Third-party debt collectors recovered $55.2 billion last year for creditor and government clients, returning to them an estimated $45 billion and keeping some $10.4 billion in commission and fees, according to findings from a survey by ACA International and Ernst & Young.

The survey shows that the health of national and state economies continues to rely on the recovery of consumer debt, according to ACA, the largest association for collection agencies. But it also indicates that only a small percentage of outstanding consumer debt actually was recovered in 2013. Ernst & Young surveyed an estimated 300 collection agencies this spring and used public data from the U.S. Census and The North American Industry Classification System.

Medical debt (hospitals, physician groups and clinics) ranked as the largest debt category, accounting for nearly 38% of all debt collected. U.S. hospitals provided $45.9 billion in uncompensated care in 2012, representing 6.1% of annual hospital expenses, according to the American Hospital Association. Student loan debt trailed medical debt with more than a quarter of all debt collected, followed by credit card debt (approximately 10% of the total).

Key findings from the survey include:

    •    Job Creation: Third-party collection agencies directly employed more than 136,000 people, with a payroll of $6.4 billion. Indirectly, the industry influenced the creation of more than 230,000 jobs, with a payroll of $12.4 billion.

    •    Outstanding Debt: Third-party debt collectors received approximately one billion consumer accounts from creditor clients in 2013, with a face value of $756 billion. Just 7% ($55.2 billion) was actually recovered.

    •    Recovering Assets: The $55.2 billion recovered from consumers provides a valuable benefit to U.S. households by returning an average savings of $479 per household and keeping the costs of goods and services lower.

    •    Paying Taxes: Third-party collection agencies and their employees paid more than $2.6 billion in federal, state and local taxes. 

    •    Giving Back: Third-party collection agencies and their employees contributed $130.5 million and volunteered approximately 1.9 million hours to charitable community causes.

ACA started its economic impact studies in 2004 with the help of PriceWaterhouse Coopers.

To review the ACA/Ernst and Young report, "The Impact of Third-Party Debt Collection to the National and State Economies," visit: www.acainternational.org/impact.

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