Collections Information

• More than 6,500 collection agencies and 1,600 credit reporting agencies service an estimated $135 billion in delinquent consumer debt placed for collection in 2000. This is nearly double the $73 billion placed for collection in 1990. (Source: The Kaulkin Report, August 2001)

• The average amount of new business placed for collections in 2002 was $136,303,260 and the average recovery rate was 18-percent. (Source: ACA International's 2003 Benchmarking/Cost of Operations Survey)

• The debt collection market generates approximately $13 billion in revenues for United States companies. (Source: The Kaulkin Report, August 2001)

• The collection industry saves the average American family of four $331 a year. This represents money they would have spent in increased cost of goods and services, if businesses raised their prices to cover their losses to bad debt instead of recovering the revenue through a collection agency. (Source: ACA International, May 2004)

• The healthcare industry is the largest source of collection agency business, with 76% of agencies participating in the collection of healthcare accounts. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

• Collection agencies are vital to the financial stability of hospitals across the U.S. According to Hospital Accounts Receivable Analysis (HARA), hospitals nationwide wrote off an average 5.1 percent of their revenue to bad debt and charity care from 2002 to 2003. This loss is greater than the average operating margin for hospitals industry-wide (4.5 percent), according to the American Hospital Association. And it is over seven times greater than the razor-thin 0.7 percent average margin for members of the National Association of Public Hospitals and Health Systems (NAPH), who serve a disproportionate number of low-income and uninsured patients.

• The Bureau of Labor Statistics estimates employment in the collection industry will increase 21-35 percent between 2000 and 2010. (Source: Bureau of Labor Statistics, Occupational Outlook Handbook)

• The Fair Debt Collection Practices Act (FDCPA), the federal law regulating third-party collection agencies, which was enacted in 1977 with the support of ACA, is designed to help protect consumers from unfair and abusive collection practices. (Source: A Guide to the Fair Debt Collection Practices Act)

• The average number of phone calls a typical collector attempts per hour is 20. A typical collector will reach six debtors in an hour with at least two promises. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

• ACA member agencies make nearly 87 million consumer contacts a month, which is over 1 billion contacts per year. (Source: an ACA International study conducted by Ernst & Young, August 1999.)

• The average annual turnover rate for collectors was less than 10-percent in 2001. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

• The average collection agency employed 19 collectors and 10 other full-time staff members in 2003. (Source: ACA International's 2004 Benchmarking/Cost of Operations Survey)

• Historically, firms employ more female collectors than they do male collectors, although the gap is narrowing. The proportion of male to female was 1 to 3 in 1999 and it is currently 2 to 3. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

• 60% of collection agencies employ one or more bilingual collectors. The most common language other than English is Spanish, followed by French and German. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

• Employee compensation accounts for nearly half (46.68%) of the total expenses at the average collection agency. (Source: ACA International's 2004 Benchmarking/Cost of Operations Survey)

• The average annual base salary for a collector is $22,487 with an average commission rate of 12-percent - totaling $31,812. (Source: ACA International's 2002 Compensation & Collection Agency Operations Study)

ACA International has complied this information from a variety of industry sources in response to frequent questions regarding the credit and collection industry. All sources are cited and every effort has been made to assure that the information is correct. For more information, contact ACA's public relations specialist at (952) 928-8000 ext. 714 or pr@acainternational.org

THIS INFORMATION IS NOT INTENDED AS LEGAL ADVICE AND MAY NOT BE USED AS LEGAL ADVICE. IT SHOULD NOT BE USED TO REPLACE THE ADVICE OF YOUR OWN LEGAL COUNSEL. ANY INFORMATION CONTAINED IN THIS MATERIAL IS BASED ON CURRENT RESEARCH INTO THE ISSUES AND ON THE SPECIFIC FACTS INVOLVED HEREIN.