He plays against the bill-collector stereotype, but if you want to avoid him, his advice is simple: Stay out of debt.
By JEFF HARRINGTON
Published May 2, 2004
[Times photo: Joseph Garnett Jr.]
Bill collector Bill Horwitz, here with one of his dogs in front of his home in Odessa, has been in the business for more than 30 years.
"Capt. Wild Bill" Horwitz navigates murky territory where people live in fear and predator sightings are rampant.
Yes, Capt. Bill is licensed to pilot ferries and 100-ton cruise boats. Sure, he boasts owning a vast nautical collection of seven boats, including a 16,000-pound Ketch, a 26-foot yawl and his personal favorite, an 11-foot pram.
But that's not the business we're talking about.
Horwitz made his mark and his fortune as owner of Audit Systems Inc., a bill collection agency whose call center-like office cubicles are spread across the upper floor of the International Diamond Center building on Ulmerton Road in Clearwater.
"No one likes bill collectors. We're all bad guys," Horwitz deadpans. "We beat on little girls, but we wait until Christmas Eve, usually."
The self-deprecating sense of humor comes in handy these days. Horwitz and his brethren are feeling the heat as state regulators push for harsher penalties and more enforcement powers against those bill collectors who use intimidating tactics such as harassing phone calls at all hours, abusive language and threats of incarceration and physical harm.
Proposed legislation would allow state regulators to inspect collection agency records, serve subpoenas, investigate consumer complaints and issue fines of up to $1,000 per violation. Florida Chief Financial Officer Tom Gallagher triggered the legislation after his office received more than 800 complaints from debtors. Almost half dealt with alleged harassment.
Many of the complaints focused on companies like Capital Acquisitions & Management Co. (or CAMCO), of Rockford, Ill., which buy old debt that companies have written off. There is no legal obligation to pay, but if consumers make even minimal payments on the expired debt, the entire debt may be reactivated.
One consumer from Edgewater complained that a debt collector had posed as a state investigator and threatened to have the sheriff's office escort her to jail. Another said a collector threatened to arrest her son, who lives in another state, unless she wired a cash payment immediately.
Robert Becker, a retired mechanical engineer living in Homosassa, said CAMCO repeatedly called him and his wife, Eleanor, last year trying to collect $5,000 even though the debt had been cleared through a bankruptcy filing eight years earlier.
"It was very frustrating when we knew our situation (that the debt was cleared) and we couldn't shut them off," said Becker, 73.
"These people are just parasites. They'll find some kind of ancient history and they'll call people. They'll just prey on people."
Tampa attorney Jonathan Alpert, who is suing CAMCO on behalf of other debtors, argues that the company should more clearly disclose that a person with an expired debt has no legal obligation to pay.
CAMCO defends its policies and procedures and says its 450 collectors are trained on the law.
"I would welcome (Florida regulators) to come to our company and look at our operations," CAMCO compliance officer Jeff Garrington said.
Historically, complaints from Floridians such as the Beckers used to be funneled to the consumer services division within the state agriculture department. After a shakeup of Cabinet offices about a year ago, those complaints now wind up on the desk of Don Saxon, director of Florida's Office of Financial Regulation, who reports to chief financial officer Gallagher.
And it is there the complaints stop.
"There's nothing we can do," said Saxon, who has pushed for the new legislation. "We don't have any authority to deny applications. We don't have any authority to investigate complaints."
As of the deadline for this section Friday night, with the legislative session moving closer to a close, the debt collections measure was still pending.
From the perspective of a bill collector like Capt. Bill Horwitz, state regulators are misguided - well-intentioned but misguided.
Horwitz said his company doesn't buy older, written-off debt like CAMCO does and then try to collect. And state regulators say his company is not one of the main targets of the antiharassment law. In fact, Audit Systems' track record shows just three complaints since 1997, according to state records.
Horwitz says he's all for going against the harassing bill collectors who give his industry a bad name. But he insists most of the reforms the state is seeking are already on the books via federal law.
