‘Four-Second Review’ FDCPA Decision Cited in Separate Class Action Filing

Don Maurice

Don Maurice

On the heels of a June 30 decision finding that a New Jersey law firm violated the Fair Debt Collection Practices Act because its attorneys spent four seconds reviewing a pleading, a complaint seeking class certification has been filed against the same firm, citing findings of fact from the adverse court opinion.

The complaint, filed in New Jersey state court last month, was removed to the federal District of New Jersey last week.

The new case focuses on a May 2014 settlement letter, which was allegedly not prepared by attorneys and was sent before an “attorney exercised professional judgment by independently evaluating the collection demands and determining that sending a collection letter was warranted.”

The complaint further alleges that the attorneys permitted non-lawyers to send letters that no attorney had personally reviewed, and that attorneys had not first reviewed the underlying account documents.

The plaintiff also alleges that the letter misrepresented that the creditor was required to report settlement of disputed debts to the Internal Revenue Service and did not “identify common exceptions to IRS reporting requirements that would apply to the settlement of disputed debts.”

Finally, the complaint alleges the letter violated the FDCPA by attempting to collect a debt subject to an expired statute of limitations and by “failing to include a notice in its letters…that the underlying debt was time-barred and unenforceable.”

This post originally appeared on the Consumer Financial Services Blog, run by ARM defense firm Maurice & Needleman.

‘Four-Second Review’ FDCPA Decision Cited in Separate Class Action Filing
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Accounts Receivable Management

Arrow Global to Acquire Rival UK Debt Buyer Capquest for $258 million

UK debt buyer and ARM firm Arrow Global Group said Wednesday that it is acquiring smaller rival Capquest from a private equity fund for £158 million ($258 million) on an enterprise value basis.

The agreement, which is subject to the approval of Arrow Global’s shareholders, brings together the two parties’ complementary expertise to form a larger, integrated group in which both brands will be retained. Capquest has a best in class in-house servicing platform and state-of-the-art collections system, which will be enhanced by Arrow Global’s leadership in data enhancement, analytics and supply chain management.

Arrow Global said that the combination with Capquest, which is owned by TowerBrook Capital Partners, will create a European debt purchase and collection business with £15.4 billion ($25 billion) in face value combined receivables under management by, £12.4 billion of which are owned. The deal combines Arrow Global’s 5.4 million owned customer account records with Capquest’s 2.8 million owned customer accounts.

Helen Ashton, Capquest Chief Executive, commented: “We are delighted to announce an agreement has been reached for Capquest to be acquired by Arrow Global. Our experience in regulated environments, strong reputation for compliance and commitment to socially-responsible practices, together with our understanding of our customers’ needs, makes Capquest an attractive partner for Arrow Global. I believe our combined businesses will create a strong company, well placed to prosper in the current environment.”

Tom Drury, Chief Executive Officer of Arrow Global commented: “Today’s announcement of the acquisition of Capquest reinforces Arrow Global’s position as one of Europe’s leading debt purchase and management businesses. The acquisition positions us well to enhance the quality of our offering to our customers and clients. Bringing together Capquest’s sophisticated and customer-focused in-house collection capabilities with Arrow Global’s master servicing model and leadership in data and analytics is an important step in achieving our vision of being Europe’s leading debt purchaser and manager. It adds a significant portfolio of assets at attractive returns, supports our broad range of origination sources and extends our reach into new asset classes.”

Arrow Global to Acquire Rival UK Debt Buyer Capquest for $258 million
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CAI Begins Campaign for Vets as ARMing Heroes Tells Story of Purple Heart Grant Recipient

With its 2014 No Debts for Vets Fundraising Drive currently underway, ARMing Heroes, the collection industry’s charity for military veterans, today took a moment to spotlight Joshua Cheever, a highly-decorated combat veteran and Purple Heart recipient who was recently awarded an emergency grant from the charity.

Sergeant Cheever dedicated more than seven years of his life to the U.S. Army as a military police officer, including tours of duty in Iraq. In 2008, Sergeant Cheever was wounded in his lower back as a result of a sniper attack, just below his protective vest, leaving him critically wounded. Thanks to lifesaving medical attention and surgeries, he survived the attack, but faced a long road to recovery. As a result of this action, Sgt. Cheever was awarded the Purple Heart.

