Collection Agencies Having Tough Time Collecting, But Satisfying Clients

Debt collection agencies and other accounts receivable management firms are finding the current collection environment challenging compared to last year, but their creditor clients are seeing good results, according to the preliminary results of insideARM.com’s ARM Barometer.

Nearly 40 percent of ARM companies said that it was more difficult to collect on accounts in the second quarter of 2011 compared to last year, with 45 percent reporting that it was “about the same.” But nearly 50 percent of creditors taking the same survey reported an increase in netback from their collection vendors, with 30 percent reporting similar results in Q2 compared to last year.

The discrepancy can be at least partially explained by a comment from a collection agency participant who noted frankly, “increased work [from clients] with no change in fees.”

The survey did show an increase in the amount of work being forwarded to ARM companies from creditors. Almost 45 percent of ARM companies reported an increase in accounts in the second quarter with 24 percent saying that account volumes were about the same as last year. Likewise, nearly 40 percent of creditors reported increasing their outsourcing volumes with 23 percent saying account forwarding was flat.

Collection agencies have responded by reporting a net increase in hiring. Just 20 percent of survey respondents reported eliminating jobs in the second quarter of 2011, with 44 percent reporting adding jobs.

The ARM Barometer survey for Summer 2011 is still open for participation and will close this Friday, July 29. The survey is very short and only takes three minutes to complete. A $50 Amazon.com gift card will be randomly awarded to a participant this week. Take the survey now to qualify for the gift card.