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My Client from The Twilight Zone
by Jeff Callender
When I was a kid, I used to love the TV show, The Twilight Zone. Thankfully the reruns still show up on cable stations,
ensuring every generation can have their imaginations stretched with Rod Serling’s mind-expanding stories.
Remember the one about the guy who had a stopwatch that could stop the progression of time? He’d
click the button, and everyone around him would freeze as time stood still for everyone except him. So he decided to get rich by robbing a bank and stopped time to do so -- but while he was taking bags and bags of
money from the vault, he accidentally dropped the watch and broke it. He condemned himself to live in a world forever frozen in time. Wow, I’ve never forgotten that story for probably 40 years. There were many
others.
Well, I have a story to tell that fits right in Rod Serling’s genre. Without a doubt this story is “My Client from The Twilight Zone.” Yet this actually happened, showing yet again the truth is
without a doubt stranger than fiction.
Just for fun, let’s tell this story like Rod Serling would. Picture an old black and white episode of The Twilight Zone coming on your TV set, starting this way.
Jeff Callender is sitting at his office desk, working a normal day at his factoring business. But then a strange look comes to his eyes – a look that suggests he’s seen something that ordinary people would
never see – and he looks directly up into the camera and begins to tell his story. The screen fades to black, then returns as his narration continues….
Last spring a consultant referred a company to me
which provides staffing to apartment management companies. The consultant was new and did a good job of matching us up and I was impressed with her professionalism, friendliness, and insightfulness into
personalities. There were a few holes to a few things as the account unfolded, but they didn’t seem to be significant as we got under way.
This business, which I’ll call American Staffing, is owned by a
woman I’ll call Karen who had an employee I’ll call Megan. Karen has a friend I’ll call Debbie, who enters the story shortly.
Karen started factoring and was a delight to work with. She was personable, quite
skilled at her business, and able to book new customers quite easily. She started factoring several customers immediately and regularly factored around $3-5k every week for several months. Things were going along
very smoothly except for one little problem: almost none of her customers were paying their bills. This seemed odd because all had good credit ratings.
Karen took responsibility for this and assured me they
all would pay. In one or two cases when it appeared they wouldn’t, we charged back the invoices with her complete cooperation. I continued to fund her each week, thinking payment was just around the corner, and that
the customers were simply slow, as is common in this industry.
About two months into our factoring, Megan decided to leave the company. About that time my sister Jan began working with me to make calls on my
clients’ slow paying customers. At the top of her list of customers to call were most of Karen’s accounts.
It didn’t take long for Jan to find that most of these customers had never received the invoices
Karen had factored. In fact, since Megan had left, Karen discovered there were several unsettling events surrounding Megan’s work. Some petty cash had disappeared from the office. A check for a friend of Megan’s had
been written without Karen’s knowledge. But to top it off, most of the invoices Megan had supposedly sent to these customers were found buried in a desk drawer in Karen’s office. They had never been mailed, but they
had been faxed to me for advances. (Chalk one up for not getting original invoices. Verifying them with apartment management companies would have been very difficult anyway, another hazard of working with this type
of customer.)
Anyway, as Karen mailed the invoices and Jan continued to call for payments, a few invoices were paid but it was clear that most were turning into problems. By this point I was way over my
normal limit of $30k in outstanding invoices with a single client and I had a lot more invested in these invoices that I should have. I had stuck my neck out for this client and it appeared I could easily get my
head lopped off. (Chalk another one up for avoiding over concentrations and not investing more than you can afford to lose…my very own “Cardinal Rule of Money.”)
However, Karen continued to press customers
for payment, and even filed liens on each management company that wasn’t paying. A few started to pony up, but we were still tens of thousands of dollars in the hole. Old invoices were going past the 90 day recourse
period right and left. I looked for a larger factor to buy me out because I was over extended. I found one who might have helped, but she wasn’t thrilled about the apartment management industry… nor are any factors
who’ve been in business for some time. (Note to self: in the future, I will be strongly uninterested in apartment management companies as paying customers. After all, this isn’t the first time I’ve had this
experience with such payers. Will I ever learn?!)