Unfortunately, those injuries left Sgt. Cheever completely and permanently disabled, ultimately prompting his retirement from service. Mr. Cheever has found it difficult to support his family ever since. Earlier this year, he turned to ARMing Heroes and applied for a grant to help ease some of his financial stress. The charity was able to step in with some help.  When Joshua heard the news that his grant application was approved, he had this to say:

“I want to express my appreciation and gratitude to the ARMing Heroes organization and to the donors that make this great program possible. It is comforting to know that there are so many who support this great cause and are willing to help a soldier in need.  Amidst extreme financial strain related to a severe injury sustained in combat, ARMing Heroes is source of relief and reassurance that we are not facing this challenge alone. Thank you for all you do!”

Sergeant Joshua Cheever

Sergeant Joshua Cheever

To raise funds in support of the next Joshua Cheever, Credit Adjustments, Inc. (CAI), a nationwide collection agency headquartered in Defiance, Ohio, has decided to hold a company-wide employee drive during the current fundraiser. Dexter Smith, President of CAI, commented, “CAI is honored to provide support and assistance for our veterans, including some who have suffered formidable hardships due to their injuries. ARMing Heroes is an extraordinary, industry-focused charity, so we have encouraged all of our personnel to show their appreciation for service members who are struggling to pay their debts and support their own families. To be able to give back to these veterans is an incredible undertaking that CAI is proud to be a part of.”

CAI joins the ranks of several other ARM firms that have already pledged their support to this worthy cause, effectively jumpstarting the campaign and positioning this year’s drive to be the best yet.

ARMing Heroes relies on the generosity of ARM industry firms across the country to make its grant program possible, and the best way for companies to get involved is to hold an employee drive. This year, the charity has made it even easier to do just that by offering an Employee Fund Drive Starter Kit, as well as implementing a Donor Dog Tag promotion to encourage and commemorate employees’ support of military vets. Interested companies can learn more here.

Over the past five years, ARMing Heroes has provided grants to more than 100 military vets and their families, helping to ease the financial burden associated with returning to civilian life.  Most grant recipients struggle with service-connected disabilities, unemployment, and delinquent debt, and have turned to ARMing Heroes to help get their lives back on track. Stories of past grant recipients remind us all how rewarding this program can be.

However, this program would not be possible without support from generous donors like you. The charity’s flagship No Debts for Vets Charity Fundraising Drive started on September 11th and continues through Veterans Day, November 11th. Tax-deductible donations are being accepted online at www.armingheroes.org and via mail to PO Box 353, Collingswood, NJ 08108, payable to ARMing Heroes. Pledges may be made to info@armingheroes.org.

About Credit Adjustments, Inc.
CAI, a HUBZone-certified small business, is a leading provider of collection solutions for higher education, healthcare, and consumer organizations nationally.   The company has four locations across the country.

About ARMing Heroes
ARMing Heroes was founded and began operating in March, 2009.  The organization’s mission is to serve the needs of U.S. military veterans, including their spouse and children. ARMing Heroes fills a charitable niche by linking people identified with employment, credit, and financial counseling needs with the accounts receivable management industry, an industry uniquely poised to help in these areas.  Persons interested in volunteering their time and others interested in applying for benefits or pledging other forms of support are encouraged to contact the organization at www.armingheroes.org.

What Can I Do Right Now to Help?

  • Visit www.armingheroes.org and donate now.
  • Friend us and post this article to your page on Facebook.
  • Tweet about this article on Twitter.
  • Join our group on LinkedIn, the ARMing Heroes Veterans Charity Supporter / Assistance Center.
  • Comment on this article online and ask us to contact you.
  • Forward this article via email to your key contacts.
  • Print this article and fax it to your local congressional office and ask them to post our website on theirs as a resource for vets.

 

 

 

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BFrame Enhances Student Loan Rehabilitation Software

BFrame today announced enhanced software features to support new student loan rehabilitation program requirements dictated by the Federal Government and improve customer efficiency.

The new fully-featured, all-inclusive rehab tracking, funding and built in tools help customers both manage and streamline their student loan recovery processes. New federal calculators built right into the system enable agents to work with borrowers quickly and easily to obtain accurate monthly payments for rehabilitation.

“We continuously upgrade our software to support the changing needs of our customers, including any features required to ensure compliance with application regulations,” said BFrame CEO Eric Bentz. “One of the key benefits of our cloud-based software approach is our ability to easily upgrade the software so that our clients get the improvements more quickly and with less effort.”

The student loan rehabilitation enhancements are being made part of the base BFrame system. BFrame users will automatically get the upgrades at no additional cost.

Founded in 1990, BFrame is a leading provider of collections and accounts receivable management software for collection agencies, debt buyers and credit grantors. The BFrame Recovery Management System is rock-solid hosted or licensed software that is easy to implement, easy to use and easy to pay for. Its feature-rich browser interface provides a powerful, flexible and user-friendly front-end to an industrial strength debt collection and recovery management system. System modules include collections, recovery, agency management, buy/sell management and SQL query tools.

