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U.S. Collections Agencies: An Industry Analysis

Product Type: Market Research Report
Published by: Marketdata Enterprises Inc.
Published: February 2006
Product Code: R237-212
Description
A major source of public information about any industry or market analyzed by Marketdata is the U.S. Government--the most prolific producer of business information in the world. The NAICS (North American Industrial Classification System) --formerly: Standard Industrial Classification or SIC codes System) was created to allow for the uniform collection and analysis of economic, marketing and financial statistics about all sectors of the U.S. economy. A 6-digit numerical code is assigned to each industry.

This system works so well that the private sector has embraced it as well. Mail list houses use it, as well as credit bureaus and financial directory publishers such as Standard & Poor's, Dun & Bradstreet, TRW, Robert Morris Associates, and others.

For this report, the U.S. Census Bureau's 1992, 1997 and 2002 Census of Service Industries were used. This detailed survey provided data about the value of adjustment and collections services' annual receipts, number of facilities, payroll costs, top firms' share of the market, and more---by size of the company and their facilities, for the total nation and for specific states and cities.
Table of Contents
Introduction: Report Scope, Sources of Information, Methodology


Executive Overview of Major Findings

* 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

* 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

* 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

* 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

* 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.

* 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

* 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

* 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)


Collection Agency Competitor Profiles

(co. overview & business description, products, strategies, list of recent acquisitions, operations, recent developments, financial summary)

- NCO Group

- Outsourcing Solutions Inc.

- Encore Capital Group

- Asset Acceptance Capital

- Intellirisk Management Corp.

- Convergent Resources


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

* Name/address/phone/key contacts of credit and collections trade groups, journals, magazines, directories, federal and state agencies, etc.
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