Under the Fair Debt Collection Practices Act, collectors are forbidden from using "unfair or unconscionable means" to try to collect debts. Harassment, abuse and misleading representations can all lead to hefty federal fines.
(Justin Glover, a spokesman for Gallagher's office, said the Federal Trade Commission has limited manpower and can investigate only "the most egregious cases. Not to be critical of the folks with the FTC, we just want to help.")
Instead, Horwitz advocates other crackdowns, such as making some abusive tactics criminal offenses instead of just levying civil fines.
Top on his to-do list is passing a Florida law to level the ground with bill collectors from other states. A "reciprocity law" would mean a bill collector from Delaware would have to set up an established operation in Florida to collect a debt here because that's what Delaware law requires. It means a Massachusetts collector would have to pay $5,000 to start collecting in Florida because that's what Massachusetts requires.
Right now in Florida, bill collectors "give them 350 bucks and a smile," Horwitz said, "and I don't care if you're Attila the Hun, you're licensed."
It's a hard enough business to survive in, he said, without giving out-of-state collectors an unfair advantage.
Many companies have grown more sophisticated about collecting debt in-house and turn to outfits like Audit Systems only after giving up on the hardest cases. And even if lawsuits aren't routinely filed alleging harassment, there's an omnipresent threat of litigation ("wolf letters" from attorneys, as they're known).
Horwitz estimates his cost of operations has increased tenfold due to higher labor costs and computers, while profit margins are 80 percent less than a few decades ago.
His latest beef: More companies in financial services are outsourcing their debt collections to cheap-labor markets such as India, where telephone operators are paid less than $2 an hour.
"The debt collection business is not for people who like a soft life," Horwitz said. "It's a tough business, but we're honest. We're legitimate."
Hummer and overalls
At 59, Horwitz considers himself semiretired after building Audit Systems into a $20-million-a-year operation.
He's proud of his expanding enterprise, which plans to be near 100 employees after its current hiring phase. But he's also first to admit this was not the direction he saw his life headed four decades ago.
At the University of Delaware, where he said he became friends with future U.S. Sen. Joseph Biden, Horwitz majored in agriculture.
He was in the Coast Guard during the Vietnam War, playing drums in a rock band while simultaneously honing his boating skills. For years, he lived on a 50-foot boat.
He remains the antithetical image of a bill collector always in pursuit of a bad debt. He spends hours planting beloved native gingers and Japanese plums on his Odessa farm. Or nurturing a rose garden he planted as a wedding gift for his wife, Katie, whom he married this spring.
Wearing soil-stained, brown overalls and sunglasses, his deep-tanned face shaded by an oversize, leather hat, he looks every bit the farmer.
Hints of his eclectic, perhaps even eccentric, nature are everywhere.
At Audit Systems' headquarters, the door to his office is marked:
Wm. H. HorwitzCEO/PresidentResident Genius
He passes out a business card showing "Capt. Wild Bill" standing in front of his Hummer with a cockatoo perched on his shoulder. The caption underneath jokes: "Adventuror/Exploror/Sailer Sailing Vessel: Mandy Rose III" (named after his daughter).
Early in his career, he set a goal of talking to three debtors an hour, about 25 a day. He circled names he thought would pay, and was consistently surprised that his guesses were wrong. Broken promises were common while some debtors who hung up the phone wound up sending money. Many times, he said, debtors are honest people who just forgot about an old bill or thought it had gone away. A reminder call is enough to nudge them.
"Our job is to keep honest people honest," he says.
Over the years, he has seen the industry become more sanitized - and less profitable.
In the old days, he recalled, bill collectors would visit people's homes. Midnight repossessions were not uncommon. Neither were the proverbial knee-busting collectors who would personally intimidate debtors into paying up.
Today, most bill collectors stay in the office and on the phone. They're supposed to follow scripts dictated by the Fair Debt Collection Practices Act (or FDCPA as it's commonly called). They're not supposed to even identify themselves to a third party or contact a debtor by postcard. If mail is sent, there should be no indication on the return address that the company is a debt collection agency to protect the privacy of debtors.
