[GURGAON, India — In a glass tower on the outskirts of New Delhi, dozens of young Indians are on the telephone, calling America’s out of work, forgetful and debt-stricken and asking for cash.
Armed with a sophisticated automated system that dials tens of thousands of Americans every hour, and puts confidential information like Social Security numbers, addresses and credit history at operators’ fingertips, this new breed of collectors is chasing down late car payments, overdue credit card debt and lapsed installment loans. Debt collectors in India often cost about one-quarter the price of their American counterparts, and are often better at the job, debt collection company executives say.
Companies like Encore buy bad loans from banks and credit card issuers for pennies on the dollar and pocket the cash they collect. The delinquent borrowers often owe at least a thousand dollars.
Telephone debt collection represents new, more aggressive territory for India. “This is really a sales job,” Mr. Hughes said. “It is commission-intensive, and you’re paid on your ability to collect.”
Just over 4.5 percent of all bank credit card accounts were delinquent in the fourth quarter of 2007, according to the Federal Reserve, up from 3.5 percent two years before. Businesses in the United States put $141 billion in delinquent consumer debt up for collection in 2005, according to a PriceWaterhouseCoopers survey commissioned by an industry group, and debt collection agencies collected $51 billion that year. They kept nearly a quarter of that in profits.
Encore pays its collectors in India an average base salary of 17,000 rupees ($425) a month, and they earn bonuses — sometimes more than $1,000 a month — for getting customers to pay. In contrast, collectors in the United States, make about $6,500 a month. Thanks to the income, a windfall in India, where the average monthly income is $63, collectors are amassing some of the status symbols that probably got their clients into trouble in the first place — new scooters, iPods, Swatch watches and exotic vacations.]-NYT
