John Nemo says the notion that debt collectors are capitalist vultures who profit off other folks' struggles is a "stereotype."
Nemo is a spokesman for ACA International, a trade association for the debt collection industry -- an industry like any other.
"Our industry is no different than any other in the U.S. -- we do better when times are good," he says. "A number of agencies are having to trim staff, cut costs, and for some, close their doors."
As loan default rates rise in a shrinking economy, the demand for debt collection services is surging, and more and more people are getting calls from debt collectors. In turn, more and more people are complaining. The Federal Trade Commission says it received 78,838 complaints about debt collectors in 2008 -- an increase of 9 percent over the previous year. The FTC receives more complaints about debt collectors than any other industry.
Nemo says the increase in demand has not amounted to a corresponding increase in the number of people able to repay debt, so business is tight. But presidents of ACA International member-companies interviewed by Huffington Post say the shock of the recession has not quite reached their balance sheets, partly because of the psychological impact on consumers. Scary headlines, rising interest rates, fees, and dwindling credit availability are making some borrowers more credit-conscious, and therefore more willing to settle up with collectors.
"We have the sense that over the last year consumers are doing a much better job managing available credit and cleaning things up," says Mark Neeb, president and CEO of The Affiliated Group, a Minnesota-based collection company. "Business is brisk."
The noisome debt collection phone calls are placed at a brisk pace by a high-tech automated "predictive dialing" system that minimizes the amount of time Affiliated's callers spend between conversations. The system juggles calls on 175 lines so that Neeb's agents are never idle for longer than 30 seconds. The phone numbers come from clients, usually medical facilities and utility companies.
But Neeb's not optimistic. He doesn't need to look farther than his mail pile to know tougher times lie ahead.
"At my house I don't get hardly any offers for credit cards these days," says Neeb, who expects the economic slowdown to catch up with Affiliated later this year as consumers' savings dwindle.
Richard Doane, president and CEO of Sunrise Credit Services, an upstate New York collection agency, offers a similar assessment. His business has picked up new clients and added new employees lately, but Doane expects the slump to slow things down within a year or so.
"People have stopped spending and are looking to get their lives in order from a credit point of view, which is outstanding" for both consumers and debt collectors, says Doane. But once the economy begins to recover as consumers resume spending, Doane thinks an increased credit-consciousness will diminish the demand for collectors.
"When consumers start to spend again we'll start to see a difficulty, because it will be at that time they'll say, 'We can handle the debt.'"
Do you work in the debt collection industry? Tell me what it's like! Email me at arthur@huffingtonpost.com. Anonymity guaranteed.