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Source of Title Blog

Paper Collar Joe
by Robert Franco | 2007/06/12 |

Many of you may know the phrase "there is a sucker born every minute," and incorrectly credit it to P.T. Barnum, the founder of what became the Ringling Brothers and Barnum and Bailey Circus. There are many stories about the origination of the phrase. The most likely source was con-man Joseph "Paper Collar Joe" Bessimer and the full quote was "there is a sucker born every minute... and two to take 'em."

What ever the origination, the phrase most definitely applies to the new "title con" that plagues the abstractors. It seems the new path to riches has been paved by a new breed of con-men who operate under the guise of legitimacy: servicing clients on the front end, while not paying those who do the work on the back end. What could be more profitable than selling something you get for free?

How could that possibly work? Well... there is no shortage of "suckers" as Bessimer pointed out in his quote. Though not the typical suckers, abstractors are hardworking people providing a valuable service who consider themselves "businessmen." However, they all too often allow themselves to be scammed by unscrupulous individuals and companies. Since the inception of Source of Title's forums, the dominant topic has been companies who habitually order title work from abstractors and never pay for it. When one abstractor cuts them off, there is another waiting to do the work. Sound familiar?

Source of Title Blog ::

What I have not seen... not even once... is a lawsuit to put an end to the con. When a company is out of abstractors, or their reputation begins to precede them, they simply change their name and start over. By the time anyone catches on, there are ten's or hundred's of thousands in invoices outstanding.

The first company I heard about that was doing this was a company in Florida. They changed their name and intentionally misled abstractors into believing it was not the same company. Soon, that company too was out of business leaving many abstractors unpaid.

So what becomes of the people that operated these companies? Well, one of the companies that has been reported in the Source of Title forums that wasn't paying their abstractors was Title Search USA. Surprisingly, they haven't changed their name... they appear to still be in business. Here are a few of the comments about them:

I have been in the Title business over 20 years and this is the first time a company has refused to return collection calls. I have repeatedly attempted to collect a small account and no one will call back.

I finally got paid, but I had to threaten to call the bank that
they were doing the searches for... I know quite a few people they have burned through in this area already.

I have tried everything in the book to get these people to pay their past due invoices.

Title Search USA continuously pops up on these posts as a non-payer. I would suggest based upon personal past experience with these types of companies to stay away!!!! We got burned for several hundred dollars that I gave up trying to collect on about 6-8 months ago.

A recent post turned up a new business venture of the company's CEO, Don Sedy:

Blue Ocean Consulting Group, LLC provides full service business consulting to everything fishing. Don Sedy started the firm in 2007. Don shares a deep passion and love for fishing and the marine environment. Additionally, Don has an extensive background in business and an entrepreneurial spirit.

Don has been involved with the development and growth of two small businesses for the past 8 years. He started a title research company in 1999, which he helped grow to over 8 million in sales within 4 years. Additionally, he was a key factor in starting a franchise business that was ultimately sold.

It begs the question, with over $8 million in sales, why can't the company pay their abstractors? It would certainly seem that Sedy has been quite successful, despite those who claim to have gotten shafted by Title Search USA.

There have been many more companies, even more brazen than Title Search USA. I received a phone call from a reliable source that informed me of a man who recently owned a company that was constantly in the forums for non-payment who closed that company down and began operating under a new name. Upon further investigation, I have found out that the same person owns, or controls, several other companies.

And... are you ready for this? When the old company was closed they owed approximately $500,000 to abstractors across the country! That is half of a million dollars! Despite the fact that the company has been the focus of countless complaints on the Source of Title forums, not one law suit has been filed. Now, the owner is operating again, and, probably, using the same unknowing abstractors.

What makes the abstractors so unwilling to take legal action? Perhaps most are too unfamiliar with the legal system, or they just don't have the money to hire a lawyer. Maybe, they don't think its worth it to spend the money to collect what they are owed. However, there is another consideration that must be taken into account. It isn't just the money they are owed now... its how much they will be owed when the same person cons them again, and the harm they will cause countless others as they move down their list.

Legal action is necessary to put an end to this. Why don't all of those people that have posted their problems with the same companies in the forums join together and share the cost of the litigation? I would be willing to bet that if a suit was filed, there would be many more who have remained silent joining in.

As an alternative, why not a collective effort to notify the attorneys general of the states where these companies are located, and the states where the abstractors operate? Surely, if enough people file complaints someone will take notice. When one company goes out of business it is a civil matter that the states will not likely get involved in. However, when the same owner routinely opens new companies to avoid paying their abstractors it seems to me a crime has been committed.

These sophisticated con-men are making millions of dollars and they continue to do so with impunity. The abstracting environment allows them to easily continue to take advantage of abstractor after abstractor. The abstractors have made it easy for them to do so and they have shown that they are unwilling to take any action to stop them.

Once again, Paper Collar Joe has been proven right - "There is a sucker born every minute... and two to take 'em."

