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P&A Leadership Summit 2014

The P&A Leadership Summit will return to the Paris Las Vegas Hotel, September 8–10, 2014. This will be the second year for the conference, since it grew out of the former VSCAC conference.

Designed for F&I administrators, senior managers, and anyone involved in the administration of F&I products, the show promises a broad offering of topics this year. Attendees can look forward to the show getting back to the roots of why it was first established – giving professionals a forum to discuss every aspect of F&I product administration and the issues that surround them.

The advisory board is on its way to being finalized and will be comprised of some of the industry’s most knowledgeable experts. David Trinder, CEO of F&I Administration Solutions will be chairing the board. The committee will be comprised of ten members. Confirmed to date are Mary A. Gant, senior vice president, Old Republic Insured Automotive Services, Inc.; Lori Hallissey,
 vice president operations and customer experience, Allstate Dealer Services; Dan Lievrouw, vice president of operations and IT, American Guardian Warranty Services, Inc.; George Krnich, vice president, claims & risk management, American Auto Guardian Inc.; Russell Ridley, director, information technology, Gulf States Financial Services Group; Brent Allen, president of StoneEagle; Marc Coulter, owner, M.C.I Inspections; and Mitch Rand, president, Warranty Inspection Services.

What can attendees look forward to this year? While planning is still in the early stages, the advisory board is excited at the prospect of developing sessions that will cover administration from top to bottom. Topics from evaluating the effectiveness and efficiency of claims departments and call centers, to sessions on parts sourcing, inspections and much more are on the table with the goal of providing a complete picture of the state of today’s F&I product segment.

“I’m looking forward to working with our cumulative client base to find timely and pertinent topics for the conference,” commented Allen, “It is our hope that attendees will walk away feeling that they found great value, and that their time was well spent.”

Trinder said, “We want the summit to be a forum to discuss the core issues around managing costs and driving revenue in F&I. We are pleased at the level of industry knowledge and expertise represented by the board. There are so many industry experts who have agreed to serve on the board. With such a wealth of experience between them, I am really excited about getting started planning a fantastic show this year.”

Rand noted, “The importance of what happens after a service contract is sold and a customer claim has been filed should be a higher priority at the P&A Summit. I’m very excited to start talking about how alternative part providers and inspection companies play an important role in customer retention and overall customer satisfaction in our industry. Combine this with the advanced technology and information that we can make available to our clients, and I’m confident we will have some very important discussions.”

Gant, who formerly served on the advisory board for the Vehicle Service Contracts Administrators Conference (VSCAC) said she is looking forward to the P&A leadership summit and being a part of the planning. “It is a great place to network with other professionals on current topics that affect our industry,” commented Gant. She brings a unique understanding of the underwriting process as well as a seasoned perspective of accounting and administrative issues to the advisory board. She expects for the session topics to address the most relevant issues present in the industry today.

“As a committee,” said Krnich, “we want to provide a comprehensive overview of topics applicable to administrative challenges in F&I. We will be looking at sessions that focus on evaluating the effectiveness of your claims department. We will also discuss customer service skills, communication skills and call center efficiency as planning gets underway. It will be interesting to see what other aspects of the industry arise once we start discussions.”

Lievrouw agreed and added, “I am looking forward to talking about customer service and claims handling service level standards.”

“I am excited and honored to be on the board this year,” says Coulter, “The warranty companies’ are asking for consistency and the only way to do this is by having an industry standard for training. This is all we have ever done at my company and I feel like we have written the book on how to do inspections. The more we can train people in a consistent manner that meets industry standards, the more smoothly the whole system is going to work. I really look forward to exploring this topic further with the board as we plan sessions for the fall.”

The P&A Leadership Summit is a joint production between P&A magazine and F&I and Showroom magazine. Formerly known as the VSCAC, P&A Leadership Summit was renamed to reflect a renewed focus on the high-level issues facing the auto finance industry today.

Topics last year included sessions on technology, an all-star panel of agents who explored current issues and hot topics in the industry, and a presentation on preserving competition in auto financing given by David Wescott, chairman, NADA.

