In Your Words: Comments from the ARM Industry Confidence Survey

Collection Performance – Creditors

“We are implementing better, more targeted collections lists for our staff to be able to focus on the customer accounts that REALLY need attention.”

“We added a collection person and gave educational courses to our collectors to help increase collection efforts.”

“Expectation is that it will improve back to 2007 levels in the long term.”

“Our receivables are around $5M and our write off is less than 1%. We keep tight controls of credit lines and open accounts.”

“It’s very important to involve all the employees.”

“Our 1st quarter was still very strong overall, however I don’t attribute this to consumer confidence I attribute this to improvements in our technology and an increased focus on the training of staff….Our philosophy is if we cant make the economy any better, we can certainly work on ourselves internally….and look for improvements there.”

“We are an Educational Institution and have not been adversely affected by the economy to date. I keep waiting for the other shoe to fall.”

“We had a great first quarter. It seems that our collections increased because there is more fear out there about the decline in the economy. A lot of people who previously would have ignored their bill because they could “put it off until tomorrow” were paying now, because they are unsure about the future.”

“Collections are great. A/R over 90 days is the lowest it has been in over 20 years and we had biggest 1st quarter ever (15% growth over 08 and it was the prior best).”

“Our collection agencies have the tougher, older accounts.”

“The most important thing is the IT, that means if the software our collection agencies use doesn’t talk with the internal software you will have always a problem of knowing what’s going on!!”

General Comments – ARM Companies, Creditors and Vendors

“The government and the collection industry have no clue how devastating the US FDCPA is on regular state law legal procedure. Someone with some practical experience needs to get behind the drivers wheel, or these absurd lawsuits by consumers and their very effective lawyers are going to emasculate the ordinary state law procedures involved in contract enforcement. Economic conditions obviously increase the number of defaults, which increases our business. Collections (for us) have been surprisingly pretty good however, despite the apparent loss of wealth nationally.” – Collection agency professional

“We have great confidence because during turbulent times the best really shine.” – Debt buying professional

“Unemployment is the biggest variable we face. Will layoffs continue or will stimulus efforts keep things afloat until business picks up? We hope for the latter.” – Collection agency professional

“I think this recession will be over in September, and the stimulus package is starting to take place now.” – Collection agency professional

“If something doesn’t happen to begin building consumer confidence in the future, many of us may not be able to sustain continued losses.” – Collection agency professional

“We need to keep the government out of our business. This years report to the FTC will sky rocket with complaints due to the huge enormous amount of new debtors. They better start making rules that make it easier to collect or there will be no more lenders.” – Debt buying professional

“If unions enter the collection industry you will see a major decline in agencies.” – Collection agency professional

“With our current president and democrat majority in congress, I see a swing toward consumer rights to the degree that it renders the collect industry totally ineffective. It is one thing to protect consumers from abusive practices and tactics – but we have and will continue, at a very rapid pace, to create an environment that fosters pure debt AVOIDANCE.” – Collection law firm professional

“Industry must be more politically active and support ongoing lobbying efforts.” – Collection law firm professional

“I believe strongly that communication between the debtor and collector is key. I rely on the collectors to effectively communicate to a debtor the significance of satisfying their financial obligations and educating them on the potentially negative impact of failing to do so. Many debtors have turned to a “misery enjoys company” state of mind and in turn have convinced themselves that being in debt is not so bad after all since “so is everyone else” or convincing themselves that their financial woes are a direct result of a poorly performing economy rather than plain financial irresponsibility and failure to plan and prioritize.” – Collection agency professional

“The press / newscasters are helping to create this climate of fear. We need talk about what is working not just those items that are broken.” – Debt buying professional

“Because we are a provider of services to the ARM industry, particularly skip tracing and asset location services, we’re seeing explosive growth from our clients in both the collection and repossession industries. Our fees are contingent so our clients can reap benefits without having to layout overhead that won’t be recovered in most cases. Our biggest potential problem is more work with fewer results than we currently average because more and more people are not working.” – Vendor to the ARM industry

“I am not happy with the way Geitner (the printer) the C of C, Fed Reserve and OTS have decided for us how to manage disposing of probable toxic assets. The idea that the same people that created this mess will now be in charge of placing these MBS blows my mind. Who cares right? Our Industry should be directing this initiative and I have not heard a single word from our Trade Associations on this subject. You should form a Panel of experts as a delegation to go to the hill before it is too late.” – Vendor to the ARM industry

“Full steam ahead, time to enhance our software and advertise more.” – Vendor to the ARM industry

“Based on our product ratings, quality, and service we will sustain the economy for about 1 year, after that it will be touch and go if the consumer spending doesn’t improve.” – Vendor to the ARM industry

“I think it had to come. We can only survive so long living above and beyond our means, and I point an emphasis on including Big Business and the Government!” – Vendor to the ARM industry

“We need to be reminded that the economy is ultimately not driven by some Wall Street number, but by the attitudes and consciousness of each and everyone of us….If we believe things are getting better right here right now….then they will….If as a society we don’t think things will get better till next year…then again that’s what it will be!” – Credit granting professional

“Having record months, but do not know exactly why.” – Collection agency professional

“37 years in business and I have never seen it this bad. With current trends against collection agencies, I doubt the current economic or near future economics are going to change at all. It will be a struggle.” – Collection agency professional

“Many opportunities expected to come from Financial Institutions, but risk of underperforming portfolios increasing i.e. prices to decline for debt purchase.” – Debt buying professional

“We think this is an extraordinary time to grow in the collection industry. Much like the stock market there is unprecedented opportunity to take advantage of everyone’s fear of the economy. We have decided to grow during these times as opposed to shrink our business.” – Collection agency professional

“We are confident that we will be just as profitable as ever. We will have a far superior staff. We will follow our own advice, ‘Tis the set of the sails, and not the gales, that determines the direction we go.’” – Collection agency professional

“Cautiously optimistic. I have confidence in our ability to perform. Two things that would hurt the industry are over regulation and unionization.” – Collection agency professional

“I think that the agencies that have strong sales teams and are not utilizing outdated sales techniques will grow during the current economic times and are poised for unprecedented growth when the economy strengthens due to new client accrual and retainage.” – Collection agency professional

“For a small company like ours, its a slippery slope. People are not in a position to pay balances off, or even settle balances in large payments, so establishing a good PPA strategy is key. Not over paying for average performance, and making sure incentives work for the company will also be key. The room for error is much smaller than before.” – Collection agency professional