Is it Recession Yet? ? Umm, You?re Kidding, Right?

The first half of 2008 marked the continuation of the credit crunch, increasing delinquencies and chargeoffs and a weakening economy. How does the second half of the year look? InsideARM spoke with several industry executives to get their take on the economy and the receivables business. This article, which examines the views of call center technology industry executives, is one of a series of articles looking at the next six months.

Allyson Boudousquie, director of business process marketing for Aspect Software, agreed that collection companies are looking for ways to maximize their resources in order to be successful in the current economic environment, which she expects to stay slow for a while.

“We’re seeing increased delinquencies across all verticals,” Boudousquie said. “All of our customers are looking at how to work smarter. Collection companies have to think outside the box, they can’t just work down a list. Debtors are getting smarter about avoiding [collections] calls. Collectors need to be more flexible, too.”

The most effective collection firms in the next six months are the ones that are the most effective in getting a debtor committed to a payment plan on the first successful contact, Boudousquie added.

Many observers are brushing off the debate whether the U.S. is officially in a recession, defined as two quarters of negative movement in the Gross Domestic Product.

“We may not be in a technical recession, but if we aren’t, this is about as recession-like as I’ve ever seen it,” said John McNamara, chief marketing officer for LiveVox. “During this downturn, the volume of business [for collection firms] goes through the roof, but the cost of collections is much higher.”

McNamara expects collection firms to make increasing use of technology in order to reign in those costs.