Collection Management Part of Barclaycard Rise Past $5 billion

Barclays U.S. credit card business reported today it passed the $5 billion mark in credit card receivables, a rise of more than 250 percent from the $1.4 billion in receivables that Barclays PLC acquired in 2004 when it entered the U.S. market by buying issuer Juniper Bank. Barclaycard reported it had more than 3.5 million accounts, up from 700,000 three years ago.

The Barclaycard business model is partner-based, signing co-branding deals with more than 50 large merchants and organizations including U.S. Airways, Barnes & Noble, Travelocity, Frontier Airlines and the Harvard Alumni Association.

While that indicates a generally higher-income customer demographic, some cardholders still become delinquent in paying their monthly bill.

Barclaycard takes a proactive approach to its collection activities, keeping most of its work in-house, and preferring to work individually with customers, says Kevin Murphy, managing director of customer support. “When a delinquency exists, we determine the best solution for the customer. In a sense we’re a mini-marketing [group] not a classic collections agency.”

The agent tries to learn the causes of the delinquency, whether the customer is overwhelmed with medical debt, or a temporary reduction in income or another financial problem, says Murphy. “We tailor a suite of [solutions] for them. It may include forgiveness of portions of the balance, forgiveness of interest, we may send them to consumer counseling.”

The goal is to get the customer to respond; recognizing he may have a slew of bills to be paid including the mortgage, utilities and four other credit cards, says Murphy.

Murphy developed this type of hands on approach from his 12-years experience as a collector, working with First USA before it was bought by Bank One. Murphy was with Juniper when United Kingdom-based financial giant Barclays bought it three years ago and later changed its name to Barclaycard. The Wilmington, Del.-based issuer is a wholly-owned subsidiary of Barclays and operates offices in Wilmington and Colorado Springs, Colo.

Barclaycard seeks agents with demonstrated sales techniques, putting them through a four-week training course and continual enforcement and feedback on the quality of their work. Agents also receive score cards on performance during the month and at the end of the month, says Murphy.

Murphy declined to share statistics related to collection activities but says Barclayscard matches up with or beats other issuers on costs and results. Barclayscard outsources a portion of its collections to Tritium Group Inc. in Uniondale, N.Y., says Murphy.