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

Rating:

Categories: Abstractors, Billing Issues

1596 words | 8809 views | 7 comments | log in or register to post a comment

	I suggest that abstractors visit no...
	I suggest that abstractors visit notary forums and follow their lead. You can very effectively use the district justice system for collection. I have posted our procedures on Radical Title Talk, too. Every party, including title agents, should bill for their services and expect payment. You can't be afraid. Abstractors are afraid to offend title agents. Title agents are afraid to offend lenders and so on and so on. Someone has to pay and until everybody steps up to the plate and raises the collective respect for services rendered, forget it! You will get the respect you demand. The next time you provide free title work for a lender or Realtor's client and don't demand payment when the deal doesn't close, think of all the abstractors not being paid. By giving away services you are contributing the the overall lack of dignity and respect given our industry.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/06/12 \| log in or register to post a reply

	Bravo Robert!! This is something t...
	Bravo Robert!! This is something that is becoming more & more of a problem. One of the problems regarding this is that these people use other names on their corporate papers, so it is difficult to find out who really is behind the company. I say that no matter who owns the company, abstractors need to band together & get rid of them & expose them for what they are. Wanda
	by Wanda Steudel \| 2007/06/12 \| log in or register to post a reply

	We had a triumph this morning in ou...
	We had a triumph this morning in our office. It was the dawn of a new day. We had our first Choose & Save transaction fall thru. Why is that a triumph? Well, our Choose & Save program which we started a few weeks ago is based on the concept of the consumer paying a deposit for title services. In exchange for that, we give them a better price at closing by waiving optional fees. So, if the deal closes, we make less - the consumer saves. If the deal doesn't close, the title examination work has been covered with no further collection effort. So, this morning a buyer told us they discovered mold in the house and the deal fell apart. We are very sorry for the customer and we are sorry to have lost a closing, BUT my bookkeeper looked at me and I looked at her and smiled. The abstract was paid for. The lien letters were all covered AND we got a bit towards our time. All we had to do was scan and log the file - no invoice, no follow-up. It was a beautiful moment. Just had to share.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/06/15 \| log in or register to post a reply

	I'm one of those suckers, unfortuna...
	I'm one of those suckers, unfortunately. I've also done what I guess few have: I'm suing. I do not know if the papers have been filed yet, but I gave the go-ahead to my attorneys to sue one of my ex-clients whom I believe knew EXACTLY what they were doing when they stiffed me for close to $20,000. When a corporation goes under, it's hard to collect. When a corporation goes under AND OPENS UNDER ANOTHER NAME, it's big trouble for them. I urge EVERY abstractor to contact Miller, Ross & Goldman (mrgpartners.com) and let them try collections for you. And if need be, they will file suit. It costs you only filing fees. They will take their cut out of whatever they manage to collect. Getting something back is better than getting nothing at all! Alix
	by Alix \| 2007/06/18 \| log in or register to post a reply

	Good for you Alix. Please keep us ...
	Good for you Alix. Please keep us all posted on the status of your litigation. And, for the record, I wouldn't call you a "sucker" at all. These companies prey on abstractors, and they are good at it. Glad to see you taking a stand and, hopefully, teaching one of these companies a lesson.
	by Robert Franco \| 2007/06/18 \| log in or register to post a reply

	I agree, Robert, that many abstract...
	I agree, Robert, that many abstractors fear either the time, expense, or effort involved in suing for bad debt. BUT, I want to remind all of you who are members of NALTEA that you now have access to good FREE information that will help guide you through the process. Wexford & James (www.wexfordjames.com) contributes an informative article to NALTEA's monthly newsletter that will help you identify and proactively collect accounts on your own. If, however you find yourself the target of "Paper Collar Joe", Wexford and James can help. IF YOU ARE NOT ALREADY A MEMBER OF NALTEA, THEN HERE'S ONE OF THE MANY GOOD REASONS TO JOIN. And, Robert, your comment about a joining of forces against these con men was a great suggestion. Just the mere act of sharing your experience with someone who has had similar problems can empower both of you immensely. United we stand. Jill
	by Jill Kissell, A-1 Abstracting \| 2007/06/19 \| log in or register to post a reply

	My name is Josh and I am an avivid ...
	My name is Josh and I am an avivid reader of this blog, and I know exactly what some of you guys are going through. I work for Wexford & James out of Des moines IA, and we have been working with many title & abstract companies about these same issues. Wexford & James is a contingent based commercial collection firm and has been assiting some of the NALTEA members all over the U.S., with their collection requirements. Our responsibilities and services include collecting past due debt & litigation management. It is interesting that some of the same companies names keep reoccuring from placements that our clients send us, like US Title, and Contemporary Realty, and so on. If you would like some information on how we can assit your company, please, email me or give me a call. We're here to help! Josh Lukins WEXFORD & JAMES, LLC 877-547-6848 x 116 jlukins@wexfordjames.com W&J Collects The Money You Have Earned, But Not Been Paid.
	by Joshua Lukins \| 2007/06/19 \| log in or register to post a reply

Source of Title Blog

Robert A. Franco The focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

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