- The way in which a consumer pays their bill will change, the movement to payments and in fact lower payments will become the norm.
- The use of offshore and near-shore collection strategies will increase in 2010
- The use of offshore will drive more US agencies to branch out to satellite offices they run in India and the Philippines.
- The use of offshore offices will begin to move to near-shore as the process seems to work but needs closer management. The use of near-shore allows for a 2-4 hour plane ride to the satellite office.
- The results of the best in class agencies and law firms will be ones who can go back to old school collections and manual calls.
- The manual calls will drive the costs up at US locations further driving the off shore strategy
- Compliance issues will only get worse in 2010
- Many agencies and law firms will create a strategy to mitigate the damages associated with the increase of lawsuits filed each month in 2010.
- The volume of consumer attorneys using the collection industry will increase in 2010 as other law firm strategies become un practical and un profitable
- Many new buyers and therefore placers of debt will enter the business in 2010
- Most of these buyers will only be marginally successful and a few will prosper and become part of the industry into 2011 and beyond.
- Many collection agencies and law firms will begin to fail in 2010 and this will create further mergers and acquisitions.
- The M&A that will occur among the debt buyers will allow the buyer to buy the entire company for a discounted price of just the debt assets. This will allow the strong to get stronger.
- The business will also lose many vendors that will not be able to survive the continued hard times in 2010
- Liquidity will increase in 2010 but ever so slowly and will not reach highs of past years ever again.
- The business will shrink as the issuers will reduce the number of buyers they are willing to deal with to reduce the compliance issues that exists in 2010
- The issuers will also reduce the number of agencies and law firms they are dealing with for the same reasons to reduce compliancy issues. By using the most trusted vendors the issuers will reduce exposure to bad collectors.
- This will also happen with the rest of the industry especially the debt buyers and this group will also lose many players ion 2010.
- The limitation of buyers by the issuers will reduce the number of resellers with fresh debt to half of what it was in 2009
Do you want to know how to stay ahead of the curve? Call me today, Phillip W. Duff 904.687.1687.
{ 5 comments… read them below or add one }
Based on your predictions, most companies will not use a consultant, to save money !
Phil,
I must say that I find your emails both interesting and informative. I was unfamiliar with the Six Sigma philosophy prior to being placed on your mailing list and I found those emails to be very intriguing. Old school collections, manual phone calls & “working” every account balance over $500.00 is how my operation has always run. Though I have no immediate desire to enter the debt buying market, I am in a position to offer a solid collection effort on behalf of a debt buyer that may be looking for such assistance.
I run with 10 full time collectors and I operate throughout the Mid-Atlantic region. Our collectors are accustomed to collecting deficiency balances, credit cards, residential lease evictions and similar paper that requires a diligent effort to maximize recovery. I have no interest in having my system flooded with a bunch of old junk paper and I would not want to do business with a buyer that wants to tell me how to run my operation. However, with that said, our staff could effectively cover upwards of 2000 accounts per month and provide a competitive return for someone that has a need for our services. If you come upon a company that might be a good match, feel free to let me know.
Best of luck in 2010.
Carl Succa
President
Commercial Acceptance Company
Fred,
The companies that can spend the funds to rev up their revenue will be the ones who survive and become strong. Any good operator knows that you have to spend money to make money the but your point is valid many companies will not be bale to afford the help.
Phil
Carl,
Thanks for the support.
Phil
Phil,
Great job!! I love your insight and I think you are frigging “dead on.” Not many people “get it,” but you do…110%. Thanks again for all of your information and business insight. You da man!!
Thanks,
Richmond Meyer
Equity Partner
United Debt Holdings, LLC