LIVE FROM THE DBA CONFERENCE: Everyone is Talking About Everything

By Patrick Lunsford, CollectionIndustry.com

The talk at the Debt Buyers' Association 9th Annual Convention has been varied and wide-ranging. It seems that everyone has narrow interests to focus on, or everyone is content to talk about anything and everything in the debt purchasing world. In a room filled with buyers, sellers, brokers and resellers – and don't forget vendors – people are more than happy to shift the focus of conversation rapidly.

In the wake of Asset Acceptance's preliminary earnings warnings last week, many debt purchasers at the conference are wondering out loud if telecom debt, particularly wireless telecom debt, is worth all the trouble.

In the statement reporting their preliminary earnings, Asset Acceptance CEO Brad Bradley noted that they are continuing to pursue wireless telecom portfolios, but he acknowledged that the company did not make any wireless portfolio purchases during the final quarter of 2005. In addition, the statement specifically noted that the wireless portfolios had failed to meet the company's collections expectations.

It makes sense that wireless telecom portfolios would be a challenge to collect on. With traditional telecom debt, the telephone account was tethered to a physical address. If the phone was ever disconnected, the service provider and eventually collection agency could at least send payment demands by mail. This is not always the case with wireless telecom accounts. Although wireless providers diligently require costumers to have a physical and mailing address, many consumers take advantage of the unfettered nature of the account.

When asked, conference attendees mostly blew off the wireless telecom conversation. "We don't really deal in telecom paper," was a common response. One Midwestern U.S. debt purchaser and collector did, however, note that telecom portfolios, while sometimes difficult to collect on, can be quite profitable if the portfolio is priced right and the "collection agency working the accounts has a solid skip-tracing infrastructure." (Asta Funding commented on telecom portfolios in their earnings release today)

Many people at the conference were content to make contacts, talk about recent deals and converse on their cell phones...a lot. When discussing credit card portfolios, the conversations quickly turned to prices. There were many oohs and aahs over hundredths of pennies on the dollar in pricing discussions. Although the general consensus here is that prices are on the high side currently, no one is particularly discouraged, and no one is planning on giving up anytime soon.

Several attendees were open about seeking opportunities in emerging markets, both in debt types and countries. Canada seemed to be a popular place for open inquiry, as was Australia. In fact, a representative from Credit Corp., a leader in the Australian debt purchasing market, was enthusiastic about his company’s role in the burgeoning market and the prospects for further expansion of the Aussie debt buying industry.

In a growth industry, many at the DBA conference were using the opportunity to explore areas beyond their niche. But, as with most industries, only time will tell whether many are ready to forgo their core competency and branch out to other sectors.