Collection Agency Facts - Statistics and facts for the collections industry
• The $2.3 billion recovered by third-party collection agencies on purchased accounts in 2005 represented 19 percent of total receipts in the industry. (Source: Value of Third–Party Debt Collection to the U.S. Economy: Survey and Analysis, PricewaterhouseCoopers, June 2006.)
• Over $110 billion in face value of debt was purchased in the United States in 2005. The global debt buying market was estimated at $158 billion. (Source: “Welcome to a New World of Debt,” Collections & Credit Risk, pg. 26, Vol. 11, No. 5, May 2006.)
• The vast majority of purchased debt has been charged-off credit card receivables—accounting for 90 percent of the face value of debt purchased in 2005. But as the debt purchasing market matures, it is increasingly common for companies such as telecommunications providers, hospitals, physician groups and other businesses to sell their nonperforming accounts. (Source: “Welcome to a New World of Debt,” Collections & Credit Risk, pg. 26, Vol. 11, No. 5, May 2006.)
• Asset buyers are considered “debt collectors” under the definition established in the Fair Debt Collection Practices Act (FDCPA), the primary federal law regulating third–party collection agencies. The FDCPA, enacted in 1977 with the support of ACA, is designed to help protect consumers from unfair and abusive collection practices. (Source: “Federal and State Law Issues for Debt Purchasers,” ACA International FastFax Document.)
• State law determines how long a debt is legally enforceable. An “out-of-statute” or “time-barred” debt is one the holder may no longer recover by suing in court. The length of the statute varies by state, generally ranging from three years to 10. The debt does not go away after a statute has expired, and (except in Wisconsin and Mississippi) the law allows a collector to request payment on a time–barred debt. (Source: “Time–Barred Debts,” Federal Trade Commission Consumer Alert, October 2004.)