Even the term "bill collectors" is passe. Audit Systems markets itself as a "third-party, accounts receivable management company." Workers staffing the phones are not bill collectors; they are customer service representatives.
The economics have changed as well.
Years ago, Horwitz said, recovering from 17 to 24 percent of a company's outstanding debt was considered a good yield, and a bill collector would keep up to 50 cents on each dollar collected.
Now, bill collectors may recover 2 to 5 percent of a contract. "I've got some clients where I'm getting 2 percent recovery on the stuff they're giving me and I'm their best collector, if that doesn't scare you," Horwitz said.
The bill collector's share of the take has shrunk to closer to 10 cents on the dollar for large accounts, he said.
Peace of mind
That hasn't stopped Horwitz from making a decent living from his life's work.
Horwitz clearly enjoys collecting things in addition to other people's debts. Consider the hodgepodge of items dispersed throughout his 10-acre Odessa farm dubbed Shady Shore Farm.
Stroll up the main entryway past the '56 Mercedes 190SL, the 1923 tractor, the replica of a 1929 Bugatti SP, the multicolored Grateful Dead van and the bright yellow Hummer. Pass the oversize stable on the left, which has a grand piano and part of a miniature ship collection on the second floor. Continue by the merry-go-round horses positioned like over-sized planters in the garden. Circle by the 1926 Florida cracker house, expanded at least 10 times to fit an ever-expanding collection of miniature autos, miniature boats, guns and fans. Walk toward the dock by crystal-clear Lake Glass.
"I'm like a little kid. I've got all my toys," Horwitz says as Snoopy the dachshund, one of his two dogs, rummages in the garden next to him.
Much of the stuff came from yard sales and flea markets.
Horwitz won't discuss his net worth or the value of his disparate collection, yet he's proud of the freedom that his money affords.
"I can afford to go to the shopping mall right now and buy everything I want A to Z, including the cars on display," he said, "but I see what that's going to be worth at a garage sale where it's 2 cents on a dollar what you pay at the store."
His passion may be buying things but he's equally passionate about only buying what one can afford.
His parents were products of the Great Depression. His mother, now 95, never got over it.
Resting momentarily in a rocking chair, he preaches about staying out of debt.
"I just make sure I'm making more than I'm spending. Everything I say is pretty simplistic."
A longtime eyewitness to the perils of overextended credit, he refuses to buy anything on credit himself. He took out a partial mortgage on his Odessa spread only after his accountant urged him to do it for tax purposes.
He has seen how debt overpowers people, taking away their health, their dignity, their relationships. Poisoning marriages.
Statistics back up his fears that America's debt load is only getting worse. According to Cardweb.com, the average amount of credit card debt among U.S. households with at least one credit card was $9,205 in 2003, up from $3,646 in 1993. Total nonmortgage debt is about $23,000 per household.
Horwitz said he wishes more people would follow the same route to debt-free, self-sufficiency that he has, even if it would result in less business for his agency.
To him, positive cash flow represents peace of mind.
"It's a real peace, honest-to-goodness," he said. "I wish more people could experience it."
More than 6,500 collection agencies and 1,600 credit reporting agencies serviced about $135-billion in delinquent consumer debt that was placed for collection in 2000. That's double the $73-billion placed for collection in 1990.
The debt collection market brings in about $13-billion-a-year in revenues for U.S. companies.
Employment in the collection industry is expected to rise up to 35 percent between 2000 and 2010.
A typical collector attempts 20 phone calls an hour, reaching six debtors and eliciting at least two promises to pay.
The average collection agency employed 12 full-time collectors and one part-time collector in 2002.
In 2002, the average base salary for a collector was $22,487 with an average commission rate of 12 percent, bringing total pay to $31,812.
Female collectors outnumber male collectors by a ratio of 3-2.
- Sources: ACA International (The Association of Credit and Collection Professionals); Bureau of Labor Statistics; Federal Trade Commission; The Kaulkin Report.