Security Holdings Sells its Security Check Collections Division

A Midwestern private equity fund recently bought Oxford, Mississippi-based Security Check, the check collections subsidiary of Security Holdings, LLC, for an undisclosed price, according to a report in the local paper Clarksville Press Register. Company officials were not available for comment.

According to the Press Register, Security Check was the nation’s fourth-largest check collection company prior to the transaction. Oxford employees aren’t expected to be affected.

Security Check began in 1995 when the current owners started collecting bad checks for Oxford businesses part time, according to the Press Register. Soon they were collecting payments on insufficient funds checks full time, nationwide. Since then, the company grew to include 200 employees and 25,000 client locations across the United States.

The Press Register added that Security Check acquired payment solutions companies in other regions and expanded its footprint to grow quickly and lucratively, operating with very little debt. As it grew, the company successfully diversified into other financial services: debt collection and credit card processing.

According to the company’s Web site, Security Credit Services recently raised more than $20 million from investors to purchase and collect bad debt. In late April, the company announced that it had hired debt purchasing industry veteran Henry Ostoja to head up its internal and outsourced collection agency network ("Executive Change: Henry J. Ostoja joins Security Credit Services," April 29).

Security Credit Services purchases portfolios of bad debt from banks on behalf of its investors and seeks resolution to delinquent accounts through “sensitive, persistent and polite collection practices.” Security Credit Services now purchases and collects more than $800 million of bad debt.