Debt Collection Agency Adding Hundreds of Jobs

Student Loan Girl — Tue, 18 Nov 2008 17:21:00 GMT

Premiere Credit of North America, a debt collection agency based in Indianapolis, is a bit of an anomaly in today’s down economy — it is thriving at a time when many businesses are cutting back their workforces and many debt collection agencies are losing money to cash-strapped consumers who can’t pay up.

Premiere Credit, which specializes in collecting unpaid student loans and government debt, has been performing so well that it’s looking to add nearly 300 employees to its 250-person staff, reports Erika Smith of The Indianapolis Star (“Debt Collector Premiere Credit to Expand, Add 300 Jobs,” Nov. 13, 2008).

To accommodate its growing business, Premiere Credit is also preparing for a $4 million expansion of its headquarters and is planning to open a second operations center (“Indianapolis Debt Collection Firm to Expand,” Chicago Tribune, Nov. 12, 2008).

The company, which manages more than 700,000 accounts valued at more than $1 billion, is scheduled to receive about $2.5 million in performance-based tax credits from the state, as well as up to $200,000 in training grants.

Student Loans Make Up 40% of Company’s Debt-Collection Business

Premiere Credit CEO David Hoeft attributes the company’s growth to its four-year contract with the U.S. Department of Education, which currently accounts for 40 percent of its business. While the number of delinquent college loans isn’t growing — the student loan default rate has remained steady at 5 percent over the last few years — Premiere has snagged a greater proportion of collection work, Hoeft said, and, with the help of an expansion to its Education Department contract, Premiere’s student loan debt collection business is expected to grow even more.

Debt collectors have a much easier time collecting government-backed student loans than unsecured debts like credit cards, which are not tied to an asset. Federal student loans can forcibly be repaid in a number of different ways and debt collectors have more legal leeway to track down debtors.

“There’s no statute of limitations on collection efforts. [Federal student loans], more often than not, can’t be discharged in a bankruptcy,” Smith writes. “Collection agents can garnish wages, tax refunds and Social Security payments, and they can access a federal database of new hires that makes it easier to find employed people who can pay.”

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Library Book Past Due: Loan Denied

Student Loan Girl — Wed, 26 Dec 2007 23:00:00 GMT

Chances are you have overdue library books laying around in your dorm room or apartment. Maybe the book you checked out six months ago has become a part of your décor—a handy paperweight on your desk or an unconventional coaster on your coffee table.

You’ve thought to yourself, no biggie, right? Not quite. You might want to dust off the CD’s, DVD’s and other library materials you have and drop them off. Return them before the fines you’ve racked up get turned over to a collection agency.

Turns out, more and more libraries think their missing property and your laid-back attitude about it are quite a big deal. And they’re hitting you where it hurts the most, your wallet.

If you’re not careful that overdue book could prevent you from getting a loan for a car or a house.

Libraries Collecting on Overdue Fines with Big Help

Many libraries have teamed up with Unique Management Services, Inc., a collection agency that specializes in recovering library books and late fees.

The company based in Jeffersonville, Indiana, tracks down late accounts for more than 850 clients (libraries of all sizes) in the United States, England, Canada and Australia. Its goal is to shock library abusers—most of whom are average, well-meaning people—into action, Kenes Bowling, the company’s manager for customer development, tells The New York Times.

The debt collector’s website states it send letters that gently nudge people into returning items that rightfully belong to the library and the people it serves.

New York Times reporters Anne Barnard and Jo Craven McGinty write that included in one of the company’s standard letters is language like: “Once reported, this adverse information can stay on your record for seven years!” The letter goes on to warn that car dealers, department stores and banks may learn of the library users’ misdeeds. “Why allow this to happen?”

The company typically sends out two letters and follows up with a phone call to your home. It claims phone calls improve results as much as 30 percent over letters alone.

The Moral: Be a Good Patron

With such verbiage, it’s hard not to see that your local library means business.

It’s not that libraries want to be seen as bullies. But when you consider that in a little over a decade, Unique Management Services has managed to retrieve $5.8 million for the New York Public Library System alone, you can see why libraries are turning to debt collection agencies like UMS for help.

Libraries want to penalize people who believe items can be checked out to infinity and beyond and those who simply want to sell them or keep items for their personal collections.

If you’re reported for owing a library fine, you could see your credit rating drop by 100 points or more, Craig Watts a spokesperson for Fair Isaac, the company that scores your credit history, tells CNN.com.

So don’t wait to be tattled on. Just take your library items back and pay up before you pay too much.

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Student Loan Blog : Debt Collectors

Debt Collection Agency Adding Hundreds of Jobs

Library Book Past Due: Loan Denied