News Article

Sector Analysis

USA - The Future of Receivables Management

By CreditMan Wednesday, July 9, 2008

Never has the debt collection industry played a more critical role in the economy. The levels of consumer, commercial, and government debts continue to rise, and a growing number of organizations that extend credit have increased their focus on converting delinquent accounts into cash.

The 7th edition of The Kaulkin Report projects that industry revenues will grow from $16.7 billion in 2006 to $22.2 billion in 2011. In the process, ARM companies will create value for clients and investors alike. However, economic and political forces are converging to create serious challenges for the industry. In addition, evolving creditor markets will significantly impact the ARM companies they employ.

Knowledge of these developments is critical in creating successful business strategies. The Kaulkin Report provides this strategic intelligence for ARM company owners, creditors, investors, and vendors to effectively plan for what's to come.

This report includes a comprehensive assessment of the players shaping the future of the industry:
- Consumers
- Creditors
- Contingency Collectors
- Debt Buyers
- First Party Collectors
- Collection Law Firms
- Buyers and Sellers of companies

For more information please click on:

Title Index:

About Kaulkin Ginsberg
Executive Summary

Chapter 1: Consumers
Slowing Growth of U.S. Gross Domestic Product
Historically Low Unemployment
Steadily Rising Consumer Prices
Rising Interest Rates
Charge-off Rates Increasing
Slowing Housing Market
Mortgage Delinquencies Rising, Led by Subprime Market
Consumers Exhibit Hierarchies of Debt Payments
Consistently Increasing Consumer Debt Levels
Revolving Consumer Credit Growing
Non-revolving Consumer Credit Growing More Quickly
Growth Slowing in Home Mortgage Debt
More Household Income Used to Repay Debt
Significant Forecasted Growth in Consumer Credit
Receivables Management Begins and Ends with the Consumer

Chapter 2: Creditors
The Credit Card Industry: A Farewell to Cash
Largest Credit Card Issuers
The Telecommunications Industry: Change at High Speed
Various Services Comprise Industry Revenues
Largest Telecommunications Providers
The Electric Utilities Industry: an Emerging ARM Arena
Largest Electric Utilities
The Healthcare Industry: Collections in Communities
Healthcare Industry is Unusually Diverse
Largest Healthcare Providers
A Growing Need for ARM Services
Government ARM: A Broad Spectrum for Debt Collection
Use of Collection Agencies by the Internal Revenue Service
Increasing Need for State and Municipal Receivables Management
Outlook: Partnerships in Receivables Management

Chapter 3: Regulators
Debtors Utilize Less Complicated Channels for Complaints
Isolated Enforcement Actions Continue in the ARM Industry
States Also Regulate Debt Collection
Overview of ARM-related Federal Legislation
Bankruptcy Reform
Telephone Consumer Protection Act
Consumer Litigation
An Indirect Path to Success

Chapter 4: Contingency Collectors
A $10 Billion Market in 2006
Contingency Collections Defined
Stages of Delinquency
Early-Stage Placements Will Increase in Certain Industries
Later-stage Placements Will Increase from Debt Buyers
Diverse Causes and Solutions to Pricing Pressure
Contingency Collections Onshore, Near-shore, and Perhaps Offshore
Consolidation Among Contingency Agencies Will Continue ..
Contingency Agencies' Fastest Growing Expenses
Investments in Technology Required for Improved Efficiency
Largest Contingency Agencies
Modest Growth Forecasted for Contingency Collectors

Chapter 5: Debt Buyers
Background and History of the Debt Buying Market
$3.7 Billion Debt Buying Market in 2006
Exceedingly High Portfolio Prices Poised to Decrease
Debt Buyers Seek Patient and Affordable Capital
International Debt Buying: Opportunities and Impediments
Global Markets Offer Growth Potential
Obstacles Rule Out Many U.S. Firms
Specialization within Debt Buying Market on the Horizon
Servicing Strategies and Legal Collections
Technology Vital to Debt Buyers' Success
Regulatory Oversight and Tort Reform
Competition to Intensify in the Debt Buying Market
Largest Debt Buyers
Positive Growth Expected for U.S. Debt Buying Market

Chapter 6: First Party Collectors
Background of First Party Collections
Downward Pricing Pressure Challenges First Party Market
Global Economy Encourages Global Presence
Globalization of First Party Services to Continue
ARM Industry Fragmentation Evident in Domestic First Party Companies
Domestic First Party Services Require Specialization
First Party Market Dependent on Technology Solutions
Possibility of Contingency Collections from Nearshore and Offshore Locations
Largest First Party Service Providers
Limited Growth Projected for U.S. First Party Companies
Broader Service Offerings Chart the Future of First Party Collections

Chapter 7: Collection Law Firms
The Business of Collection Law
$1.2 Billion Market in 2006
Downward Pricing Pressure Weighs on Collection Law Firm Market
Varied Sources of Competition for Collection Law Firms
Changing Ages of Paper: Pre-Legal Services on the Rise
Collection Law Firms: A Growing Market
Specialization of the Collection Law Firm Market
Legal Networks Continue to be Employed
A New Approach to Legal Collections: Debt Buying
Compliance Concerns Heightened for Collection Law Firms
Largest Collection Law Firms
Significant Growth Forecasted for Collection Law Firm Market
Developing Corporate Identity Central to Law Firms' Future Success

Chapter 8: Mergers and Acquisitions
Different Types of Buyers and Their Acquisition Criteria
A Recent History of M&A in the ARM Industry
How Sellers are Being Valued in Today's Market
M&A Activity Likely to Recede in Coming Years
M&A Trends Will Develop Within Industry Segments
The Future of Rollups in the ARM Industry
M&A Trends Will Continue to Develop Across Borders
Diversified Service Providers Will Benefit Most from M&A Market
Private Equity Investors Will Continue to Drive M&A Events
Public Markets Will Welcome Few ARM Companies
A Recession Would Slow the M&A Market
M&A Will Remain a Fundamental Growth Strategy in the ARM Industry


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