Debt Collectors Are on the Hook Now; Oracle Pays Big for NetSuite; VW’s Surprising Return to the Top of the Heap

Karma time…

ID-100423567

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The tables are turning on debt collectors and after forty years it’s about time. The Consumer Financial Protection Bureau (CFPB) has got big plans that involve some major federal oversight for an industry that has plagued tens of millions of Americans for decades. In 2015, the CFPB received a mind-blowing 85,000 complaints against the industry. So you might just find it comforting to know that debt collection agencies had to pay $136 million to the CFPB and several states over debt collection issues and sales of credit card debt. Now, before debt collectors make their first, sometimes-harrassing, phone call, they are required to substantiate the debt and gather information so as not to try and collect anything that they are not entitled to collect. Speaking of harassment, the industry will need to put the kibosh on their “excessive and disruptive” debt collection tactics or face consequences. Consumers will now even be able to request that debt collectors not contact them at work or during certain hours. Debt collectors will also be required to wait thirty days before contacting family members of a deceased consumer from whom they wish to collect. Some of the 9,000 debt collection agencies are pleased with the new regulations because they feel they will clear up ambiguities. But these are, after all, debt collectors we are talking about, and they are primarily concerned with how their costs will go up for compliance. However, they can probably afford a few upgrades given that the industry sees $13.7 billion in annual revenue with about 70 million Americans in the throes of debt collection. You see, sometimes there are happy endings. Sort of.

Silver lining…

ID-100435760

Image courtesy of yodiyim/FreeDigitalPhotos.net

Oracle is throwing down some major cash to pick up cloud computing business, NetSuite. Not that industry experts are particularly surprised. After all, Larry Ellison and his family already own about 40% of NetSuite shares. The deal is valued at $9.3 billion, which comes out to approximately $109 per share with a 20% premium on Wednesday’s closing price.  Larry Ellison will get about $3.5 billion out of it. So no doubt he’s celebrating. It’s one of Oracle’s biggest deals, with one just other ahead of it. NetSuite, which was founded in 1998,  supplies cloud-based business management services for about 30,000 companies in 100 countries. The company is touted as having paved the way for cloud-based computing and was the first company to offer business web-based applications. But the time now was ripe for some change and NetSuite apparently needed a little assistance from Oracle and its global reach to grow even greater. The official press release touted the companies as complementary to each other and that they will coexist in the marketplace forever. And that is just a beautiful and moving sentiment. Naturally, shares of both NetSuite and Oracle rose today, and why shouldn’t they. When the tide is high, all boats rise.

Winner winner…

ID-100154102

Image courtesy of digidreamgrafix/FreeDigitalPhotos.net

Diesel-gate be damned. Volkswagen is now the world’s largest automaker and there’s nothing you can do about it but scratch your head and drop your jaw. Even though sales in the U.S. continue to slump – though not as bad as you might think  – the German automaker sold more cars in the first six months of 2016 than Toyota, who is used to holding the title of world’s largest automaker. Volkswagen was poised to earn the title for the full year except the unfortunate emissions scandal put the kibosh on that goal. For four years in a row, Toyota was the world’s best-selling automaker through 2015. So it’s ego is probably feeling a bit bruised right about now. GM is in third place and experts don’t think it’ll ever win the top slot. Volkswagen sold 5.12 million cars to Toyota’s 4.99 million vehicles. Toyota’s sales were down by .6% over the same period last year while Volkswagen’s sales were miraculously up 1.5%.  To be fair, an earthquake in Japan damaged one of Toyota’s plants and that incident is being blamed for its shortfall in production. But apparently U.S. consumers seem to be more offended by the emissions rigging than the rest of the world with falling U.S. sales by 7%. However, the U.S. is a relatively small market for VW who counts Europe and China as its key markets. The question, though, remains if VW can keep it up and reclaim some glory.

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s