A $25 billion problem is getting a lot of headlines these days, but much less analytic attention than it deserves. And often the attention it does get is not remotely the right kind.

The problem is unrecovered credit card losses. At present, the average credit card company picks up just 10 cents in net recoveries per dollar charged off. But if some key weaknesses in current collection processes were recognized and corrected, recoveries could rise measurably, perhaps as much as 20%.

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