by Phillip Slater

1. Immediate implementation and no delays with due diligence investigations because that work is done for you. A reputable debt seller’s due diligence process puts all potential bidders through a thorough review, including:

• Review of licensing where necessary
• Insurance and bonding coverage
• Financial and business reference check
  

2. Improved asset and liability management strategy;

• Collectors time can be spent working high potential accounts
• Collection agencies know they need to collect now or lose the account

3. Avoid unnecessary cost expenditures;

• Average costs to send 1099-C is $3 per account, including handling returned mail items
• Reduction in storage and maintenance costs for paper files
• Reduction in costs to work uncollectible accounts by in-house staff

• Au’s average return over last five years is $53,000 per financial institution
  

5. Improve risk-based lending models with better recovery forecasting ability;

• Modeling charge off levels and recovery streams, including debt sales, can allow you an additional data point to incorporate into your lending models
• Debt sale pricing is not dependent on third-party efforts for an acceptable ROI

6. Significantly shorten recovery timeline to as little as 15-18 months, and the funds are paid to your financial institution immediately.

7. Increase cost-benefit and reduce operating costs

• Cost reductions can be realized in every area used by your collections unit, including:
  
  • Telephone charges
  • Credit Bureau reports requested
  • Skip Trace tool usage

8. Increase competitiveness by having funds available to you immediately.

9. Safe alternative to outsourcing recovery operations because:

• Third-party agencies can leave your financial institution open to member/debtor lawsuits
• You retain near total control over your ROA on charge-off by determining when and which accounts to sell
• Graham, Leach, Bliley Act compliant for all data handling and transfer

10. Established and well-respected financial industry practice

• The Debt Sales industry was born approximately 16 years ago during the S&L crisis
• Many large, solid firms were established with a specific business plan to purchase charged-off debt, hold it and collect on it for a period of time
• There are currently six publicly traded Debt Purchasing companies with a market capitalization of in excess of $1.5B
• Many financial institutions incorporate debt sales as an integral part of their overall recovery strategy
• In the past five years, many other industries have gotten involved in debt sales as an active part of their asset and liability management strategy:
  • Telecommunications companies
  • Health care
  • Retail businesses of all types
  • Utility companies
  • Wholesale sales companies
  • Commercial debt
    

To read the top ten reasons why you should sell your debt with Au, click here.
 

About Au and AscendUnited.com
From strategy analysis and design, through implementation and results testing, Ascend United (AU) facilitates improvements to all phases of debt collection and recovery. AU offers a wide range of products for all types of financial services companies, including management of third-party collection programs, training, consulting and unique debt sales and services. Visit us on the web at www.ascendunited.com.

About Phillip Slater
Phillip Slater is Program Manager for Ascend United. He has been in the collections industry for more than 25 years and currently focuses on Au’s business development and consulting practice. His leadership has helped make Au the top selling broker of credit union debt in the United States. Contact Phil at pslater@ascendunited.com or 206.340.4843.