ACFS promises to create 300 jobs in its new headquarters, but it's also bringing along some issues.
By KRIS HUNDLEY
Published February 28, 2004
ST. PETERSBURG - It looked like a perfect deal for St. Petersburg on Friday, as city officials welcomed a new employer that promises to provide 300 new, high-paying jobs by the end of the year in return for $2.85-million in public incentives.
The company, American Collegiate Financial Services, markets student loan consolidation services to help people manage their debt.
But ACFS has two executives who have had money troubles of their own. And the company is embroiled in a lawsuit in Pinellas County with its former landlord.
Roger Schaffer said he sublet space in his offices on Park Boulevard in Seminole to the company when it started about two years ago. He said ACFS then bought the building from its owner Dec. 15 and evicted him, ignoring valid leases. He said he is owed as much as $32,000 in rent by ACFS, the former tenant turned landlord. The case is pending.
"When they came to us, they were driving 10-year-old cars and wearing not so fancy clothes, and we took a chance with them," said Schaffer, who runs a communications business called Unique Connections. "Now they're driving brand-new cars and dressed spiffy. I don't wish them anything bad. I just wish they didn't make life so difficult on us.'
ACFS executives declined to comment on the lawsuit or on past individual troubles.
John Vis, ACFS' president, was the subject of three federal tax liens of up $60,000 between 1993 and 1997, court records show. He also has been the defendant in two civil cases, including a breach of contract lawsuit for more than $6,000 involving the Bank of America. Through a spokeswoman, Vis, 45, declined to comment.
Bruce Record, ACFS' co-founder and marketing director, filed for personal bankruptcy in 1998. Record, 61, also declined to comment through the ACFS spokeswoman.
Vis, Record, Richard Guillot and James Smith started ACFS after working at another loan consolidation business in Pinellas County. ACFS' marketing director, Nicole Knight, declined to identify the quartet's past employer, citing unspecific "legal issues."
Though the company's corporate biography describes the four founders as "top operation managers" at their previous employer, Tammy Thomas, who is now ACFS' director of human resources, said the men were all phone representatives.
"I sat right next to Rich Guillot," Thomas said of the founding executive now in charge of loan processing. "That's why he knows how to make sure our employees get the tools and education they need to do their jobs."
Since Thomas joined ACFS a year ago, the company has grown from 30 to 250 employees. Most of those positions are call-center jobs, making largely outbound calls to loan candidates. Only a high school degree is required. Thomas said starting pay is between $10 and $12 an hour, plus commission. With bonuses for each loan consolidation completed, employees can earn up to $50,000 a year, Thomas said.
Those numbers got the attention of the city of St. Petersburg when ACFS looked to expand from its offices in Seminole last year. The company said it was considering moving to Rome, N.Y., but chose to remain in Pinellas County because of the approval of $2.85-million in state and local incentives, given as tax credits. ACFS also will retain its Seminole office.
Ronald Barton, St. Petersburg's economic development director, emphasized that ACFS, which bought the TECO/People's Gas building on Ninth Avenue North near Interstate 275, received no upfront public money.
"The way the incentives are structured, they only get the benefits if they create the jobs," Barton said. "If you produce the jobs, you're getting back part of the economic impact you're creating."
Barton said the city routinely does credit checks on companies before considering them for the state tax incentive program. It does not usually do individual background checks.
"We're going to focus on the credibility of the corporate entity," he said. "Not the individuals."
Bill Murray, spokesman for USA Funds, a private non-profit in Indianapolis that is the largest guarantor of federal student loans, said it is not surprising that new consolidation marketers like ACFS are emerging since interest rates are at historic lows.
By consolidating student loans that are typically written for 10 years at floating interest rates, consumers may be able to lock in a longer term loan at a lower rate. But consolidation can be done only once and can include only federal student loans, not credit card debt.
Murray also said consolidators, which are federally regulated, cannot charge origination fees.
"Our recommendation is to go first to your current lenders and see what kind of consolidation deals they can offer you," he said. "And if you deal with a marketing organization, know who is actually going to own and service the loan and whether they are well-known entities with a long track record of good service. Because you could be stuck with that organization for up to 30 years."
Thomas, ACFS' human resource director, was unable to say how many loan consolidations her company has processed in the past two years. But she said her employees, who receive on-the-job training about the student loan program, generally are well-received when they call potential customers.
"They don't get a lot of resistance, and the key here is they're offering a fixed rate," she said. "And before the loan is funded, we get back to every customer to review all the numbers. We want it to be an informed process."
- Times researcher Cathy Wos contributed to this report. Kris Hundley can be reached at hundley@sptimes.com or 727 892-2996.
