December 1, 2009
Recessions are down times for most businesses, but for a few, they represent opportunity. Jennifer Briscoe, CTO of Collect America, a broker of unpaid debt, says her firm has had its hands full as the recession wears on.
Collect America acquires and analyzes unpaid debt of different types, then resells it to debt collection agencies, along with software services that will help the agencies realize their collection goals. Business has been brisk. "We are as counter-cyclical as you can get," said Briscoe in a recent interview during a visit to San Francisco. It was already a well established broker of credit card debt when the recession hit. "We wanted to move into cell phone, auto loan and health care debt," said Briscoe. Its analysis services and hosted software services would work for those other types of debt, and there was plenty of uncollected debt available for a company that wished to be aggressive in the debt business. Collect America had deferred expanding into different forms of debt until it had rebuilt its core Asset Recovery Manager application on top of Oracle Fusion middleware. Before the reconstruction, it had been too difficult to tie the debt databases, reporting services and asset management systems for many kinds of debt into the core system. "Fusion is the backbone of Asset Recovery Manager," she said. Collection agencies independent of Collect America buy chunks of debt from the firm and use its hosted Asset Recovery Manager system to notify the debt holders by letter that the debt must be paid. It also gives them an option of paying at a Web site before a debt collector calls. For many people, "speaking to a debt collector can be an unpleasant experience," and the mere threat is sufficient to motivate payment, she noted. By diversifying in this recession, Collect America has been able to do a more efficient analysis of the assets it's acquired. For example, if one Social Security number shows up in a number of delinquent accounts -- say one debtor owes on his health care, credit cards, student loan and utilities as well as a boat -- then a collection agency can see what they're up against if they try to go after all the accounts separately. The Collect America analysis consults credit reports and turns up debtors who have declared bankruptcy versus those who have not. Its analysis also advises collections agents on how to steer clear of violating consumer protection laws. With health care debt, many health care vendors are usually involved in one account and, by law, health plan debtors may be contacted only once a day by a collections agent. But a debtor with delinquent payments on a Chase credit card as well as a Visa credit card may be contacted about each account once a day. With Fusion under girding Collect America's business processes, it became easier to alter business processes as economic conditions change. The middleware includes Business Process Management for modeling and implementing changes to existing business processes. One of the things that changes during a recession is the unemployment rate. Far from helping the debt collection business," a rising unemployment rate reaches a tipping point" where it gets more and more expensive to collect unpaid debt. That's because the network of friends and family that chime in to help a lone debtor tends to get overwhelmed as more and more people get laid off. When unemployment reaches a certain height, Collect America changes its business processes and slows the buying of debtor credit reports because it already knows how steep the uphill battle has become. When this interview occurred in October, Briscoe declined to say whether a national unemployment rate that was hovering around 10% was at the tipping point. But it seemed clear it was getting close.
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