Debt collectors ringing up sales - Boston Business Journal:

guslyarovalite.blogspot.com
Paul Donatio, district manager at in Lexington, said customerx are not sitting back this year waitinb tocollect debts. “We’re in a record-breakinv year,” said Donatio. With credit card use at an all-tim e high and fallout from the foreclosure crisis pushing the credift market intoa tailspin, more businesses are turning to debt collectors. Market analystws expect collections industry revenue to reacha 10-yeaf high of $14 billion in 2008 and project growth for the next five years. For debt collectors, the economi c environment is fertile. Market research firm IBISWorld Inc. projectsw U.S. collection agency profits will riseby 9.8 percen t year over year in 2008.
IBISWorld lists the collection industry as one of the top 10 performeras ofthe year. U.S. collection agencies will generate total revenu eof $14 billion in 2008, a 4.8 percent increase from 2007. Revenu is expected to increase byanother 3.2 percent in according to a July 2008 report. In 2007, , whicbh employs 30 workers, did $1.1 million in This year Donatio isprojectinf $1.5 million. , among the largest nationwide debtcollection companies, acquireds Transworld in February 2008. Nevertheless, debt collectorsx say they are wary of stellarearningf outlooks, saying it’s harder to collect when pocketzs are empty.
Robert Terrasi, presidentf and CEO of Milford-based Peter Roberts & Associatews Inc., said business is up by 6 percent overlast year. “In this I guess it’s a prettyt decent number,” said The company sends out 40,000 notices per month and employea 25-person staff that works daytime and evening shifts to process collection cycles that typically run 120 days Terrasi said. While the volumee of business has risen since the compan was founded 11years ago, its fees have droppeed from 33 percent of collected debt to the high teenws or low 20s, Terrasi said. “The amount of call and notices is significantly upbecause we’ve grown.
But the marginse are thinner,” said Terrasi. He said collectors end up collectinhg close to the same overall amount in a bad econom because the average sizepayment “Bad debt is everywhere, but you’ree collecting in a tougher economy,” said who added most of the company’s clients are from the medica l industry. Both Terrasi and Donatio expectt growth in healthcare collections. Faced with projections of double-digit heating costs this Donatio also projects a rise in demancd fromits home-heating customerds like the . One-third of Transworldd Lexington’s clients are doctors’ offices, medical groupx and dentists.
Transworld’s customer base has grown by 2,0009 customers since 2004, he said. Despite the upswing, he’xs seeing a decrease in recovery rates. More and more typeds of businesses are looking for collection from hospitals tohardware stores, resulting in a rise in business said Rozanne Andersen, general counsel and executivew vice president of Minneapolis-based collection agency tradre organization ACA International.
The percentage of money recovered is at a slowet pace because consumers are focused oncovering necessities, she