More than 3,000 collection and recovery agents use the BFrame system in daily collection operations, with approximately 20 million accounts processed each day. For more information, or to request a personalized product demonstration, visit the BFrame web site at www.bframe.com, or email sales@bframe.com.

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TCN Announces Integration with CDS Software’s Debt Collection Solution, CollectOne

TCN, Inc., a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies, today announced that TCN’s Platform 3.0, its cloud-based contact center suite, is now seamlessly integrated with CDS Software’s CollectOne, a single source debt collection solution. The integration enables CollectOne clients to streamline their processes and increase efficiencies by leveraging TCN’s advanced call center technology.

TCN’s cloud-based call center technology platform provides industry-leading features such as predictive dialer, Interactive Voice Recording (IVR), call recording, and business analytics. Its “always-on” cloud-based delivery model gives end-users the ability to quickly and easily scale and adjust to evolving business needs. Through the direct integration to TCN’s Platform 3.0, CollectOne clients can further improve connectivity and collection efficiencies without capital outlay or the addition of new staff.

“The direct integration with TCN’s cloud-based technology platform has provided our clients with increased usability across the entire CollectOne suite of tools,” said Mark Bergmann, chief operating officer of CDS Software. “We recognize TCN to be one of the best call center technology platforms in the market and ultimately selected TCN based on its all-encompassing suite of solutions and overall value add for our clients.”

The following features were added to CollectOne through the integration with TCN:

  • FTC, FCC, TCPA & FDCPA compliance tools
  • Web-based agent portal with skills-based routing
  • A streamlined, single interface
  • The most sophisticated dialer and IVR available, including predictive dialing, preview, manual, blended inbound, and attended messaging
  • Hosted Automatic Call Distributor (ACD) and Private Branch Exchange (PBX)
  • Real-time supervisor agent management and historical reporting
  • Complete campaign flexibility and control
  • Transparent billing and analytical reports
  • Free 24/7 support

“We are thrilled to have been selected as the primary inbound and outbound dialer solution for CDS Software’s CollectOne,” said Terrel Bird, chief executive officer of TCN. “We are constantly looking to expand our partnerships with other technology providers, and we are confident that this new integration will help better serve our clients within the collection industry.”

TCN and CDS Software will be hosting a complimentary webinar on Thursday, October 9 at 10 a.m. PDT to discuss benefits associated with the streamlined integration and how to effectively transform your organization’s productivity. For session details and free registration, visit https://www4.gotomeeting.com/register/946928919.

TCN is a leading provider of cloud-based call center technology for enterprises, contact centers, BPOs, and collection agencies worldwide. Founded in 1999, TCN combines a deep understanding of the needs of call center users with a highly affordable delivery model, ensuring immediate access to robust call center technology, such as predictive dialer, IVR, call recording, and business analytics required to optimize operations and adhere to TCPA regulations. Its “always-on” cloud-based delivery model provides customers with immediate access to the latest version of the TCN solution, as well as the ability to quickly and easily scale and adjust to evolving business needs. TCN serves various Fortune 500 companies and enterprises in multiple industries including newspaper, collection, education, healthcare, automotive, political, customer service, and marketing. For more information, visit http://www.tcnp3.com or follow on Twitter @tcn.

CDS Software has been an innovator in the accounts receivable management industry since 1970. Its flagship CollectOne is an award-winning, single source debt collection solution. CDS Software’s clients range from start-up collection agencies to Fortune 100 companies, collecting on a broad range of debt categories. To learn more about CDS Software and CollectOne visit: http://www.collectone.com.

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Another Court Refuses to Defer to FCC’s Express Consent Ruling in TCPA Case

A district judge in New York this week certified a class action TCPA case against a debt collection agency where the defendant argued it had express prior consent to call a cell phone because the plaintiff had provided that number to the creditor. The ruling referenced and ignored an FCC order that allowed for autodialed calls to cell phones with express consent.

In Zyburo v. NCSPlus, Inc., before the U.S. District Court in the Southern District of New York, the plaintiff alleged that the defendant had repeatedly called his cell phone using an automated dialing system in violation of the TCPA. When Zyburo moved to certify a class, NCSPlus strongly defended.

The defendant argued the case was improper for class certification because many of the proposed class members had allegedly provided the defendant — or at least the underlying creditor — with consent. The defendant based this argument on the 2008 ruling by the FCC in which the Commission held the “provision of a cell phone number to a creditor…reasonably evidences prior express consent to be contacted at that number regarding the debt.”

