Encore Capital Group - Competitors

Encore Capital Group Competition

Now Viewing Encore Capital Group's competition in: Credit Collections and Services (primary)

Recent Developments

Unemployment Insurance Funds Shrink - The increase in unemployment claims has all but dried up insurance trust funds in some states, potentially affecting collection services. Unemployment was at a five-year high in August, straining many states, as state governments process about one-third of unemployment claims. California, New York, Ohio, and Michigan are all expected to run out of state unemployment insurance funds, which means that the federal government will be required to loan them money to meet their obligations. Collection agencies could see a rise in business, as unemployment insurance is only a fraction of a worker's compensation.

Bankruptcy Filings Highest in Years - The high cost of credit continues to plague both consumers and businesses, causing the number of bankruptcy filings to increase to their highest in over two years. In the year ended June 30, bankruptcy filings had increased 29 percent from the previous year. As costs for food and fuel rise, so do credit costs. Lenders are increasingly leery of making loans, causing some consumers and businesses to seek bankruptcy protection rather than face collection efforts.

Student Loan Lenders Adopt Code of Conduct - By agreeing to adopt a code of conduct, the New York attorney general announced that seven student loan companies resolved an investigation into whether they misled consumers. The industry had been charged with directing false and misleading advertising to students. Delinquent student loans are frequently turned over to collection agencies, so better procedures on the front end may reduce the number of questionable student loans and the necessity of turning them over to collection agencies.

Competitive Landscape

Demand for credit reporting and for collections services are driven by the volume of financial transactions, and by the health of the economy. The profitability of individual companies depends largely on efficiency of operations. The profitability of collections companies that buy receivables portfolios depends on their ability to assess recovery potential. Large credit reporting companies have significant economies of scale in operations. Small companies can compete successfully in the collections segment because of the labor-intensive nature of the work.

Full Industry Overview For Credit Collections and Services

Credit Collections and Services Industry Forecast

from Hoover's/D&B subsidiary First Research

The output of US credit agencies other than banks, which includes credit collections and services, is forecast to grow at an annual compounded rate of 5.7 percent between 2007 and 2012.

Credit Agencies Growth Even

First Research forecasts are based on INFORUM forecasts that are licensed from the Interindustry Economic Research Fund, Inc. (IERF) in College Park, MD. INFORUM's "interindustry-macro" approach to modeling the economy captures the links between industries and the aggregate economy.