The Consumer Financial Protection Bureau nailed of the nation’s two largest debt buyers and collectors for using deceptive tactics to collect bad debts. The Bureau found that Encore Capital Group and Portfolio Recovery Associates (PRA) bought debts that were potentially inaccurate, lacking documentation, or unenforceable.
“In addition to rising card portfolio deal prices, the most interesting thing about card market now,” notes R.K. Hammer, “is that the rising deal flow has for the second year in a row cut favorably across all card segments: prime/super prime deals, subprime, private label, and prepaid card portfolios – all stand to benefit again…
As reported earlier, card portfolio sales activity for 2012 saw a large jump from recent years, noted industry expert, R.K. Hammer-Card Knowledge Factory®. A number of factors have contributed to that activity, stated company Founder and CEO, Bob Hammer. “In addition to rising deal prices, the most interesting thing about card market sentiment now,” notes…
Card portfolio sales activity estimated for 2012 will see a large jump from recent years, predicts industry expert, R.K. Hammer-Card Knowledge Factory™. A number of factors have contributed to that belief, stated company Founder and CEO, Bob Hammer. “The most interesting thing about market and deal sentiment now,” notes Hammer, “is that it appears the…
Discover posted 2Q/11 net income of $600 million, compared to $258 million the year ago quarter. This was thanks in part to card sales volume experiencing year-over-year growth of 9% with $25 billion in volume in the quarter; total loans having increased 5% from the prior year to $52.5 billion, while credit card loans declined 1%; credit card loan balances having grown $644 million, or 1% from the prior quarter; and the delinquency rate for credit card loans over 30 days past due having reached a 25-year record low of 2.79% and the credit card net charge-off rate declined to 5.01%. Meanwhile, Payment Services saw pretax income of $43 million, up 19% from the prior year, and transaction volume for the segment was $46 billion in the quarter, up 24% from the prior year.
Net interest income increased $46 million from the prior year due in part to increased loan balances related to the student loan acquisition and lower funding related costs while delinquency rate on credit card loans over 30 days past due reached an all-time low of 2.79%. The credit card net charge-off rate decreased to 5.01% for the second quarter of 2011, down 355 basis points from the prior year and 95 basis points from the prior quarter and the provision for loan losses of $176 million decreased $548 million by 76% year-over-year thanks to lower charge-offs. Principal charge-offs decreased $424 million from the prior year. Payment Services dollar volume was a record $45.9 billion for the second quarter, up 24% from the prior year, driven by higher PULSE issuer volume, which experienced transactions up 25%.
Global Debt Registry (GDR) is now included on Visa’s list of PCI DSS compliant Service Providers thanks to its commitment to the very highest industry standards for protecting confidential consumer data throughout the securitization and receivable lifecycle management process. Global Debt Registry delivers significant consumer protections as well as measurable ROI benefits to all participants in the Accounts Receivable Industry by providing the nation’s only proven, patent-pending AR titling solution. GDR maintains the integrity of traded data and documentation (validates debt); maintains accurate ownership (account-level chain of title); and provides automated access for media lifecycle management.
FICO analytics and decision management technology has released its “PlacementsPlus” service 6.0 collections agency management service. The FICO “PlacementsPlus 6.0” includes enhanced analytics and more sophisticated reporting tools for optimized operational results and increased debt recovery. The service ultimately gives creditors new tools to optimize the distribution of their debt among collections agencies, matching specific debt attributes with the agencies best suited to that type of debt. The service also now enables creditors to set multiple and customized debt recovery thresholds and to track and evaluate progress and adjust as needed.
Debt collector Encore Capital Group reports gross collections were $141.3 million, a 23% increase over the $115.2
million in the same period of the prior year.
Investment in receivable portfolios was $81.6 million, to purchase $2.1
billion in face value of debt, compared to $55.9 million, to purchase
$1.3 billion in face value of debt in the same period of the prior year.
