Released: November 17, 2008

Even debt collectors hit hard times

Source: Willian M. Bulkeley, Wall Street Journal (Free Registration)

This should be the best of times for America’s debt collectors, since never has a society been so in hock. But ironically, much of the debt-collection industry is struggling because there’s little cash left to squeeze from strapped consumers.

“People joke with me that my business must be great,” said Mark Neeb, president of Affiliated Group, an Omaha, Neb., collection agency. “I would say the opposite is true. Our business flourishes when the consumer has money.”

Debt collectors either work on consignment for creditors, keeping 20 percent to 25 percent of what they collect, or buy portfolios of unpaid debt from creditors and then try to collect enough to make a profit. When the people behind on their bills aren’t classic deadbeats but are truly tapped out, debt collectors also get pinched.

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