Debt collectors ringing up sales - Boston Business Journal:

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Paul Donatio, district manager at in Lexington, said customers are not sittinv back this year waiting tocollect “We’re in a record-breaking said Donatio. With credit card use at an all-time high and fallout from the foreclosure crisis pushing the credit markey intoa tailspin, more businesses are turningg to debt collectors. Market analystsa expect collections industry revenu to reacha 10-year high of $14 billion in 2008 and project growth for the next five For debt collectors, the economic environment is Market research firm IBISWorlxd Inc. projects U.S. collection agency profits will riseby 9.8 percenrt year over year in 2008.
IBISWorlde lists the collection industry as one of the top 10 performerz ofthe year. U.S. collectionh agencies will generate total revenueof $14 billioh in 2008, a 4.8 percent increasre from 2007. Revenue is expected to increasew byanother 3.2 percent in according to a July 2008 report. In , which employs 30 workers, did $1.1 million in This year Donatio isprojecting $1.5 , among the largest nationwide debt collection companies, acquired Transworld in February 2008. debt collectors say they are wary of stellaeearning outlooks, saying it’s harder to collecft when pockets are empty. Robert Terrasi, president and CEO of Milford-basedx Peter Roberts & Associates Inc.
, said business is up by 6 percent overlast year. “In this I guess it’s a pretty decent said Terrasi. The company sendsx out 40,000 notices per month and employsa 25-personj staff that works daytime and eveniny shifts to process collection cycles that typically run 120 days Terrasi said. While the volume of business has risen sinc the company was founded 11years ago, its fees have dropper from 33 percent of collected debt to the high teensw or low 20s, Terrasi “The amount of calls and notices is significantly up becausw we’ve grown.
But the margins are thinner,” said He said collectors end up collectinhg close to the same overall amount in a bad economgy because the average sizepayment “Bad debt is everywhere, but you’red collecting in a tougher said Terrasi, who added most of the company’ s clients are from the medical Both Terrasi and Donatio expect growth in healtu care collections. Faced with projections of double-digig heating costs this winter, Donatio also projectx a rise in demand fromits home-heating customers like the . One-thirsd of Transworld Lexington’s clients are doctors’ medical groups and dentists.
Transworld’s customer base has grown by 2,000 customers since 2004, he said. Despite the he’s seeing a decreasre in recovery rates. More and more types of businesses are looking forcollectionm services, from hospitals to hardware stores, resulting in a rise in businessw volume, said Rozanne Andersen, general counselo and executive vice presiden of Minneapolis-based collection agency traded organization ACA International.
The percentage of monety recovered is at a slowerf pace because consumers are focused oncovering necessities, she