A monthly collections industry index showed an 11% decline in March driven by steep sequential declines among accounts with larger account balances. The sharp reversal may be linked to higher interest rates, sub-prime mortgage defaults, and ARM resets which are influencing payments. The SunTrust Robinson Humphrey “Settlement-in-Full Index” reports its metric dropped to 72.5% in March, compared to 81.5% in February and 69.7% one-year ago. Settlements/payments under $500 decreased 3% year-over-year in March as settlements/payments between $500 and $1,000 increased 4%; settlements/payments between $1,000 and $3,000 decreased 0.4%; and settlements/payments from $3,000 to $7,000 were up 22%. The “SIFI” is a proprietary monthly research tool that measures the success of collections agencies in collecting bad debts that they have purchased. The data are based on five agencies including Arrow Financial Services, Oliphant Financial Corporation, Phoenix Credit Solutions, and Zenith Acquisition.
pre.
SIFI COMPOSITE
(not seasonally adjusted)
Mar 06: 69.7%
Jan 07: 77.1%
Feb 07: 81.5%
Mar 07: 72.5%
Source: SunTrust Robinson Humphrey
