U.S. Debt Collections Industry Worth $15 Billion. Moderate Growth

Feb. 2, 2022…   Marketdata LLC a leading independent market research publisher of “off-the-shelf” studies about service industries since 1979, has released a new 145-page report entitled:  U.S. Debt Collection Agencies: An Industry Analysis . This  9^th edition best-selling study contains the latest survey highlights, facts, and forecasts from the: U.S. Census Bureau, FTC, Federal Reserve, IRS, Consumer Financial Protection Bureau and more. 
 
According to Research Director, John LaRosa:  “Debt collections is a tough business, but it can be lucrative. This industry is attractive to investors, but growth is constrained by federal and state regulations that make it harder to collect. Skilled collectors are in high demand, now aided by tools such as A.I.”
 
 
Major Findings:

* Industry Size … Marketdata estimates that U.S. Collection Agency revenues grew just 2.7% to $14.99 billion in 2020 and were flat in 2021.  From 2022 to 2025, we forecast moderate 2.8% average annual growth.

 * The Covid-19 pandemic really didn’t affect the industry that much, since consumers cut spending, received stimulus payments and enhanced unemployment benefits, and had the cash to settle debts and respond to collectors’ requests. Debt buyers experienced a very positive environment.

* The industry is consolidating. There are an estimated 3,200 collection agency companies in the U.S. operating about 3,500 individual offices or sites. The average office generates $4.1 million in annual receipts (vs. $2.3 million in 2007).

 * The 50 largest companies in the industry capture 52% of total revenues, up from 46% in 2007. Single-unit operations capture about 35% of industry sales now, down from 45% in 2007.

 * Competition is fierce, based on recovery rates and technology. Profitability has fallen for smaller competitors. The big are getting bigger, fueled by acquisitions and greater capability to harness artificial intelligence, as well as moving into international markets.

* Major industry trends include: consolidation, declining profits, the emergence of artificial intelligence in collections, outsourcing of business (incl. to the IRS), increased compliance pressures (Fair Debt Collection Practices Act), shortage of skilled collectors, the growth of debt buying, and moving collections offshore.

* The industry still has a bad public relations image. The Federal Trade Commission and Consumer Financial Protection Bureau report that debt collection topped the list of consumer complaints in 2020, logging 82,700 of them, up 10% over 2019. Regulations hamper the recovery rate. Most complaints are related to attempts to collect debts not owed (phantom debt collectors). New CFPB rules took effect in Nov. 2021.

* Five large collection companies are estimated to have generated $3.5 billion in sales during 2021, a 6.8% increase over 2020 levels. This $3.5 billion represents 23.5% of total industry revenues. Only two of the five companies are public. Encore Capital and Portfolio Recovery Associates. The others are Transworld Systems, the Kaplan Group, and Alorica Global Solutions.

 
About The Report
 
U.S. Debt Collection Agencies: An Industry Analysis , published in February 2022, is an independently market research study.  It contains 46 tables and is 145 pages long.  It costs $1,495, but is sold by individual chapters at lower cost.  A free brochure is available by mail, Fax, or email:  Contact:  Marketdata LLC, 7210 Wareham Drive, Tampa, FL 33647, or www.marketdataenterprises.com.  Marketdata studies are available via resellers such as: Profound (Dialog), Marketresearch.com, and MarketsandMarkets.com. A 19 pp. Overview Report provides the highlights and is available to the general public for $99, suitable for business plans and investors.

About Marketdata LLC

Marketdata is a 43-year old independent market research report publisher and consulting firm. It specializes in tracking a variety of commercial and personal service sectors, healthcare and niche markets. Marketdata also performs custom studies, teleconference calls, and consulting projects.
 

Contact Information

John S. LaRosa

Research Director

Marketdata LLC

(1) 8139718080

john@marketdataenterprises.com