Scott Eisenberg, founder and managing partner, Amherst Partners spoke on the U.S. Fidelis debacle in his presentation, “U.S. Fidelis: Lessons Learned from the Inside.” Having been assigned by the U.S. Bankruptcy Court to steer U.S. Fidelis through bankruptcy, Eisenberg gave an insiders account of this history-making case. In his presentation, he shed light on what led to the collapse of the company and the eventual imprisonment of its owners. Eisenburg explained why no one predicted the downfall of U.S. Fidelis and the impact it had on the service-contract industry. Attendees learned how not to make the same mistakes in this riveting presentation.

Another session favorite in 2013 was the keynote address delivered by attorney Terry O’Loughlin, director of compliance, Reynolds and Reynolds. In his presentation, “Think Like a Regulator,” he demonstrated some of the pitfalls of documentation using real deal jackets. Also discussed were simple, effective processes dealers could use to eliminate potentially fraudulent situations and the key areas regulators tend to focus on.

For more information about the P&A Leadership Summit 2014 visit www.pa-leadershipsummit.com or contact David Gesualdo via email or at 727-947-4027. Advance tickets are on sell now with discount early-bird rates available. The conference will take place September 8 – 10, 2014 at the Paris Las Vegas Hotel.

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A Look at US Fidelis From the Inside

The first official P&A Leadership Summit last week at the Paris Hotel and Casino in Las Vegas kicked off with a lunch keynote from Scott Eisenberg, founder and managing partner, Amherst Partners, and the chief restructuring officer for US Fidelis during the bankruptcy proceedings; as well as Terry Keating, managing director, Amherst Partners.

US Fidelis, Eisenberg noted, at the time was the largest provider of vehicle service contracts, and employed more than 1,000 people to run the business. Darain and Cory Atkinson he noted, originally brought him in at the direction of investors – before the bankruptcy proceedings started – to try and identify what was going wrong, and fix the problem. They were hired to turn the company around, but, Eisenberg said, by the time he was brought in, it was just too late. “We quickly concluded that there was not an operation to save,” he said. “So we decided to do a wind-down of the company.”

One of the striking things he noted was that it wasn’t fraud that was the ruin of US Fidelis – every dollar, Eisenberg said, was completely accounted for in the books, with nothing hidden and every transaction transparent. The problem, at heart, was one of mismanagement. The Atkinsons were using the incoming funds from new contracts to pay out current claims, and instead of setting aside a reserve fund, they were taking the excess out as profit. According to Eisenberg, there was about $101 million in funds taken out by the two brothers in total. They were, essentially, running the company on a cash basis.

That’s not to say that poor business decisions alone were the issue. Eisenberg noted a few additional problems that contributed to the downfall – refunds were not paid in a timely manner (or at all), they used high-pressure sales tactics and they violated Do Not Call regulations, all of which led to high rates of cancellations and unhappy consumers. On top of that, the economy crashed, so, with escalating cancellations and the need to rely on incoming cash to pay outgoing claims, the system quickly became unsustainable.

“The industry was not the problem,” said Keating. “They had a flawed business plan and careless execution.” He went on to note that it was “like the Wild West,” with no good policies in place, no regulations about how to handle claims and customers, and no internal controls or oversight. The company was open and transparent about everything it did, but the company was operating with very little real structure. “No one there asked the right questions,” Keating said. “The blame falls all around.”

In the end, Eisenberg noted, the company was liquidated. They had to cease industry involvement, all of their employees lost their jobs with no severance or benefits, and the Atkinsons had to forfeit almost all of their assets back to the company, to be used to pay off creditors, including a class action of customers looking for refunds. That class did not include all customers – even in the midst of the proceedings, all contracts continued to be honored until they expired – consumers could still make claims against their paid contract, and receive the benefits they were entitled to. However, by 2009, Eisenberg estimates that as many as 80% of contracts were being cancelled.

Each brother was allowed to keep $500,000 and one of them was allowed to retain an educational trust he had set up for his children. Other than that, they lost everything – at the end of the day, Keating estimates that about $200 million was recovered from the joint Atkinson assets, including properties sold around the world, all be it at a discount – for example, a $30 million house (palace would be a better description) sold for just $4.7 million. But creditors and providers lost out as well. Keating noted that media and vendors in the end had to walk away from huge amounts owed because there was simply nothing left with which to pay them.