Meanwhile I had urged Karen to get out of the apartment management staffing business and work with companies who paid their bills on time. She agreed
wholeheartedly and immediately began placing workers in a couple car rental agencies and a real estate office, both of which had good credit scores. So I continued to fund these new, more dependably paying
customers. We’d just have to work things out with the apartment management companies, to which she was no longer sending workers. We agreed to deduct $500 from each weekly advance to start paying these bad invoices
off.
Then the first Twilight Zone event happened. One Tuesday morning, the very first phone call of the day was a voice mail message from Karen. Only it wasn’t Karen. Only it was Karen.
Here’s what the voice mail message said: “Mr. Callender, this is Karen. The person you’ve been talking to at American Staffing says she’s me, but she’s not. I’m Karen, the owner of the company. The person you’ve
been working with is my ex-friend Debbie, who’s been using my name. I want to sever all ties between my company and yours. Please call me as soon as you can.”
I called her as soon as I could.
Which was
about two seconds, though it seemed like two hours as the thoughts of what these repercussions could mean raced through my mind. None of them were good. Words like “forgery” and “fraud” and “bad debt” and “prison”
kept repeating. Very unpleasant.
During that conversation, the real Karen said she had given Debbie permission to use her company name and her personal name to run the business. Debbie had asked to do this
because she knew she needed to factor but none of the other factoring companies she talked to before me would accept her – she was too small for them. Karen knew Debbie was good at the business, wanted to help her
friend, and everything was fine for a while. But then they’d had a falling out and Karen didn’t want Debbie using her name any more. She wanted to make a clean break.
There was just one little problem.
I was owed about $50,000, about $30,000 of which were with the apartment management companies for invoices that weren’t getting paid.
When I told the real Karen that fact, there was a long, long silence.
Then her voice started to tremble and she said she had no idea that much money was involved, and that she was a single mother barely getting by on the income from her day care center, and there was no way she could
pay me back. No way. I made sure I had her correct phone number and told her I needed to talk to Karen…er, Debbie, whom I’d been calling Karen all this time. Calling her by her real name would take a while to
get used to.
As the fickle finger of fate would have it, unreal Karen/real Debbie happened to call me just a few minutes later, with her usual cheerful voice, checking to see if any customer payments had come
in, as she often did. After a little friendly chit chat, I confronted her with my dilemma. “Karen,” I said, “I just had a very strange phone call. A person who says she is you said she doesn’t want to do business
with Dash Point any more. She says you’re not her. I mean you’re not you. I mean not Karen. Now, I don’t know what to think, but I do know that someone is lying to me.”
Very, very long silence.
Then unreal Karen blurted in a quick staccato, “I’ll call you back.”
Click.
I decided to let her stew in this for a while and went about my business. After about half an hour the real Karen
called me. Just a minute or two into the conversation, she said, “Oh my gosh, she’s here. I’ll call you back.”
Debbie had driven to Karen’s day care center and entered the room as we were talking. I’d have
given anything to have been a fly on the wall during that conversation.
Anyway, the two of them cleared the air and made up. It turns out that Debbie’s child had been in Karen’s day care program, had caused
some kind of problem, and Karen felt the child needed to be removed. This made Debbie mad and caused the rift between them.
But there was still a little problem: Debbie was using Karen’s business and
personal name. And she – Debbie as Karen – owed me one heck of a lot of money. But since the real Karen’s name was on the contract, she was on the hook for it. But to make it even more convoluted, Debbie had
actually signed all our contractual documents in Karen’s name, and sent the real Karen’s driver’s license as ID. So who owed me the money was a bit fuzzy, but Debbie had clearly forged legal documents, though with
Karen’s knowledge. She was up to her knees in doo-doo, and knew it.
I decided to let Debbie wallow in it for a few days and left her alone. Meanwhile the real Karen said she was willing to sign the business
over to Debbie, and was more than glad to make sure the debt was Debbie’s, not hers. As long as I got paid, I was willing to work with Debbie because if I didn’t I would no doubt be out an awful lot of money.
