Crunch to increase debt recovery outsourcing

More companies are expected to outsource some consumer debt management and recovery operations, even though the credit crunch hasn’t impacted the industry so far, research has revealed.
More than a quarter of respondents (26 per cent) to a survey sponsored by outsourcer Firstsource said they had not been affected by the declining economic environment.debt managers do expect to outsource to specialist collections and recovery agencies to increase their collections levels, reduce defaults, and lower their costs.

• 27 per cent of respondents said some consumers are delaying payment of bills by up to three months, and 22 per cent of debt managers reported they had increased their write offs of customer debt in the last 12 months.

1. 68 per cent of debt managers said they planned to increase their use of outsourcing within the next year and 27 per cent said they would outsource more within the UK

2. 18 per cent reported they would collect more from offshore, and 23 per cent expect to outsource more both within the UK and offshore.

Matthew Vallance, president of Firstsource, said: “Although most consumer debt managers report that they haven’t been rocked by the credit crisis, the trend amongst consumers is towards later payments which will consequently affect cash flow. “Debt managers are looking to debt collections and recovery outsourcers in the UK and offshore that have the resources to collect more debt.