“At the end of the day, it was a very painful thing,” said Eisenberg.

The hardest part, said both Keating and Eisenberg, was that the brothers were both nice, personable men. However, both of them did have prior felony convictions, which Keating said should have raised red flags with investors – the information, he noted, is available via a quick Google search, so it wasn’t being concealed. “No one advised them not to do this,” said Keating. “No attorneys, no one told them they needed reserves. And if they had taken $20 million out rather than $101 million over the five years, the company would have been fine.” The brothers were eventually both convicted on charges of consumer fraud and violations of consumer protection rules, and were sentenced to prison time.

In the end, by the time Amherst Partners came in, the issues were insurmountable. Which is a shame, Keating said, because the day-to-day people were very good at their jobs. “There was great reporting, and they were very good. It was clearly an issue confined to the upper level.” They were playing by the rules at that point, “but the sins of the past were just too much to overcome.”

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Looking Forward to The P&A Leadership Summit

The P&A Leadership Summit (PALS) will debut at Industry Summit in Las Vegas at the Paris Las Vegas Hotel on September 16. It will replace the Vehicle Service Contract Administrators Conference (VSCAC) conference – the scope of that event had widened enough to warrant a new name and a new focus. PALS is co-sponsored by P&A Magazine and F&I and Showroom magazine, and the aim is to provide a comprehensive overview of the state of the F&I product segment, including technology, innovation and compliance issues.

One of the highlights of the one-day event will be the featured speakers and keynotes – there are three lined up, each a show-stopper in it’s own right. First will be a look back at the U.S. Fidelis debacle, and what the industry can learn from it, to ensure it never happens again. Featured speakers from Amherst Partners’, Scott Eisenberg and Terry Keating, will lead the discussion; Eisenberg was the chief restructuring officer and part of the independent team assigned to manage U.S. Fidelis after it filed for bankruptcy, and Keating is the managing director of the investment banking, corporate restructuring and management advisory firm.

The first keynote will feature Terrence O’Loughlin, director of compliance for Reynolds and Reynolds. O’Loughlin has spent the last few decades as a practicing attorney, and will bring a fresh outlook to the topic of compliance and regulations. He believes that while recent moves from Washington D.C. have added new complexities, the essential issues remain the same – unfair and deceptive practices, document fraud, and false or misleading advertisements. There are a few simple steps dealers can take to protect themselves, and he’ll cover them in this session.

David Westcott, chairman, NADA, will give the last keynote, which will close out the show. He’ll take a closer look at the indirect automotive financing model, and examine why it’s so important to maintain a healthy industry.

Beyond the keynotes, PALS will feature two panel sessions packed with industry heavy-weights. A panel on technology will be moderated by Greg Arroyo, editorial director, F&I and Showroom and Auto Dealer Monthly, and will feature Brent Allen, president, StoneEagle; Robert Hymen, president, Service Payment Plan; Kumar Kathinokkula, COO, F&I Administration Solutions; Kelly Price, president, National Automotive Experts (NAE); and Christina Schrank, president, NAC. They will examine how technology is changing the F&I industry, and what providers, agents and dealers can do to stay ahead of consumer demands.

The second panel will be moderated by David Trinder, CEO, F&I Administration Solutions, and will look at key developments in the agent sector. Panelists include John Braganini, principal, Great Lakes Companies; Randy Crisorio, president and CEO, United Development Systems (UDS); Linda Fisher, partner, Dealer Assurance Group (DAC); and Glen Tuscan, president, Dealer Commitment Services Inc. They will take a closer look at how the expectations of providers and administrators have changed in the last several years, with a focus on how both sides can come together to form lasting relationships with dealers.

All in all, this is a show you won’t want to miss. If you haven’t already added the P&A Leadership Summit to your Industry Summit agenda, start making plans to attend now; it can be added on to your registration for an additional $395. For more information, including speaker bios and a detailed agenda, visit www.pa-leadershipsummit.com.

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