Industry Analysis & Industry Trends
After a rising tide of debt swamped the economy, collectability rates fell, canceling out the spike in debt collection opportunities and hurting revenue. However, the economy is set to recover over the next five years, with improving debt recovery rates, declining unemployment and higher housing prices. As a result, debt collection agencies will experience renewed demand, resulting in modest revenue growth... purchase to read more
Industry Report - Industry Products Chapter
Contingent-fee servicing is forecast to generate 52.0% 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