Debt Collection Booming Business

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WASHINGTON — In the often murky waters of the debt collection industry, United Recovery Systems in Houston is considered a “whale hunter.”

In its search for clients, United isn’t looking for mom-and-pop businesses with a few hundred deadbeat customers. It wants bigger fish.

Its client roster includes national banks, international credit card issuers and domestic and foreign auto finance giants, each of whom count on United to make good on their bad accounts.

In the current economic climate, the “whales” are virtually jumping out of the water and into United’s boat. The company is taking in $937 million a month in new accounts, compared with about $550 million a month last year, said United’s marketing director, Sean Keegan.

After beginning the year with 1,200 debt collectors, United has added 300 and will add another 300 by year’s end.

“The volume was so huge that we had to run out and hire collectors,” Keegan said. “I can’t put 5,000 accounts in this guy’s file box for him to work this month. I have to go hire new people.”

United’s growth spurt isn’t an aberration. Across the country, dozens of established collection agencies are expanding their operations and hiring collectors, managers and support staff to keep up with the rising tide of bad debt due to massive job losses.

As real estate values fall, homeowners can no longer tap their home equity to pay down debt. So antsy creditors are farming out more problem accounts to collectors after declaring them as charge-offs, or losses.

With billions of dollars outstanding on millions of past due accounts, creditors want their money now and collection agencies with a track record of success are cashing in. READ MORE

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