Survey Shows Tough Times But Rosier Outlook for Collectors

The final results of insideARM’s Confidence Survey have been compiled. Thanks to all who participated. We had more than 320 total responses from the accounts receivable management industry, including debt collection agencies, credit issuers and vendors to the industry.

It’s clear that ARM professionals are worried about the state of the economy as it relates to collection rates and consumers’ ability to repay debts. But the majority of respondents appeared to think the worst is behind us and the future holds great opportunity.

Below are the results of the collection agency survey. Please note that the percentages are based the responses that were self-identified as “collection agencies.” Please be sure to check the Inside Card & Creditor Receivables and Inside Healthcare Receivables publications, due to later this month, for the results for creditors and healthcare receivables professionals.

The first question attempted to gauge which common consumer spending inputs will most impact the collectability of debts. Clearly, collection agency professionals are most concerned with the rise in the cost of food and fuel. That was the only factor where a majority of respondents — 53.7 percent — indicated a “Major Effect” would be felt. Combined with the response “Some Effect,” 91.6 percent said this factor would have an impact on collections, the highest of any factor. Consumer debt levels also seem to be on collectors’ minds, with a combined 86.5 percent saying debt levels have “Some” or a “Major” effect on their business.

In the second question, we wanted to get a feel for how companies think they are doing right now and how they think the business climate will change in six months and in 12 months. A typically-upbeat group on questions of company performance, collectors told us that things are not exactly great right now. While the most common answer to the performance rating questions was “Strong” at 38.9 percent, a combined 17.2 percent of respondents rated their company’s current performance as “Poor” or “Weak,” with another 38 percent giving the “Average” rating. Only 6 percent said current performance was “Excellent.” But looking to the future, the numbers slide into the more positive range, with a combined 51.2 percent predicting “Strong” or “Excellent” performance in six months and 61.9 percent predicting the same for 12 months from now.