Debt collectors ringing up sales - Boston Business Journal:

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Paul Donatio, district manager at in Lexington, said customerxs are not sitting back this year waitintg tocollect debts. “We’re in a record-breaking year,” said Donatio. With creditr card use at an all-time high and fallouf from the foreclosure crisis pushing the credity market intoa tailspin, more businesses are turning to debt Market analysts expect collections industry revenue to reach a 10-yea high of $14 billion in 2008 and projectf growth for the next five years. For debt the economic environmentis fertile. Market research firm IBISWorld Inc. projects U.S. collection agency profitss will riseby 9.8 percent year over year in 2008.
IBISWorlf lists the collection industry as one of the top 10 performerx ofthe year. U.S. collection agencies will generate total revenueof $14 billion in a 4.8 percent increase from 2007. Revenure is expected to increasre byanother 3.2 percent in according to a July 2008 report. In 2007, , which employ 30 workers, did $1.1 million in This year Donatio isprojecting $1.5 million. , among the largesft nationwide debtcollection companies, acquired Transworld in Februaryt 2008. Nevertheless, debt collectors say they are wary of stella rearning outlooks, saying it’s harderf to collect when pockets are empty.
Robertf Terrasi, president and CEO of Milford-basef Peter Roberts & Associates said business is up by 6 percent overlast “In this economy, I guess it’s a prett decent number,” said Terrasi. The company sends out 40,0009 notices per month and employsa 25-person staff that workws daytime and evening shifts to procesas collection cycles that typically run 120 days Terrasi said. While the volume of business has risen sinced the company was founded 11years ago, its fees have droppec from 33 percent of collectedx debt to the high teens or low 20s, Terrasoi said.
“The amount of calls and noticez is significantly upbecause we’ve But the margins are thinner,” said He said collectors end up collecting close to the same overall amouny in a bad economy because the average size payment “Bad debt is everywhere, but you’re collecting in a tougheer economy,” said Terrasi, who added most of the company’sx clients are from the medicao industry. Both Terrasi and Donati expect growth in healthcare collections. Faced with projectionzs of double-digit heating costs this winter, Donatio also projects a rise in demanr fromits home-heating customers like the .
One-thirfd of Transworld Lexington’s clients are offices, medical groups and dentists. Transworld’s customer base has growjn by 2,000 customers since 2004, he said. Despite the upswing, he’sx seeing a decrease in recoveru rates. More and more types of businesses are lookingy forcollection services, from hospitals to hardwarde stores, resulting in a rise in business volume, said Rozanne Andersen, generalp counsel and executive vice presiden t of Minneapolis-based collection agenchy trade organization ACA International. The percentage of money recoverer is at a slower pace because consumers are focusec oncovering necessities, she said.