Industry Analysis & Industry Trends
Performance in the Debt Collection Agencies industry is largely driven by the overall availability of collection opportunities (i.e. the number of defaulted accounts that an agency services). Growth in the industry over the past five years is the result of increased opportunities resulting from high delinquency levels at the start of the period. In the coming years, increases in collection rates and outstanding credit are expected to drive growth... purchase to read more
Industry Report - Industry Products Chapter
Contingent-fee servicing is forecast to generate 54.5% of industry revenue and is the most widely used method for recovering income on nonperforming or delinquent debt accounts. Under the system, creditors write off loans or place them with collection agencies after accounts are deemed uncollectible. Then, collection agencies are paid a fee calculated as a percentage of the amount of debt recovered on these uncollectible accounts.
Receivables are generally valued on the creditor's balance sheet at a discount, with reserves established to hedge against the possibility of non-collection. The commission rate for contingent-fee services is generally based on the degree of collection difficulty... purchase to read more