The plaintiff, meanwhile, urged the court to adopt the position of the Mais court, which explicitly rejected the FCC’s order.

The judge in the Zyburo case sided with the Mais court and likewise rejected the FCC’s order, writing “this Court agrees with the Mais Court that ‘[t]he FCC’s construction is inconsistent with the statute’s plain language because it impermissibly amends the TCPA to provide an exception for ‘prior express or implied consent.’”

The Mais decision and the use of the FCC’s 2008 order has proven highly controversial in TCPA cases, especially within the ARM industry. But collection defense attorney David Kaminski said that many courts are adhering to the FCC order.

“It should be noted that while the Courts in Mais and Zyburo have declined to give deference to the FCC ruling, the vast majority of district courts have taken the opposite position and given deference to the FCC ruling,” he said. “Furthermore, the Mais decision is currently being appealed before the 11th Circuit.”

Indeed, in late June insideARM covered a district court case that saw a judge speak directly to the controversy. Judge Michael Anello of the Southern District of California wrote in Hudson v. Sharp Healthcare, “Mais is viewed as an outlier decision and is not otherwise binding on this Court…In line with other courts in this district, this Court treats the FCC Orders as binding.”

 

 

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Accounts Receivable Management

Fast Tracks for ARM Executives

Mike Ginsberg

Mike Ginsberg

Last week at DCS 2014, I presented on the topic “Where is the ARM Industry Heading” during the Fast Tracks segment.  Living up to its name, Fast Tracks is intended to provide the audience with quick bursts of information on specific topics.  Here are a few of the pressing topics I covered:

Market segments will expand and contract, but the U.S. will remain a vibrant credit economy overall. Pre-1995, the big challenge confronting ARM companies was the “Hilary Factor”, which threatened the viability of healthcare, their biggest market. Healthcare agencies were concerned that policy changes would result in the elimination of their services. For nearly 15 years, starting in the mid-1990’s, the growth market for ARM companies had been credit cards. Today, the industry has gone full circle. Government and, once again, healthcare collections are the big growth markets. In the end, market segments continue to expand and contract as the always have.

Effectively managing accounts receivable will continue to be an essential component of a credit grantor’s success.Accounts Receivable is the bloodline of any business.  Choices for managing accounts receivable used to be limited to one option: Should a credit grantor use a third party collection agency or not?  Today, the options are significantly greater and decisions are being made in a heavily regulated environment.  Effectively managing accounts receivable will continue to be an essential component of a credit grantor’s success.

A strong wave of consolidation will occur among ARM companies as increased costs set in and companies find it increasingly more challenging to operate profitably as a stand-alone business.

The intense regulatory environment is creating the first true barrier-to-entry. This is good news for everyone involved in ARM. For a long time, anyone with a phone and a mouth could start a collection company, but that is no longer the case because more and more clients will not place business with start-ups. I predict the number of new collection agencies, collection law firms and debt buyers will fall drastically, which will only accelerate this wave of consolidation.

On September 24 at 2:00 p.m. EST, Rozanne Anderson and I will be hosting the third installment of our webinar series, “From Our Desk to Yours – Leadership Series for ARM Executives.”  (click here to register).  We will cover the hot topics impacting ARM companies, creditors and vendors alike. There is no cost to participate so please attend and spread the word to the rest of your team to join us. Thank you.

 

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IAB Solutions Marks 30th Anniversary with Opening of New Office

IAB Solutions, LLC, a leader in the accounts receivable and deduction management industry, announced today the opening of the new Chicago Operations Center, located at 5105 Tollview Drive, Suite 250, in Rolling Meadows, IL. The new Operations Center will provide increased flexibility and superior service to existing clients and growing capacity to serve future clients.

This newest expansion comes as IAB Solutions is celebrating their 30th Year Anniversary. Founded in 1984, IAB has a long-standing tradition of providing exceptional service to some of the most highly regarded companies as well as being an active supporter and member of the credit community. With strategic alliances and partnerships with such organizations as the Credit Research Foundation, National Association of Credit Managers, International Credit and Trade Financial Professionals, and the Unclaimed Property Professionals Organization, IAB continues to share thirty years of experience with our clients and others in our profession.

Hamilton Potter, President of IAB Solutions, said that “We are delighted to mark our 30th Anniversary with this important location in the Chicago area. As the needs of our clients continue to evolve, this investment in people and facilities is a natural step as we ensure that we will provide the best possible support for years to come.”

