|Last Quarterly Update:||11/28/2016|
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Companies in this industry collect payments for claims on behalf of their clients. Major companies include Encore Capital Group, GC Services, iQor, NCO Group, Portfolio Recovery Associates, and STA International (all based in the US) as well as First Collect International (UK) and NTT Finance (Japan).
Worldwide, demand for collection services can be driven both by economic weakness, as consumers are challenged to repay debt, and economic strength, as the volume of transactions involving credit increases. Troubled economic conditions in the European Union and emerging markets in Asia are contributing to industry growth. The rise in cross-border transactions can also drive demand for debt collection services.
The US collections industry consists of about 4,500 establishments (single-location companies and units of multi-location companies) with annual revenue of about $12 billion.
Demand for collections services is driven by the volume of financial transactions and by the health of the economy. The profitability of individual companies depends largely on efficiency of operations. Large companies enjoy economies of scale in their ability to buy receivables portfolios. Small companies can compete successfully by providing superior customer service. The US industry is fragmented: the 50 largest companies account for about 45% of revenue.
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Money owed to health care providers (hospitals, physician groups and clinics) is the leading category of debt handled by collection agencies, accounting for nearly 40% of all debt collected in the industry, according ...
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