U.S. Collections Agencies:
An Industry Analysis
(February 2006)
--- TABLE OF CONTENTS --
Page
Introduction: Report Scope, Sources of Information,
Methodology 1-4
Executive Overview of Major Findings ($300) 5-20
* Discussion of major
findings, status of the industry, industry structure, nature of the
profession,
major trends affecting collections agencies, industry receipts:
(1987-2004 actual, 2005 est.,
2009 forecast)— major competitors’ mkt.
share, consolidation, collection methods,
recovery rates, debt buying, IRS tax debt,
effect of recessions, mkt. segments,
commercial vs.
consumer accts., new technologies, latest Census ratios, consumer
debt trends/other
demand indicators, other industry analysts’
opinions – highlights of ALL study chapters.
Nature & Status Report of the Industry ($175)
21-36
* Number of agencies in
U.S., profitability, growth, etc.
* Nature &
characteristics of the business: history & development, Census NAICS codes,
how services operate, no. of services
nationwide/recent consolidation/mergers
* Findings/opinion of
First Detroit Corp., Kaulkin Ginsberg,
interviews with large collection
firms
* Collection Techniques:
discussion of “traditional” collection techniques & how agencies
operate (letters, phone calls, legal action,
use of operatives), what methods work best, current
recovery rates, contingency fees, ACA data,
customer specializations
History of Consumer Complaints About Credit Bureaus
& Debt
Collection Services
($150) 37-53
* Discussion of major
complaints about credit files accuracy, privacy issues & poll
results, recent legislation/fines by FTC and
Congress (summary of 1996 Fair Credit
Reporting Act), effect of Internet, Collection
Practices Act defined, 2002 Court of Appeals
actions re information sharing, responses
of trade groups—formation of IRSG
self-regula-
tory group, surveys that detail flaws still
present in credit reporting system and collection
agencies (list of top consumer complaints),
discussion of: “credit repair” firms, credit
insurance.
Major Industry Trends & Factors Affecting Demand ($275) 54-74
* Summary: The growth of consumer debt/trends through
2004: discussion of outstanding
debt, household borrowing, no. of cards,
credit outstanding (Federal Reserve, BEA, consulting
firms data), delinquencies & charge-off
rates, debtor demographics, credit card solicitations
trends, installment debt by type.
* Usage of debit cards
(VISA/MC) - discussion of growth, no. of transactions.
* Bankruptcy trends: personal vs. business, discussion of Chapter 7,
11, 13 types, peak levels
and reasons, regional differences, status of
current bankruptcy legislation, defeated
amendments.
* Major trends affecting the
business - discussion of recent mergers, increased consumer debt,
emergence of
the “debt buying mkt.” ($ size, no. of competitors, trade group),
accelerated
outsourcing of collections by end-users,
Web-based applications, call center advances,
international expansion, status of IRS
outsourcing plans, client consolidation, growth of debt
buying market.
* Challenges facing the
industry: discussion of… competition, effect of recession – is this
industry
recession-proof?
* Findings of latest Kaulkin
Ginsberg research/reports
* Emerging collection
technologies - integration of computer/telecommun. systems, pre-author-
ized draft printing (leading firms, how
service works, software vs. service bureau approaches),
skip tracing, predictive dialing, check
verification & computer databases.
Tables:
* Consumer credit
outstanding and finance rates: 1990 to 2003
* Usage of general purpose
credit cards by families: 1992 to 2001
* Financial debt held by
families by type of debt: 1995 to 2001
* Percent distribution of
amount of debt held by families: 1998 to 2001
* Ratios of debt payments to
family income: 1995 to 2001
* Household debt-service
payments and financial obligations as a percentage of disposable
personal income: 1980 to 2002
* Mortgage debt outstanding
by type of property and holder: 1990 to 2003
* Flow of funds accounts -
financial assets of financial and non-financial institutions by holder
sector : 1990 to 2003
* Flow of funds accounts -
assets of households: 1990 to 2003
* Financial assets held by
families by type of asset: 1995 to 2001
Market Size, Growth, Segments & Forecasts ($250) 75-84
* Demand indicators: 1988-2000 growth in “placements” value (Amer.
