Debt Collectors

August 10th, 2012

These excerpts were taken from the Debt Collectors article by the CQ Researcher.
By Barbara Mantel
July 20, 2012

The entire industry — third-party collection agencies, debt buyers and law firms in the collection business — “was a boom industry for about 15 years, from around 1993 until 2008 or 2009, driven in large part by the proliferation of credit cards,” says Mike Ginsberg, president and CEO of Kaulkin Ginsberg, an industry adviser in Rockville, Md. But the industry was “hit square in the mouth” by the recession, says Ginsberg, as credit-card loans dried up and more consumers began paying off card balances. Just over 11 percent of total credit-card balances were 90 days or more delinquent in the first quarter of this year, down from about 14 percent in early 2010.

Debt buying has become one of the fastest-growing parts of the collection business, and “it can be much more profitable” than collecting debt on a contingency basis, according to industry adviser Kaulkin Ginsberg. Debt buyers purchase portfolios of older debt for cents on the dollar, then collect what they can — sometimes “up to three times or more of the original purchase price,” Kaulkin Ginsberg said.

“At the end of the day, if the bank is not providing the kind of documentation that is needed in the original sale, it’s not going to be available later on,” says industry adviser Mike Ginsberg. “That’s where the regulation needs to be.” ACA International wants the federal Truth in Lending Act amended to require original creditors to maintain consumer account information for at least seven years after a debt is written off.

With installment credit came delinquencies, and small collection agencies proliferated in the 1920s and ’30s. Debt collectors, usually with just a few clients and employees, used phone and mail to reach debtors and if necessary made personal visits, becoming known as “door knockers,” according to Kaulkin Ginsberg, the industry adviser. Collectors kept hand-written records on index cards.

The full article can be found on the CQ Researcher website.

 

Comments are closed.

LATEST BLOGS

Family Vacations: A Time to Unplug from the Digital World

August 17, 2017

As I approach the half century mark, I find myself appreciating family vacations more than ever before. Last week, we went on an Alaskan cruise in which internet access was not provided unless the passenger paid separately for it. I quickly learned how precious family vacation has become. Were you able to pull yourself away from the internet on your family vacation this year?....

» see this post    » all posts


Large Healthcare Market Participants Continue to Endure

August 15, 2017

As part of our KG Prime market intelligence series, we recently examined and retrieved data from the largest players in the U.S. healthcare market. After doing so, we suggested various takeaways for the ARM and RCM industries based on company-specific and market-wide data. ....

» see this post    » all posts


Earn-outs: A Necessary Evil in Business Transactions or a Valuation Bridge between Buyers and Sellers?

August 10, 2017

Most business owners who are contemplating the sale of their business tell us they are vehemently opposed to a transaction structure that includes an earn-out component. When asked why, the typical answer they give is that earn-outs never materialize. So, why do earn-outs exist?....

» see this post    » all posts


RECENT ANNOUNCEMENTS

Kaulkin Ginsberg Announces the Acquisition of Remit Corporation by Eastern Revenue

August 17, 2017

Kaulkin Ginsberg Company announced today the acquisition of Remit Corporation, a well-established regional collection agency founded by Harry Strausser III, and based in Bloomsburg, Pennsylvania, by Eastern Revenue, Inc.....

» see more




Mike Ginsberg to Discuss Trending Topics at ARM Events this Fall

August 15, 2017

Join Mike Ginsberg at the Debt Connection Symposium and the Receivables Management Conference this fall as he discusses important issues surrounding the ARM industry.....

» see more




Kaulkin Ginsberg Moves Its Market Intelligence Online

June 8, 2017

Kaulkin Ginsberg is changing the way busy owners, executives, and senior leaders access strategic market intelligence with the launch of KG Prime. KG Prime is a comprehensive and easy to use web-based service that provides users with economic, market segment, and other forms of strategic research.....

» see more