More Than Half of Debt Collection Companies Saw Increased Volume of Accounts in Past 12 Months
Rhea-AI Summary
TransUnion (NYSE: TRU) has released its sixth annual debt collections report, revealing that 52% of debt collection companies experienced increased account volumes in the past 12 months. While 62% expect better financial positions next year, companies face challenges with decreased collectability since 2020 and rising concerns about data security and compliance.
The report highlights significant technological investments, with AI adoption growing from 11% in 2023 to 18% in 2024. Top AI applications include account segmentation (57%), payment outcome prediction (57%), and self-service negotiations (56%). Traditional communication methods remain dominant, with letters (87%) and telephone calls (86%) leading, followed by email (74%). Notable trends include a 24% decline in credit bureau data furnishing and increased adoption of online payment portals, rising from 79% to 88%, with 25% of companies collecting over 40% of payments through this channel.
Positive
- 52% of debt collection companies saw increased account volumes
- 62% of companies expect improved financial position
- AI/ML adoption increased from 11% to 18% YoY
- Online payment portal adoption grew from 79% to 88%
- 25% of companies collect over 40% of payments through online portals
Negative
- Decreased collectability trend since 2020
- Rising data security and compliance concerns
- 24% decline in credit bureau data furnishing usage
News Market Reaction – TRU
On the day this news was published, TRU gained 5.81%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
TransUnion research finds shifting preferences in communication channels and increased investments in AI tools
CHICAGO, Jan. 15, 2025 (GLOBE NEWSWIRE) -- More than half (
However, the volume increase for new accounts has been coupled with a decrease in the collectability—a trend that has been underway since 2020. In addition, there are rising concerns about data security and compliance with government regulations.
These challenges are prompting
“Growing collections businesses are better positioned to take advantage of new technologies available in the market,” said Manny Plasencia, senior director of TransUnion’s third-party collections business. “Utilizing data to drive the right approach in a rapidly changing environment is becoming more impactful to recovery and collections performance than ever. Those that do will be able to unlock efficiencies in both contacting and collecting their accounts.”
Investing in AI
Among the fastest growing changes for debt collectors is with the use of artificial intelligence (AI) and machine learning (ML). Almost half of companies that had no plans to use AI/ML technology in 2023 are now considering third-party or in-house solutions.
The number of debt collectors investing in AI/ML grew from
Comms channels begin to shift
Standard methods, like letters (
Email communications (
Only
The investment in more digital communications channels is helping to drive a shift in payment processes. SMS/text and email communications generally drive the consumer to the online payment portal to facilitate collecting payments with minimum human friction.
The number of debt collection companies using a self-service online portal for consumers increased from
TransUnion’s TruContact™ Trusted Call Solutions can help debt collectors determine the best time and channel for reaching consumers. In addition, Branded Call Display lets the consumer know that the call is legitimate and can facilitate the collections process by explaining the purpose of the call.
Read the full report Preparing for Opportunity: Investing in Efficiency to Scale Operations.
About the research
To collect the information used to gain the insights in this report, a survey was conducted in Q3 2024 that included 225 debt collection professionals representing different disciplines of receivables management: creditors, debt buyers, collection agencies, collection law firms, BPO firms and other supporting organizations. In addition to the survey, this report also incorporates findings from secondary research pertaining to the debt collection industry’s economic indicators, as well as consumer credit trends to provide additional context. Respondents in the 2024 survey represented a slightly different group of debt collection company types, with
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business
| Contact | Dave Blumberg TransUnion |
| david.blumberg@transunion.com | |
| Telephone | 312-972-6646 |
FAQ
What percentage of debt collection companies saw increased account volumes in 2024 according to TransUnion (TRU)?
How much did AI adoption grow in debt collection companies from 2023 to 2024 (TRU report)?
What are the top 3 applications of AI/ML in debt collection according to TransUnion (TRU)?
How has online payment portal adoption changed from 2023 to 2024 in debt collection (TRU report)?
What percentage of debt collection companies expect better financial positions next year (TRU study)?