Collectors Assn.),
limitations of data, First Detroit Corp.
opinions, how recession-proof is the business?
* Comparison of industry
receipts estimates by U.S. Census Bureau, Kaulkin Ginsberg,
Marketdata
* Estimated value of
consumer, medical, government, communication markets.
Market Size, Growth, Segments & Forecasts (continued)
Page
* 2003-2005
performance/growth/rationale, 2009 forecasts: discussion of growth/reasons
and contributing factors, opinions of
Kaulkin Report, industry competitors, analysts, short
and long-term factors affecting demand and
growth, weighted 2004-2005 sales increase of top
5 competitors.
* Market segments & niches: consumer vs. commercial accounts, estd. share of
industry volume
Table: Industry receipts (1987-2004
Census), Marketdata estimates/projections for 2005
2009 forecasts ($ value, % changes)
Government
Tax Debt: A Status Report ($100)
85-93
* In-depth discussion of
government tax debt, possible huge new market represented by IRS
outsourcing of collections to outside
agencies: tax debt, non-tax debt, child support, Teasury
Dept. & other programs status as of FY
2005, actual collections
* Firms likely to qualify,
objections to outsourcing
Economic Structure & Ratios of Adjustment &
Collection Services ($250) 94-118
* Summary, discussion of:
no. of services, annual receipts (1997 vs. 2002), payroll costs,
avg. receipts per firm/establishment, legal
form of firms, concentration levels for 50 largest
firms, single vs. multi-unit operations,
services by receipts size of firms & individual estabs.,
top 10 states (mkt. potential, $ value of
receipts), avg. receipts per service, by state, industry
composite income statement & balance
sheet measures for 2001-2005.
* 10-year snapshot of the
industry - 1992-2002
Tables:
* Legal format - corporations, partnerships, proprietorships (no. of
estabs., receipts, payroll
as % receipts, avg. receipts (2002, 1997)
* Concentration ratios: largest 4, 8, 20, 50 firms (no. of estabs.,
revenues, as % total industry,
payroll, no. of workers (2002, 1997)
* Single vs. multi-unit firms (1, 2, 3-4, 5-9, 10+ facilities) no.
of firms, estabs., receipts, avg.
receipts, payroll costs (2002, 1997)
* Annual receipts size of FIRMS, measures as
above, 11 sales size classes from $100 mill. to
under $10,000 (2002, 1997)
* Annual receipts size of
individual ESTABLISHMENTS, ratios as
above, 11 classes: $10+
mill. to under $10,000 (2002, 1997)
* State analysis: No. of total adjustment & collection services,
receipts, avg. receipts per
estab., % of national receipts for 50 states
(2002, 1992)
* Estabs. & receipts, by major city (1997)
* Repossession services, by
state (2002)
* Financial Ratios: Composite balance sheet & income
statement of collection services
(2001-2005)
Page
Collection
Agency Competitor Profiles ($250) 119-148
(co. overview & business
description, products, strategies, list of recent acquisitions, operations,
recent developments, financial summary)
-
NCO Group p. 119
-
Outsourcing Solutions Inc. p. 126
-
Encore Capital Group p. 132
-
Asset Acceptance Capital p. 136
-
Intellirisk Management
Corp. p. 139
-
Convergent Resources p. 141
Tables:
* 50 largest firms, by
collection agency placements: 2004
(First Detroit ranking)
* 50 largest collection
agencies, by revenues: 2004 (First
Detroit ranking)
* 50 largest collection firms,
by no. of branch offices: 2004 (First
Detroit ranking)
* Top 25 collection
agencies, ranked by 2002 revenues
(Collections & Credit Risk)
Reference Directory of Industry Information Sources 149-153
* Name/address/phone/key
contacts of credit and collections trade groups, journals,
magazines, directories, federal and state
agencies, etc.