrivalled in the collection industry, in part, due to the power of its proprietary Probate Finder® system. The Probate Finder® system is the collection industry’s only source of systematically-maintained probate information for all 50 states. The system includes a highly scalable database of nearly 1.8 million open, active estates records organized in a manner so that retrieval is fast and efficient.
DCM Services couples the power of the Probate Finder® system with its innovative empathic approach to collections. In addition to a rigorous training curriculum on collection strategies and tactics, DCM Services’ account representatives study best practices in compassion and empathy throughout their careers. This approach ensures clients of both superior protection for their brands and maximum recoveries.
Timothy Kuehl, Partner at NEP and DCM Services board member, stated, “DCM Services is in a terrific position to continue achieving significant market penetration. With the U.S. population aging at a greater rate than the population as a whole is growing, the credit characteristics of the decedent population are more stable and reliable. DCM Services’ unique business model and focus on technology and proprietary data collection processes enable it to locate estates in a cost-effective and timely manner.”
Steven Farsht, DCM Services’ President and Chief Operating Officer, stated, “DCM Services has established itself as an industry leader due to its innovative technology and business processes. I am confident that no company is more focused on the respectful treatment of survivors or more committed to achieving exceptionally high liquidity than is DCM Services.” Prior to his position at DCM Services, Farsht was a General Partner at NEP and helped lead the investment process for the firm’s investment in the Company.