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JBS PROTECTED MERCHANTS FROM $245 MIILION IN BAD CHECKS IN '91; CHECK AUTHORIZATION COMPANY ATTRIBUTES RECORD LEVEL TO RECESSION

 JBS PROTECTED MERCHANTS FROM $245 MIILION IN BAD CHECKS IN '91;
 CHECK AUTHORIZATION COMPANY ATTRIBUTES RECORD LEVEL TO RECESSION
 RINGWOOD, N.J., April 7 /PRNewswire/ -- JBS Associates, one of North America's largest check authorization companies, shielded its clients from a record $245 million in bad or potentially bad checks during 1991. The year's total represented a 7.7 percent increase over the $227.5 million figure compiled in 1990.
 The 1991 total includes $200 million in potentially bad checks that registered as "hits" on the Ringwood-based company's negative file and, thus, were declined at the point of sale. Added to this were $45 million in checks that were accepted but subsequently returned unpaid --with payment rendered to the merchants by JBS under its guarantee program.
 The totals were derived from the full spectrum of JBS' 37,000 merchant locations, including retail stores, auto dealers, auto repair centers, catalog/mail order houses and hotel/motels. All told, the company authorized close to $6 billion in checks last year.
 "The rise in activity is definitely a reflection of the economy," said JBS President and CEO Carl Williams. "Unemployment was at extremely high levels, with many people out of work for the first time. After a while, some of these people become financially desperate. They've depleted all of their savings, they've borrowed all they can from relatives or friends, and they've reached the maximum limits on their credit cards or home equity loans.
 "Under these circumstances, the check becomes their only alternative payment method," he continued. "People, who've otherwise been honest all of their lives, will write a check to make a necessary purchase or auto repair even though there may not be enough funds in the account at the time to cover the draft."
 In situations where the bad checkwriter is unemployed or undergoing another type of economic hardship, JBS is offering extended payment plans. "We'll work with them so they can pay down the debt on the returned check and be removed from our negative file," said Ed Myers, JBS executive v.p.-operations.
 Williams went on to note that bad checks traditionally account for a larger percentage of merchants' overall check volume during economic downturns. "In times of soft retail sales, the good checkwriter is the one who is most likely to curtail his/her purchases. But the bad checkwriter stays there," Williams explained. "So, while overall check volume may be down, bad checks are accounting for a larger piece of that smaller pie."
 With the situation as such, "it becomes more important than ever for retailers and other businesses to protect themselves from bad checks," said Williams. "Our growth rates for this past year indicate that merchants apparently recognized this need."
 According to Williams, 1991 was JBS' best year ever in terms of signing on new merchants, with over 8,000 locations added during the 12 months. At year end, the company was authorizing checks at over 37,000 business locations throughout North America.
 This increase in new clients fueled a substantial rise in overall transaction volume. Apart from shielding more merchants from bad checks, such an increase also indirectly leads to faster throughput at the point of sale for consumers with good checkwriting histories.
 "As a result of last year's increased volume, our positive file (the data collected on good checkwriters) expanded significantly," Williams related. "This means that more and more good checkwriters will not get referred at the point of sale; we know that their checks are likely to be good."
 -0- 4/7/92
 /CONTACT: Carl Williams or Gabrielle Tarpey of JBS, 800-526-5380; or Bill Parness of Parness & Associates, 908-290-0121, for JBS/ CO: JBS Associates ST: New Jersey IN: FIN SU:


GK-LR -- NYFNS1 -- 5651 04/07/92 07:30 EDT
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Publication:PR Newswire
Date:Apr 7, 1992
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