As an AR Factor specializing in construction, one of the biggest risks is non-payment to the general contractors and sub-contractors once work has been completed. You may expect such risk from smaller companies...but not from one of our country's largest banks!
Bank of America Field Services issued a memo last October informing its contractors there would be "delays in payment". The memo goes on to say that these delays were due to a computer issue where B of A has lost millions of photos...photos taken by said contractors to provide proof that assigned work had been completed. As a result, Bank of America chose to not pay its contractors. These unpaid invoices are in the millions.
This not only affects the contractors, but the sub-contractors employed to perform much of the work as well. According to sources close to this, several of these companies have been forced into bankruptcy...forced to liquidate assets...even some who lost everything and found themselves homeless.
It is ironic. Foreclosure has ruined millions of American's lives...yet Bank of America has a thrived taking in tens of thousands of foreclosed homes across the country. One person interviewed, Robert McDonald, has his home mortgage with B of A and has not been able to pay it because Bank of America wouldn't pay him.
*Reported by Byron Harris - WFAA, June 21st, 2010.
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