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The Positive Side of Debt Collectors
Posted on March 20th, 2012 By: Alison
Debt collectors may have a rough reputation, but a new study found that third-party debt collection has an important impact on the economy. “These findings reinforce the critical role the third-party debt collection industry plays as a service provider in recovering unpaid consumer debt on behalf of the public, private and non-profit sectors,” said ACA International CEO Pat Morris in a news release. “Moreover, third-party collectors are actively engaged in their local communities as employers, volunteers, philanthropists and taxpayers.”
The study found that a total of $55 billion was recovered in 2010 on behalf of creditor clients. It also saved the average household $396 by keeping the costs of goods and services lower. These collection agencies also employ many people. They have a total payroll of $5 billion and indirectly have created more than 300,000 jobs. The industry and their employees paid more than $495 million in federal taxes, $509 million in state and local taxes in 2010.
Experts report that the collection industry also contributed more than $85.2 million to charitable causes, volunteering 652,000 hours. “Our nation was built on the premise that those who provide credit, goods and services to consumers have the expectation of being repaid,” said ACA International President Mark Neeb. “Recovering these debts helps organizations survive; prevents layoffs; keeps cost down and credit, goods and services available; and reduces the need for tax increases to cover government budget shortfalls.”