IAB Solutions, LLC is a nationwide, full-service, non-consumer accounts receivable service provider. Since 1984 the company has specialized in the recovery, resolution, and management of customer deductions and chargebacks, as well as the invoice collection process between companies. With five offices as well as on-site service, IAB works independently as an extension of accounts receivable departments, and partners to help its clients’ achieve specific accounts receivable goals. The company’s strengths lie in developing and maintaining long-term, supportive client partnerships, providing exceptional customer service, driving more dollars to clients’ bottom lines and delivering accurate, actionable information for deduction prevention and process improvement.

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DBA International to Host Webinar on Due Diligence Process for Debt Buyers

DBA International is offering a webinar, The Due Diligence Process for Debt Buyers, on Wednesday, September 24, 2014 at 9:00 a.m. PDT/12:00 p.m. EDT.

This webinar provides an overview of debt buying transactions, including sourcing portfolios, conducting due diligence on the portfolio and the seller, and executing debt buying transactions. Topics focus around best practices in debt buying including understanding key portfolio valuation criteria, including:

  • Tips and tricks for identifying a good portfolio source
  • Conducting due diligence on portfolios and sellers
  • Understanding of valuation criteria
  • Transaction documentation checklists and descriptions

This course qualifies for one credit for those individuals seeking or renewing their Certified Receivables Compliance Professional (CRCP) designation through DBA International.

Sponsored by CreditMax LLC, this one-hour webinar will feature industry veterans Mark Miller, Managing Member of MJM Financial Services and Adam Parks, Founding partner at ComplyARM.

Members and non-members can register for The Due Diligence Process webinar at https://www.dbainternational.org/education/webinars.asp.

DBA International is the nonprofit trade association that represents the interests of public and private companies that purchase performing and nonperforming receivables on the secondary market. Founded in 1997 by a small group of companies to provide a forum to advance best practices within the industry, today DBA has grown to represent over 525 companies. DBA provides its members with networking, educational, and legislative advocacy opportunities through an annual conference, an executive summit, regional seminars, state and regional committees, newsletters, webinars, teleconferences, and other media. DBA maintains a code of ethics and a national certification program that promote uniform industry standards of best practice which member companies must comply with in order to maintain membership. DBA is headquartered in Sacramento, California.

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ARM-U Sneak Peek: Building the Best CMS

20140919 ARM-U CMS Whitepaper Cover“A compliance management system (CMS) isn’t a product; it’s a process.”

REGISTER NOW FOR ARM-U, IN D.C. OCTOBER 14-15, 2014!

At this year’s ARM-U education and compliance seminar, in Washington, D.C., our expert panel walks compliance and operations professionals through what is necessary for a fully compliant Compliance Management System.

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Historically, collection agencies have viewed compliance as a reactionary, standalone department. Now, there’s an active shift to view compliance as a proactive process that requires full participation and collaboration across all agency departments. While the compliance department should still exist and is a factor within a compliance management system, it no longer stands on its own.

The ARM-U Panel:

Rozanne Andersen, J.D., who serves as Ontario Systems’ Vice President and Chief Compliance Officer. She is responsible for leading Ontario Systems’ corporate efforts and response to the CFPB’s launch of compliance examinations in the ARM industry. Rozanne is a recognized thought leader in the area of compliance. Her advocacy work on behalf of the credit and collection industry has resulted in landmark legislation and regulation at both the state level and at the federal level with regard to the FDCPA, FCRA and HIPAA.

Lacey Jensen, the Senior Compliance Sales Executive at Columbia Ultimate, provider of all-inclusive solutions to the ARM industry. Jensen has over six years of experience serving our industry and currently works with collection agencies in implementing an effective compliance management system. She has worked with hundreds of agencies in support of their efforts in obtaining or maintaining regulatory compliance.

Todd Langusch, the President & Chief Executive Officer of TECH LOCK, Inc. Todd has more than 25 years of privacy, data security, and information technology experience and has held over 26 different information technology certifications. Currently, Langusch works with organizations of all sizes within the ARM Industry with their regulatory compliance programs and information technology innovation. He specializes in Collection Systems Technology, business processes, and holistic information security; mapping requirements for multiple regulatory and industry standards in a single project. Langusch has a strong background within the Collection and Debt Purchasing Industry holding top IT leadership positions at several large debt buyers and has performed over 700 security assessments in the asset receivables industry. Most recently, he served as Chief Information Officer for Asset Acceptance Capital Corp. While at AACC, Langusch restructured the IT department and created a highly capable World Class IT Organization which delivered the lowest IT costs and highest productivity to date in the company’s history. He led the IT department and company to the highest revenue in the company’s history for a quarter (Q1 2013) in 50 years.

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