Debtor's delight: While aggregate household debt continues to climb, government regulations will stifle revenue

Over the five years to 2018, revenue for the Debt Collection Agencies industry is expected to contract due to tightening regulations from the Consumer Financial Protection Bureau. For the first two years of the period, consumers continued deleveraging as they had in the immediate wake of the recession. From 2015 onward, although households began to readily assume debt, industry revenue continued to decline. This is partly attributed to more stringent supervision from the Consumer Financial Protection Bureau and lower debt recovery rates. Regulation is expected to tighten further over the five years to 2023, and, as a result, industry revenue is projected to continue to decline...purchase to read more.

Industry Statistics & Market Size
Revenue
$12bn
Annual Growth 13-18
-2.4%
Forecast Growth 18-23
Profit
Employment
126,010
Businesses
8,941

Industry Threats & Opportunities

  • Industry revenue is expected to contract as regulations continue to mount
  • Consumers tightened budgets in response to salary cuts, layoffs and an uncertain financial future
  • As customers consolidate, the need for larger debt agencies grows
  • Industry Report - Industry Products Chapter

    Contingency collection servicesContingency collection services generate the largest share of industry revenue, as it is the most widely used method for recovering income on nonperforming or delinquent debt accounts. Multiple methods are used to contract the owners of these delinquent accounts, including email, letters, telephone calling among others. Overall, this segment is expected to account for 86.1% of industry revenue, with the bulk of the segment coming from written correspondence. 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...purchase to read more.

    Additional Insights for the Debt Collection Agencies Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Debt Collection Agencies Industry are

  • Maintenance of excellent customer relations
  • Highly trained workforce
  • Having a high prior success rate (including completed prior contracts)
  • IBISWorld analysts also discuss how external factors such as Aggregate household debt and Outsourcing to the Debt Collection Agencies industry in the Debt Collection Agencies industry impact industry performance..

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    What's in this report

    What is the Debt Collection Agencies Industry?

    The Debt Collection Agencies industry comprises businesses that pursue payments on debts owed by individuals and businesses. Most collection agencies operate as agents of creditors and render their services for a fee or percentage of the total amount owed. Other agencies purchase debt portfolios from creditors at a discount and then pursue outstanding balances for their own gain.

    Industry Products
  • Contingency collections services by letter and email
  • Other contingency collections services
  • Early-out receivables services
  • Portfolio acquisition
  • Industry Activities
  • Account collection services
  • Bill collection services
  • Debt collection services
  • Delinquent account collection services
  • Tax collection services on a contract or fee basis
  • Collection on debt portfolios
  • Repossession services
  • Credit reporting services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Aggregate household debt
  • Outsourcing to the Debt Collection Agencies industry
  • Per capita disposable income
  • Yield on 10-year Treasury note

  • Current Performance
  • Consumer debt
  • Regulations begin to take their toll
  • Chart: Revenue Growth

  • Industry Outlook
  • Consumer credit
  • Mergers and acquisitions
  • Technology and profit
  • Table: Debt Collection Agencies Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Debt Collection Agencies Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Credit Card Issuing
  • Real Estate Loans & Collateralized Debt
  • Apartment Rental
  • Healthcare and Social Assistance

  • Key Selling Industries
  • Credit Bureaus & Rating Agencies
  • Credit Card Issuing
  • Real Estate Loans & Collateralized Debt

  • Products & Services
  • Other contingency collections services
  • Contingency collections services by letter and email
  • Early-out receivables services
  • Other
  • Portfolio acquisition
  • Chart: Debt Collection Agencies Industry Products and Services Segmentation

  • Demand Determinants
  • Economic growth
  • Interest rates
  • Desire to reduce operating expenses
  • Disposable income

  • Major Markets
  • Healthcare
  • Government agencies
  • Telecommunications and utility
  • Financial services
  • Other
  • Retail
  • Chart: Major Market Segmentation for the Debt Collection Agencies Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitWagesPurchasesDepreciation and marketingOther expenses
  • Chart: Cost Structure Benchmarking – Sector vs Debt Collection Agencies

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Debt Collection Agencies Industry

  • Industry Globalization
    Alorica Inc., Encore Capital Group Inc.,
  • Table: Alorica Inc. - financial performance
  • Table: Encore Capital Group Inc. - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Debt Collection Agencies Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Debt Collection Agencies Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Aggregate Household Debt (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Accounts Receivable
  • Money owed to a company for goods or services it has sold.
  • Collectivity Rate
  • Also known as a recovery rate, this rate is calculated by subtracting recovered income from total outstanding debt. The higher the rate, the greater percentage of income recovered.
  • Nonrevolving Credit
  • Credit unable to be used after payment, including auto, home and student loans.
  • Primary Placement
  • An account that is typically 90 to 270 days past due and has the highest recovery rates and lowest commissions.
  • Revolving Credit
  • Credit lacking a fixed number of payments that can also be used again after payment, such as credit cards.
  • Secondary Placement
  • An account generally 270 to 360 days past due and has already been recalled from a primary collection agency.
  • Skip Tracing
  • Collection work associated with collecting information that will assist collectors in locating delinquent debtors.
  • Tertiary Placement
  • An account 360 days past due, which has the lowest recovery rates and highest commissions. It has generally been recalled from one or more collection agencies.
  • What Our Customers Say

    Why buy this report?

    The Debt Collection Agencies industry market report contains strategic analysis of the key drivers influencing the industry. Save hours of time on research and prospecting using IBISWorld’s standardized, up-to-date reports on thousands of industries. Our industry research provides growth and profit forecasts for a five-year outlook period, presented in a clear and user-friendly format.

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    This report on Debt Collection Agencies:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Debt Collection Agencies market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Debt Collection Agencies, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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