Available capacity under the revolving credit facility, subject to
borrowing base and applicable debt covenants, was $54.5 million as of
March 31, 2010. Total debt, consisting of the revolving credit facility,
convertible senior notes and capital lease obligations, was $318.0
million as of March 31, 2010, an increase from $303.1 million as of
December 31, 2009. Revenue from receivable portfolios was $82.9 million, a 15% increase
over the $72.3 million in the same period of the prior year. Revenue
recognized on receivable portfolios, as a percentage of portfolio
collections, excluding the effects of net portfolio allowances, was 64%,
compared to 67% in the same period of the prior year.
Revenue from bankruptcy servicing was $4.4 million, a 6% increase over
the $4.1 million in the same period of the prior year.
Total operating expenses were $65.6 million, a 9% increase over the
$60.2 million in the same period of the prior year. Operating expense
(excluding stock-based compensation expense and bankruptcy servicing
operating expenses) per dollar collected decreased to 42.9% compared to
48.3% in the same period of the prior year.
For more details on Encore
Capital’s first quarter performance visit CardData (www.carddata.com).
Reid E. Simpson has been appointed SVP and CEO, Asset Acceptance Capital, effective May 17, 2010. Simpson was most recently the CFO, Aircell in-flight mobile broadband services. Reid was also the CFO of eCollege.com, CFO of CCC Information Services, an advanced software, communication systems, internet and wireless-enabled technology solutions to the automobile claims and collision repair industries. Prior to this he held CFO positions at Dun & Bradstreet Plan Services (from 1988 to 1991), Nielsen Marketing Research (from 1991 to 1993) and DonTech (1993 to 1997).
As a reflection of the slowly recovering economy, debt collector Encore Capital Group posted a 32% increase in gross collections for the fourth quarter of $124.5 million, compared to a 29% increase to $125.7 million in the previous quarter. This is a 34% increase over the 92.8 million posted the year ago period, while net income was $33.0 million, compared to $9.0 million last quarter and $13.8 million in 2008. Total interest expense was $4.0 million, compared to $5.4 million in the same period of the prior year; Net income was $8.4 million compared to a net loss of $2.1 million during the corresponding quarter last year. For the 2009 fiscal year, Gross collections were $487.8 million, a 22% increase over the $398.6 million in 2008; total revenue was $316.4 million, a 24% increase over the $255.9 million in 2008; total operating expenses were $249.8 million, a 15% increase over the $216.9 million in 2008; Adjusted EBITDA was $264.6 million, a 27% increase over the $208.0 million in 2008; and net income was $33.0 million. For more details on Encore Capital’s third quarter performance visit CardData (www.carddata.com). (CF Library 10/29/09)
Experian has partnered with Convoke Systems to offer the “Convoke Systems Platform” centralized repository used
to manage and provide real-time data on charged off accounts. The “Convoke Systems Platform” provides access to data, documents and chain of
title information for accounts that have been charged off and sold to
debt buyers or assigned to collection agencies and law firms. This
service provides quick and secure online access to information such as
the original application for credit, statement history and itemized
balance due, all of which are required or are becoming a requirement to
verify and validate legitimate consumer debt. Additionally,
the “Convoke” Platform benefits consumers by ensuring the
accuracy and integrity of their data and also helps in resolving and
validating account disputes. As charged-off debt and whole loans are
being bought and sold numerous times, the process of establishing the
chain of title generally has been complicated, making it difficult to
validate and resolve collection accounts.
Debt purchaser Asset Acceptance Capital Corp has hired Mark J. Cavin, previously COO at Arrow Financial Services, as VP/Collections.
Cavin has over 31 years of collection industry experience for major
domestic and international collection portfolios. Most recently, Cavin
served as senior director and chief operating officer at Arrow Financial
Services, LLC at Sallie Mae Co., where he was responsible for the
internal and external servicing operations of the company. Prior to
joining Arrow Financial Services, Cavin was senior manager with Union
Bank of California, where he spearheaded collection and recovery efforts.