News & Resources

Collection industry feels economic burden as much as debtors

Aug 30, 2011 Mike Garretson

The down economy has forced many debt collection firms to cut staff, increase prices and modify operations, the Minneapolis/St. Paul Business Journal reports. InsideARM adds that despite there being more debt than ever before, there's also less money to collect. One example is Vadnais Heights-based I.C. System, which saw its staff dwindle from 1,300 in 2007 to 900 by 2011, and experienced a 25 percent revenue drop over the same time period, MSPBJ notes. "Our vision was to be a $100 million company in 2010," vice president Tom Gavinski told the news source. "When the recession hit, that really put a damper on those plans." Despite the setbacks, the Minnesota Department of Employment and Economic Development reports that collections jobs are expected to grow by 8 percent across the state between 2009 and 2019.  While many firms are suffering the same economic consequences as the debtors they're attempting to collect from, the industry is also trying to change its image. In Minnesota, consumer rights attorneys have gone after bad collectors, such as those who don't conduct background checks and are using illegal means to obtain money.