As we mentioned here earlier, associations representing debt buyers came out strongly against a recent report published by the Consumer’s Union (publishers of Consumer Reports) and the East Bay Community Law Center that recommended stronger regulation of the debt buying industry. And it’s no wonder debt buyers want to keep things just the way they are, because they are doing better than ever in a difficult economy, raking in huge amounts of money for themselves and their shareholders.
At least that’s how it looks from recent public filings form two of the largest debt buyers out there, Encore and Portfolio Recovery Associates. According to a Reuters report, San Diego-based Encore Capital Group’s quarterly profits beat market expectations by a huge margin, reflecting a 20% increase in collections. Encore is the third largest debt buyer in the US based on annual revenue, and its shares trade on Nasdaq, currently for $23.60.
Portfolio, the sixth largest US debt buyer and collection agency did just as well. An article in Collections and Credit Risk indicates the company, based in Norfolk, Virginia, posted record fourth quarter revenues, with profits up nearly 70% from the previous year. Steven D. Fredrickson, Portfolio’s chairman, president and CEO attributed the record results to disciplined underwriting and improved collections efforts.
By turning debt collecting into a low cost, high volume industry – a factory, really, with the raw material made up of the lives of real people struggling to pay their bills, feed their families and maintain their homes – these companies are thriving in a troubled economy.