When the Fast Bucks Corporation started offering payday advances in 1996 no one knew it would be the foundation of a global enterprise. Starting out, Fast Bucks faced the same challenges experienced by every payday advance provider. How do you maximize volume while keeping bad debt to a minimum? Fast Bucks President Charles Horton discovered the solution — Teletrack predictive modeling.

“Before we started using Teletrack, our bad debt was in the 40-50% range. Now it’s dropped to a consistent 10% or less. In fact, it’s even gone as low as 6%,” stated Horton in a recent interview. “Using Teletrack’s information in our stores has really helped us reduce our losses. We’re making a profit, opening new stores, doing business on-line in the United Kingdom and setting up master franchises on a worldwide scale.”

“Using Teletrack’s information in our stores has really helped us reduce our losses.”

Fast Bucks utilizes Teletrack in their application verification process in all of their stores. Teletrack’s unique, non-traditional consumer information is gathered from businesses across the country and provides Fast Bucks with critical consumer data that they cannot get from an application alone. Inquiring into the Teletrack database can inform store personnel if the applicant poses a high risk of becoming a charge-off, currently has any open advances, has previously charged-off from another payday advance company and whether or not the applicant is using a fraudulent Social Security number.

Horton understands that reviewing a consumer’s history before approving an advance plays a key role in preventing losses, and that is why he requires Fast Bucks store personnel to pull a Teletrack report as part of the application approval process. Whether the consumer is new or is returning for another advance, Teletrack data may help identify over-leveraged borrowers. An inquiry report will show any inquiries from other payday advance businesses from the current pay period. If multiple inquiries are listed, there is a good chance that the consumer may currently have advances out with other companies.

“Consumer verification begins on our own system and we have a set of internal criteria that must be met to allow the advance to proceed,” explains Horton. “From there we send the applicant’s information to Teletrack. Our computer system is integrated with Teletrack and the application can’t be processed without submitting an inquiry. Our employees just click the “Teletrack” button on their screen and in seconds we have a ‘yes’ or ‘no’ on whether or not the advance should be approved. It couldn’t be easier for them.”

Horton uses Teletrack’s scoring and decisioning logic to help ensure that consistent lending decisions are made in each store location and that those approvals follow Fast Buck’s business rules. This helps ensure that decisions are based on impartial, statistical information and not on the personal judgment of each store manager. “Instead of having thirty managers making random lending decisions on their own, Teletrack is helping us make sure that the rules we set are followed throughout the company. It’s an automated, efficient, and consistent way to make lending decisions in all of our stores. If you allow managers to make decisions all by themselves, you will discover very quickly that managers will make wildly different decisions based on their own personal biases or cultural beliefs. By using Teletrack, we can help ensure that decisions are based on sound statistical data, predictive modeling and not the opinions of an individual manager,” states Horton.

By incorporating Teletrack’s credit scoring feature into their application approval process, Fast Bucks corporate headquarters can closely monitor individual store performance and adjust each store’s approval parameters accordingly.

“We like the fact that Teletrack is flexible and we can set our risk parameters differently for different stores,” remarks Horton. “We know it’s possible to reach a 3% or even 0% level for bad debt across the board, but what we have found is that going that low tends to exclude too much good business. Instead we decide on a store-by-store basis where to set the cut-off level. Depending on the store’s performance and bad debt ratio, we can adjust the credit scoring. If a store has very little bad debt, then we’ll lower the credit scoring a little to allow more approvals. Likewise if a store has a higher ratio of bad debt we can raise the score. The ability to raise and lower score approval levels has really allowed us to better manage, control and predict what our bad debt is going to be.”

“I’m saving an average of about $1,000 per month in each store by using Teletrack’s services.”

“Using Teletrack has really helped us reduce our number of charge-offs. I monitor our system very closely and on an average basis we’re only declining 4-5 loans per month in each store. These are cases in which the applicant is clearly going to be bad debt. According to my calculations, I’m saving an average of about $1,000 per month in each store by using Teletrack’s services,” observes Horton.

In addition to using Teletrack for risk analysis and fraud detection during the pre-screening process, Fast Bucks also utilizes Teletrack’s skip-tracing service to assist them with the collections side of the business. Fast Bucks reports their charge-offs to Teletrack and when one of those consumers attempts to do business with any of Teletrack’s thousands of contributing businesses, current information is provided back to Fast Bucks. This information may assist in recovering money owed. “We think the skip-tracing side of Teletrack is excellent. Every time one of our bad debt consumers is declined somewhere else, that inconveniences them and it lets them know they need to pay us. We get new location information from Teletrack constantly and we use that to help us collect. If they don’t call us immediately, then we send the consumer a letter letting them know we’re aware that they have been declined elsewhere. We let the consumer know that they will pay us what they owe us, then they stand a good chance of being approved in the future,” comments Horton.

“Our satisfaction with the service is very high, and it has helped us substantially reduce our losses,” concludes Horton. “Teletrack is saving me a good $20,000-$30,000 each month in bad debt, and that definitely makes using the service worthwhile.”

Fast Bucks Holding Corporation was formed in 1996 by its current president, Charles Horton. Prior to entering the payday advance business, Horton was operating a check guarantee service that had a large float. In an effort to maximize his profit-making potential he decided to create Fast Bucks as a way to make the float generate revenue. Eight years later, there are 47 stores operating in many southwestern states.

Vice President and General Counsel, Stephen Solomon projects 75 stores and 100 franchise locations will be operational by the end of 2004. Excluding revenues from the franchises, Solomon states that the stores alone will elevate Fast Bucks Holding Corporation to a 20 million dollar company. The company is also in the process of establishing a worldwide market presence and has made the first step by offering loans in the United Kingdom via the Internet through their corporation, Fast Bucks UK Ltd.

According to Solomon, master franchises are already set up for India and Australia. They are attending franchise shows in Paris, France that are expected to draw interested parties from all across Europe. They are also in talks with China to set up master franchises.

“When a new product or service like this comes out of America, it typically takes 8-10 years to resonate with the rest of the world,” explains Horton. “I think that payday lending really made an impact here and now places like the U.K. are offering them and consumer awareness of the product is really starting to take hold. People living in the U.K. are making good money and there’s not much competition in the market yet. We think this will be the path for payday lending across the world. Everyone around the world needs short term money until payday. We think the product is really going to explode on a global scale and we plan on leading the way.”

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