Collector – August 2019 - 39

BUSINESSOPERATIONS

and income taxes, the federal debt
collection marketplace also presents an
attractive opportunity for PCAs that
are not currently federal contractors or
subcontractors. Federal-sector collection
opportunities constitute the largest
prospective expansion opportunity for
the ARM industry since the credit card
market boom in 1990s, offering PCAs a
substantial revenue stream as other mature
creditor markets become overly saturated.
To capture these opportunities, PCAs
must begin to position themselves to
proactively create relationships with federal
agencies. The industry must shift from a
passive, wait-and-see RFP procurement
approach to a more active relationship-based
sales model.

Regardless of the agency and portfolio, the
government generally has three broad options
to recover receivables and delinquencies:
1. Engage in internal governmentinitiated collection efforts;
2. Outsource efforts to private collection
agencies (PCAs); or
3. Do nothing and wait for debts to "roll
off the books" due to federal statutes of
limitation.
Due to congressional mandates and
to mitigate lost revenue, the government
awarded a variety of lucrative debt collection
contracts-most notably DOE, IRS, Treasury,
and the Department of Health and Human
Services, to name a few-to PCAs. However,
federal data indicate massive amounts of
additional federal debt are not currently under
collection, representing a large and worthwhile
opportunity for PCAs now and in the future.
With several hundred different
debt types beyond student loans

allowance for uncollectible amounts grew
over time, increasing 5.6% annually, on
average, from $59 billion in 2000 to the
aforementioned nearly $150 billion in 2017.
The remaining major segment, nontax and non-DOE delinquencies, which
is comprised of other federal agencies
(e.g., U.S. Department of Agriculture or
U.S. Department of Defense) presents a
tremendous opportunity for collection
agencies and other ARM firms. Not only
is there significant diversity within this
segment-a contract from USDA may deal
with different debt than that of DOD-but it
is also sizable, amounting to just shy of $35
billion in 2017.
Additionally, different agencies have
varying levels of collection efficiencies, with
some needing large business processing
efforts while others simply necessitating-
and restricted to contracting with-small
mom-and-pop firms.

Mike Ginsberg is president/CEO of Kaulkin
Ginsberg Company. He can be reached at
mike@kaulkin.com.

Federal Government Delinquencies &
Allowances for Uncollectible Amounts
$350
$300

$Billions

$250
$200
$150
$100
$50

ED Delinquencies
Non-IRS, Non-ED Delinquencies

COLLECTOR 08.19

17

20

16

20

15

20

14

20

13

20

12

11

20

10

20

09

20

08

20

20

07

20

06

20

05

20

04

20

03

20

02

20

01

20

20

00

$0

IRS Allowance for Uncollectible Amounts
Source: Fed Debt Opps & Federal Government

39



Collector – August 2019

Table of Contents for the Digital Edition of Collector – August 2019

President’s Page
Industry News
Best Practices
FYI
Collection Tips
How a background in making people laugh has helped Roger Weiss, ACA’s new president, educate and engage an industry.
No Good Option
“You’ve got to be a compliance cheerleader for the organization, and that takes a lot of energy.”
Protecting Health Care Data
Calendar
Honor Roll
Education Spotlight
ACA SearchPoint
Ad Index
Membership
Last Word
Collector – August 2019 - Cover1
Collector – August 2019 - Cover2
Collector – August 2019 - 1
Collector – August 2019 - 2
Collector – August 2019 - 3
Collector – August 2019 - 4
Collector – August 2019 - President’s Page
Collector – August 2019 - Industry News
Collector – August 2019 - 7
Collector – August 2019 - 8
Collector – August 2019 - 9
Collector – August 2019 - Best Practices
Collector – August 2019 - 11
Collector – August 2019 - FYI
Collector – August 2019 - 13
Collector – August 2019 - Collection Tips
Collector – August 2019 - 15
Collector – August 2019 - How a background in making people laugh has helped Roger Weiss, ACA’s new president, educate and engage an industry.
Collector – August 2019 - 17
Collector – August 2019 - 18
Collector – August 2019 - 19
Collector – August 2019 - 20
Collector – August 2019 - 21
Collector – August 2019 - 22
Collector – August 2019 - 23
Collector – August 2019 - No Good Option
Collector – August 2019 - 25
Collector – August 2019 - 26
Collector – August 2019 - “You’ve got to be a compliance cheerleader for the organization, and that takes a lot of energy.”
Collector – August 2019 - 28
Collector – August 2019 - 29
Collector – August 2019 - Protecting Health Care Data
Collector – August 2019 - 31
Collector – August 2019 - 32
Collector – August 2019 - 33
Collector – August 2019 - Calendar
Collector – August 2019 - Honor Roll
Collector – August 2019 - Education Spotlight
Collector – August 2019 - 37
Collector – August 2019 - 38
Collector – August 2019 - 39
Collector – August 2019 - 40
Collector – August 2019 - 41
Collector – August 2019 - 42
Collector – August 2019 - 43
Collector – August 2019 - 44
Collector – August 2019 - 45
Collector – August 2019 - 46
Collector – August 2019 - 47
Collector – August 2019 - ACA SearchPoint
Collector – August 2019 - Ad Index
Collector – August 2019 - Membership
Collector – August 2019 - 51
Collector – August 2019 - Last Word
Collector – August 2019 - Cover3
Collector – August 2019 - Cover4
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