And despite her dishonesty, Debbie was actually nice to work with; she was getting new business with good paying customers and was still hounding the apartment people. It wasn’t like she was trying to slither
away from anything; she was definitely hanging in there and wanted to make the business work. If she’d been out to rip me off, she’d have been long gone once her knee-deep doo-doo hit the fan.
After about
three days Debbie finally called me and said, “Jeff, I have rehearsed this phone call about a million times. I can’t tell you how embarrassed I am and what a fool I’ve made of myself and how sorry I am that I
haven’t been honest with you.” I answered, “Debbie, I’m you’re friend. You don’t need to pretend anything. Just be you and we’ll get this thing worked out.” Which we did, and things were much better thereafter. A
huge weight was lifted from her shoulders, and her voice reflected it.
And then the second Twilight Zone event happened.
A week or so after all this Debbie called me up on Monday and said this.
“You are not going to believe what happened this weekend. You are absolutely not going to believe this.”
“What happened?!?”
“Well, this weekend I was at a nearby casino. Now I don’t normally
gamble at those places…” (“Then why were you there?” I wondered, but didn’t ask.)
“…And I was just kind of going by the slot machines. I didn’t even know what I was doing. I thought I was at a dollar
slot machine, and just for the heck of it I put a $20 bill in the machine. I pushed the button on it a couple times and all of a sudden big lights started flashing and a siren went off. A lady from the casino came
up to me and said, ‘Congratulations, ma’am, you just won the jackpot!’ I figured I’d probably won a couple hundred dollars or so since I was at a dollar machine. But actually I was at a $5 machine and didn’t even
know it. I asked her how much I’d won, and she said ‘You won $27,000!”
This time there was a long silence from me.
“Wow, that’s fantastic!! Ummmm…..what are you going to do with that money?”
She said, “Well, I’ve been thinking about that ever since it happened. I really want to get this debt to you paid off, and still have a bit of this left over to put in savings, about $5,000 or so.”
Some very
quick calculations led me to estimate the advances to the apartment companies would add up to about $22k or so. I wasn’t sure how much the discounts would add up to, but I knew they’d be a chunk, seeing how old many
of the invoices were. We agreed that I’d calculate what I was owed once we charged back all the apartment invoices, and then get back to her. Getting exact numbers would take a while.
That afternoon I
calculated what she owed me for the apartment invoices, and sure enough, the advances plus the discounts on the 69 unpaid invoices came to about $30k. However, we had about $3k set aside in reserves, which could be
applied to the debt. Which, remarkably enough, left her owing me around $27k…precisely the amount she had won.
I called her back the next day and said, “Debbie, there’s good news and bad news. The good news
is that $22k I estimated for the invoices was about right, actually it’s about $23k. The bad news is, the discounts bring the whole amount up to about $30k. But you have $3k in reserves, which we can apply to this.
So you’ve won almost exactly the amount that you owe.
“Now here’s the other good news. Once you buy these invoices back for $27k, you have full rights to all the payments that are collected from the
apartment management companies. That means if you collect only half of the $30k they owe, you’ll end up with $15k in your pocket, which is three times what you wanted to keep from the jackpot in the first place. If
you collect it all, you’ll have $30k.”
She thought this was a very fair deal and agreed to overnight me a cashier’s check for $27k, which was already sitting in her bank account from the casino. And that’s
exactly what she did.
Now she is more motivated than ever to collect the balance owed from the management companies. And I’m more than happy to let her. And more determined than ever to not deal with them
again.
(Return to Jeff Callender sitting at his office desk.) “So there you have it, a story you’d have both in your nightmares and in your dreams. Yes, this is without question a… Client from The
Twilight Zone. And by the way, the car rental companies and real estate office are paying just fine.”
Then Rod Serling walks into the picture and concludes: “Let this be a lesson to all small factors out
there: you never know whether your clients exist in your world, or somewhere else, farther away; somewhere like… The Twilight Zone.”
(Closing theme music from The Twilight Zone, as picture fades
to black.......)
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