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Here is interesting consumer credit information the creditors and business owners in the collection agency industry would enjoy knowing. With the expansion of consumer credit in October, total outstanding consumer credit in the U.S. now stands at $2.093 trillion.
Debt collection industry tips:
Facts about the U.S. credit economy and consumer credit information:
There are over one billion credit reports issued annually;
Two-thirds of the American economy is driven by consumer spending;
Outstanding consumer credit totals $1.7 trillion;
Credit reporting saves the average person 200 basis points on their mortgage loan;
On average, every U.S. household owns a car and one-third have a second car;
The average American has eight credit cards or loans;
There are 7000 credit card issuers in the U.S. offering more than 27,000 types of payment options.
More debt collection industry tips:
The top 10 collection agencies in 2002 were the following:
1) NCO Group Inc. – Horsham, PA - $703,500,000
2) Outsourcing Solutions Inc. – St. Louis, Missouri - $591,500,000
3) GC Services Ltd. Partnership – Houston, TX - $345,000,000
4) IntelliRisk Management Corp. – Columbus, OH - $338,927,878
5) Risk Management Alternatives Inc. – Duluth, GA - $295,000,000
6) Dun & Bradstreet Receivable Management Services – Bethlehem, PA – 143,600,000
7) AllianceOne Receivables Management Inc. – Exton, PA - $120,000,000
8) Nationwide Credit – Kennesaw, GA - $115,007,534
9) Convergent Resources Inc. – Atlanta, GA - $100,000,000
10) Alegis Group LP – Houston, TX - $71,000,000
Source: Self-Reported data gathered for Collections Source One, Collections & Credit Risk's electronic directory.
Debt collection agencies come in all sizes. However, larger agencies are better able to est up tape-to-tape transfers with their clients and are well situated for dealing with large-volume operations, like banks, hospitals and mortgage companies. It's currently becoming more and more difficult for debtors to hide. Some fascinating collection agency facts include that thanks to highly personalized account files and computer chips imbedded in debit and credit cards, skip-tracing (locating someone who has left town) is not as difficult as it was just a few years ago. However, certain states remain debtor's havens due to their collection laws (like Florida and Texas), so merely finding someone does not guarantee that a payment will be forthcoming. Besides, no matter where a debtor is living, it still may be possible to conceal funds in offshore accounts.
The IRS is close to being able to contract with private collection agencies for delinquent taxes collection and this is expected to be the largest contract opportunity the collection industry has ever seen. The IRS has been authorized to collect on an estimated $250 billion in delinquent taxes and sees $120 billion as potentially collectable. Lawmakers hope that private agencies can bring in $1.4 billion in past due taxes over the next 10 years.
Many collection agencies today are taking a queue from companies like Dell and outsourcing their call centers and activities to near shore and off shore facilities. These facilities might be in locations like India, Canada, Jamaica, the Phillipines. The collection agency industry depends heavily on call centers and fullfillment management including written collateral and letters and by shipping the right kind of business or collection business to the right off shore market.
|Jennifer Mathes, Ph.D.|