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Impact of last year's record bankruptcy total is being felt; recovery rate down or barely staying even
Many Washington collection agencies are working harder, but earning less. On average, their recovery numbers are better than those experienced by collectors in many other states, but there's a gnawing paranoia that the decent times are coming to an end.
"What we're hearing from the Northwest is that collectability is getting more difficult," said Nina Douglas, a spokesperson for the American Collectors Association, a collection agency trade organization based in Minneapolis. "It simply took the recession a longer time to hit in the West."
Last year, Western Washington experienced a record 14,870 bankruptcies and the fallout from that record may finally be hitting home.
Many agencies are confronted with the double whammy of shrinking profit margins and decreased consumer and business debt recovery on one hand and the need to spend more on capital-intensive office and telecommunications equipment on the other.
Dan Hunter, chairman of Redmond's Washington Credit Inc., one of the state's largest agencies, notes that his shop incorporates over a million dollars' worth of computers and telephone gear. This includes automatic predictive dialing, a system in which the computer decides whom to call and in what order. The system screens out answering machines and his collection agents pick up the phone only in response to the sound of a live voice on the other end.
Hunter's industry also accesses a mountain of exotic databases that can track address changes. Debtors, these days, can run but they can't hide.
"With many clients there's never any paper exchanged. Everything is done electronically. To handle the volume we do, we simply have to do this," says Hunter, whose 80-person work force faces a monthly caseload of some 12,000 delinquent accounts representing about $5 million …