When Chief Operating Officer, Brian Scoggins, and his partners founded Payday USA, LLC, in 1999, they all knew the company had tremendous growth potential. Principle founder Joe S. Moore, had laid the foundation for what was to become a rapidly expanding network of successful payday advance stores across the southeast. Moore was already using Teletrack in his Tennessee storefront when Scoggins and his partners came on board.

Four years and thirty-two stores later, Scoggins is a firm believer in Teletrack. “I absolutely couldn’t imagine running our business without Teletrack. Our charge-offs and our bad debt would be significantly higher if we didn’t use the service,” stated Scoggins in a recent interview.

“Growth is the goal,” continues Scoggins. “It definitely presents challenges in terms of operations, and Teletrack is helping us meet them. Because our managers are using Teletrack to help them make good decisions, our charge-offs are low and profits are good. So we feel comfortable allowing our managers to supervise their stores on their own. It means that the corporate office doesn’t have to micro-manage each location.”

Having to allocate fewer corporate resources to existing stores frees Scoggins to focus on expansion. He knows that Teletrack’s multi-faceted services are providing each of his managers with the tools they need to reduce losses and provides risk mitigation. Payday USA trains its managers to use Teletrack’s risk mitigation services to say to ‘yes’ to all the right customers with confidence. Teletrack’s data helps the managers easily identify those applicants who pose the highest probability of becoming a charge-off before the advance is made.

“If you know anything about the payday advance business, you know that you do your collections up front. Charge-offs are always a problem — it’s the volume you have to control,” explains Scoggins. “Teaching our managers how to determine if an applicant is going to be a good risk mitigation is top priority and teaching them how to interpret Teletrack data is the biggest part of that process. We want them to use Teletrack’s tools to help them make that good decision.”

According to Scoggins, as new managers learn how to use Teletrack data and gain experience working with customers, charge-off rates fall. “Charge-offs are more of an issue when we open stores in a new state. That’s mainly due to the learning curve. Once our managers gain some experience, and learn how to use Teletrack to make the right decisions, the charge-offs drop. In the states where we’ve been operating for some time, the charge-off rates are significantly less.”

According to Scoggins, when a customer walks into one of their stores, the managers ask them several questions before the verification process begins. Managers will ask if the individual is familiar with the service and how it works. We also ask the individual if they have ever used a payday advance service before, and if they’ve ever defaulted on a payday advance. We’re trying to accomplish two things with these questions,” explains Scoggins. “We’re tying to establish a relationship with the customer and determine if he’s basically an honest person. Teletrack can confirm the customer’s answers to those questions and give us a good idea whether or not this applicant is going to be a good customer.”

After asking these initial questions, a prospective customer fills out a customer information sheet that gathers basic information and authorizes the manager to run a Teletrack inquiry. Using the Teletrack system, Payday USA managers can see all of an applicant’s activity in every state where they have taken out payday loans in the past. Teletrack gathers its unique data from non-traditional businesses across the country to provide businesses with the most complete portrait of their prospective customers. Conducting a Teletrack inquiry can tell you if an applicant has been charged-off from other payday advance stores, currently has multiple outstanding loans and whether or not the applicant is using a fraudulent Social Security number.

“The Teletrack report tells us if the customer is being honest. I can’t tell you how many times we’ve saved ourselves from a charge-off situation because we catch the customer being less than honest up front,” remarked Scoggins. “Many times they’ll say ‘I’ve never had a payday loan before, this is my first time.’ Then the Teletrack report comes back listing that they have charged-off at two or three other places. This exact scenario has played out hundreds of times in our stores over the years. It happens everyday. That’s why we use Teletrack. It’s our most efficient method of verification and it’s really the biggest part of our decision making process.”

“Teletrack is the most important tool we have in the decision making process.”

The final word on whether or not a customer will ultimately receive an advance is left to the discretion of the store manager. “We expect our store managers to combine the information they get from Teletrack with their experience and good personal judgment to decide whether a customer is approved. Teletrack is the most important tool we have in the decision making process. We have found that when a manager’s experience is combined with Teletrack data, good decisions are made, and made consistently.”

Scoggins continues, “You can place a value on good decisions. If you’re trying to save $75 a month by not using it, then you’re kidding yourself because I can guarantee that you’re not making good decisions all the time on your own. No doubt about it, that money is well spent. With the first three good deals we make, we earn enough money in fees to pay for service. If the service prevents us from making one bad deal then it’s paid for itself. Because for every bad deal we lose money on, we have to make eight good deals to make up for the loss. When Teletrack helps us weed out those bad decisions then we have substantially improved the odds on preventing a charge-off down the road.”

Payday USA also utilizes Teletrack to help their stores comply with state laws regulating payday advances. “The industry is regulated differently in each state. Teletrack helps us comply with the law. We operate ten stores in the state of Kentucky. The state law sets a cap on what you can advance in Kentucky. A customer can’t have more than two checks out and those checks can’t total more than $500. Teletrack helps us determine if the customer is being honest with us when we ask them if they have additional checks out and it makes sure that we’re in compliance with the law. We know when auditors come in that we’re in line with the law. That’s a big benefit for us.”

In addition to providing Payday USA stores with customer information prior to making an advance, Teletrack also provides service on the back end. Teletrack’s skip-tracing services help locate charge-offs and reduce overall losses. When a charge-off is reported to Teletrack, that account is monitored with every Teletrack business inquiry that comes in from across the country. When that customer attempts to do business with one of Teletrack’s businesses, current information is collected and provided back to the store. The information is often minutes old and greatly increases the odds of location and recovery.

Teletrack has a complete package of tools to help standardize and manage your business. From application verification to locating charged-off accounts, Teletrack is the answer. “If Teletrack ceased to exist, it would be a tremendous problem for us,” comments Scoggins. “It’s an absolute necessity and I would recommend it to anyone in this business. I definitely wouldn’t be in this business without it.”

The seeds of the company were planted in 1995 when Joe S. Moore opened his first payday advance store in Cleveland, Tennessee. Four years later in 1999, Moore, Brian Scoggins, Rickey Butler and Sherry Davis, founded the company under the name Check Advance of Tennessee. As the company expanded and ventured into additional states, they adopted their current name, Payday USA, LLC.

Scoggins serves as the Chief Operating Officer dealing primarily with operations, real estate and advertising. Prior to joining Payday USA in 1999, Scoggins worked with his brother Steve at Check-Into-Cash. During his four-year tenure with Check-Into-Cash he had a variety of roles including Director of Advertising, Director of Construction and information systems work.

Payday USA operates 32 stores located in Kentucky, South Carolina, Tennessee and Virginia. Currently employing a staff of fifty, the company continues to grow and is on track to ultimately operate fifty to seventy-five locations in the near future.

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