Collectors Doing More for Clients, Keeping Less Money: Study

http://www.insidearm.com/news/00015305-collectors-doing-more-for-clients-keeping/

A recent study of third-party debt collection agencies conducted by Ernst & Young on behalf of ACA International reveals that debt collectors have been collecting more money for clients in the past few years, though commission rates have dropped.

The study, conducted in Fall 2011, showed that the third-party debt collection industry returned $44.6 billion to clients in 2010 and kept $10.3 billion in commissions, for an aggregate commission rate of 18.8 percent.

But only five years ago, debt collectors were enjoying an aggregate commission rate of 23.5 percent.

ACA twice engaged PriceWaterhouseCoopers to conduct similar studies, one in 2005 and another in 2007. When compared to the results from the most recent Ernst & Young study, a definite trend emerges of shrinking commission rates with higher overall collections.

	2010	2007	2005
Gross Recovery	$54.9 billion	$51.9 billion	$51.4 billion
Total Commissions	$10.3 billion	$11.5 billion	$12.1 billion
Net Returned to Clients	$44.6 billion	$40.4 billion	$39.3 billion
Aggregate Commission Rate	18.8%	22.2%	23.5%