Debt Collection in 2019 – From Recovery to Retention

MEDICIGlobal Head of Content

In October 2018, the total outstanding consumer debt in the US surpassed $3.96 trillion – a continuously increasing volume (in Q1 2018, the total outstanding consumer debt in the US was at ~$3.86 trillion) that could make debt collection one of the hottest businesses of 2019. Q3 2018 delinquency rates for consumer loans is at 2.28% (credit card loans at 2.49%) – a number that represents an opportunity for companies operating in the lending space to focus on practices ensuring sustainable and responsible recovery of funds.

While consumer debt continues to mount, recovery rates remain dismal. The estimated success rate of collections between 01/2014 and 12/2016 in the United States was just at 36.7% (with the same metric for Canada estimated to be at 17.7%, the UK at 65.8%, Mexico at 38.7%, China at 23.9%, India at 17.3%, Germany at 63.9%, and France at 67.8%).

The years ahead will signify a perfect storm to launch the renaissance of debt collection. In a study, two researchers from the Georgia Institute of Technology found that marketplace borrowers are more financially constrained relative to the average adult in the US. These borrowers have 2X as many credit cards and...

Elena Mesropyan

MEDICIGlobal Head of Content

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world. Elena has been recognized as one of the Top 100 Women in FinTech 2018. Prior, she has been ranked in the Women in FinTech Powerlist 2017.