Collection News

• PR - The Affiliated Group Becomes an ACA-Certified Collection Agency
  ACA International (ACA) announced that The Affiliated Group (TAG) of Rochester, Minn., successfully completed the process to become a certified agency through the ACA Professional Practices Management System (PPMS) program. ACA International is the world’s largest international trade association for debt collection companies. To become certified through ACA’s PPMS program, a collection agency must complete a rigorous application and audit process. Certified agencies must meet program requirements including developing an individualized professional practices system of management for their agency, creating supporting documents such as a company manual and submitting specific business records to an independent auditor to assure compliance with the program’s high standards for collection agency operations. Periodic audits are conducted for an agency to maintain their certified status. TAG has been in business since 1923 and is located in Rochester, Minn. The company has been owned by Mark Neeb, President/CEO, and Paul Skovbroten, Vice President/General Manager, since 1996 and is a full service accounts receivable management firm employing over 100 people.
• Why We Do What We Do
  It's no secret that debt collectors get very bad press on the national and local level. There are countless examples of this, but here is one segment that ran on the Fox affiliate in Washington, DC just last week:Abusive Debt Collector Tactics Caught on Tape It's not that there aren't plenty of collectors that ignore the law and commit egregious acts, because there are plenty of those. But when we see a piece, like the one above, that implies -- or actually comes out and says -- this behavior is standard operating procedure, we get a little mad.We started this site to serve an audience that is under-served in traditional media. We try not to be blatant cheerleaders or naive defenders of the industry. But we have always, and will always, try to give all sides to a story...including the debt collectors' side.Thank you for your support over the years. Our readers are the most critical component in our success. If you have any news you'd like to share, or a suggestion for a story, just contact us and we'll listen.Have a safe and happy holiday season.
• Asta Profits Rise 14% as Revenues, Expenses Jump
  Asta Funding today reported net income for its fiscal year ending Sept. 30 of $52.3 million, up more than 14 percent from the previous fiscal year. Net income for its fiscal fourth quarter was $13.1 million, a decline of nearly 3.7 percent from $13.6 million in the same period a year ago. Revenue for the year rose 38 percent to $140.8 million, while revenue in the fourth quarter was $43.1 million, up more than 41 percent from $30.5 million.Investors cheered the news, sending Asta stock up nearly 13 percent to $30.80 in midday trading. The move is a marked contrast from this week as traders sent the stock down more than 19 percent since late last Friday after Asta announced it would delay filing its annual report.Englewood Cliffs, N.J.-based Asta purchases, manages and liquidates consumer receivables. Asta more than doubled the face value of the portfolios it acquired during the year, paying $440.9 million for debt with a face value of nearly $10.9 billion, compared with $5.2 billion last year.In its fourth quarter, Asta paid $38.6 million for portfolios with a face value of $644.8 million.Expenses increased sharply for the year and quarter. General and administrative expenses in the fiscal year rose more than 39 percent to $25.5 million, and more than 68 percent to $8.1 million in the fourth quarter.Interest expense came in at $18.2 million for the year, up nearly 400 percent from $4.6 million a year ago. Impairments skyrocketed. Fourth quarter impairments rose nearly 500 percent to $6.7 million, while impairments for the year came in at $9.1 million, an increase of more than 400 percent from $2.2 million in fiscal 2006.
• Aktiv Stays Active, Buys Two Spanish Portfolios
  Oslo, Norway-based Aktiv Kapital ASA announced it bought two portfolios from two financial institutions in Spain with a total face value of $133.2 million and about 75,000 non-performing customer accounts.Aktiv reported that it had spent this year $191.4 million on portfolios and remains in the hunt for more purchases before the end of the year.Recently, Aktiv announced it had purchased about 800,000 non-performing telecom accounts from Spain’s Telefonica Group ("Two European ARM Giants Announce Big Portfolio Buys," Dec. 18). Aktiv reported revenues for the nine months ended Sept. 30 of $214.6 million and profits before taxes of $74.3 million.
• New NCO Group Should Expand in BPO Market: Analyst
  If NCO Group’s $325 million deal to acquire Outsourcing Solutions, Inc. closes as expected next year, the new company will be in a strong position to compete with larger companies in the massive business process outsourcing (BPO) market, according to a BPO analyst. The acquisition, announced last week, would merge two of the largest collection agencies in the country. But both companies have recently been emphasizing growth in the broader BPO. Andy Efstathiou, director of the banking sourcing program at BPO analyst Nelson Hall, told insideARM.com that both NCO and OSI have long been on his company’s radar screen. “They are already both major players,” said Efstathiou. The combined company should provide an even more robust platform for growth in the sector, he explained. “It’s going to be easier for the new NCO to upsell other services to existing clients,” said Efstathiou. He concurred with comments from an NCO executive last week "NCO-OSI Deal Signed, Now it has to Get Done," Dec. 13), that OSI has a strong position in first-party collections compared to NCO’s core competency of third-party work. That difference alone could lead to additional service offerings, said Efstathiou. But Efstathiou cautioned that toggling between first-party and third party work is very tricky. “The company must carefully guard their clients’ brand,” he said. “First-party work is typically done under the client’s name, while third-party collections are done under the servicer’s name. The handoff between those two services must be done very carefully.”While there is plenty of room to expand service offerings into other BPO segments, accounts receivable management and collection services represent the highest growth area in BPO, according to a recent report from BPO analysis firm EquaTerra. According to the report, growth in demand for ARM and collection services outpaced all other services in the finance and accounting umbrella. Total demand for ARM work was eclipsed only by demand for accounts payable outsourcing services. Any impact the newly-expanded NCO will have on the broader BPO market will hinge on integration, said Efstathiou, and the number of OSI legacy sites that stay open or under full operations capacity. Neither company commented last week on integration plans. OSI President Kevin Keleghan did tell The Columbus Dispatch (Ohio) Wednesday that he does not expect major changes for the 750 employees the firm currently has in Ohio. OSI has three locations in the state: Columbus, Westerville, and suburban Cleveland. Keleghan told the paper that due to the narrow focus of the workers in those offices, he felt the centers, and their jobs, were safe.
• MedFICO Will Find Those Most Likely to Pay: Developer
  The Chairman and CEO of Healthcare Analytics told insideARM that the medical payment scoring tool the company is developing will be just as useful to ARM professionals as it will be to hospitals. “It’s for anyone trying to settle a bill,” Stephen Farber said of the medFICO score being developed with backing from Fair Isaac (“Medical FICO Score to Judge Patient Payment Ability,” Dec. 12). “If you’re a collection agency it will help you know who you’re more likely to collect from. It will help you achieve a settlement sooner, with a higher degree of confidence … and with a lower expenditure of resources.” Fair Isaac, for-profit hosp