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The Economy

Since the economic downturn began in the U.S. in 2008, the fortunes of ARM companies have largely mirrored the broader business environment. Debt collection agencies are particularly susceptible to high unemployment, inflated consumer bankruptcies, and plummeting housing pricing. Combined with a general tightening of credit standards, the ARM industry is more tied to macroeconomic trends than ever before.

Third-Party-Debt-Collection-Q42012-FRBNY

Number of Americans with Third Party Debt Collection Account Hits All-Time High

The percentage of Americans with at least one account in third party collections rose to an all-time high in the fourth quarter of 2012, according to the Federal Reserve Bank of New York. The average account balance of those in collection decreased.

In its Quarterly Report on Household Debt and Credit for the fourth quarter of 2012, the FRBNY noted that 14.6 percent of American consumers had an account in the third party debt collection system, up from 14 percent in the third quarter.