Revalidation confirms that tailored models continue to perform well and adapt in current market conditions NEW ORLEANS, March 5 /PRNewswire/ -- TransUnion today announced at the12th Annual National Collections & Credit Risk Conference that arevalidation of the company's collections recovery models confirms thatthey continue to perform at exceptional levels despite today's dynamicmarket conditions. The incidence-based models, which help collectionsorganizations identify which customers are most likely to repay their debtsin order to prioritize work effort, also assist organizations in creatingcost-effective treatment strategies based on the likelihood of repayment. "The revalidation process verifies that our models continue to provideour customers with information that will help them better collectoutstanding debt," said Kevin Derbyshire, director of business consultingfor TransUnion. "The models were originally developed to help capture thenuances of collections within certain industries, and the use of thesemodels has proven to be financially beneficial to our customers even duringthis uncertain economic period." The revalidation process included a Population Stability Index (PSI)test, which determined that there was not a significant difference in thescoring distributions between the revalidation population and the initialdevelopment sample, resulting in no need for model redevelopment. All accounts used in the revalidation study were supplied by currentTransUnion clients. Models created in the original study were derived fromdata supplied by a diverse consortium of companies and developed byTransUnion's analytics experts. The four models included a generic,all-industry model, in addition to three others targeting specific industrysegments, including bank and retail cards, auto and installment loans andmedical debts. Each model's performance had been optimized and tailored tothe unique needs and measurements of the industry segment, helping toensure high recovery rates. The revalidation process found that when comparing portfolios specificto bank and retail cards used in the original development sample to asimilar portfolio from the revalidation sample, customers would receivetremendous return on investment. Some of these benefits include:
-- Overall recoveries using TransUnion Recovery models increased by $9 million on similar portfolios. -- Of the $1.6 billion placed with the bank and retail card model, a collection agency could potentially recover $1 million more by working the top half of accounts using the Bankcard Industry option instead of TransUnion's standard recovery model. In fact, 27.8 percent of payers are found in the top five percent of this group while 88 percent of payers are found in the top half. It also was determined that the current generation of TransUnion'srecovery models continue to show improvements over earlier recovery modelsin separating recovered/non-recovered accounts. "TransUnion's recovery tools truly have impacted the collectionsindustry as companies are better situated to determine collectionsprocesses for differing industry segments," said Bret Crandall, managingpartner, Fidelis Recovery Solutions. "It is especially comforting to seethat the models continue to provide statistically relevant information, andin some cases, even more valuable information in today's marketenvironment." The TransUnion recovery models further complement TransUnion'scomprehensive debt management suite, giving collectors solutions in allphases of the collections lifecycle, from location to prioritization tocollection to refinement. Each solution is supported by the experience andingenuity of a dedicated team of highly trained professionals and leveragesmore than 30 years of experience in taking predictive consumer data andintegrating it with analytic and decisioning technologies to allowcollectors to make actionable decisions. Along with consultative services, TransUnion offers the followingsolutions to round out its collection offerings:
-- TransUnion Triggers for Collections -- allows customers to move old debt to active status, more effectively targeting those accounts most likely to pay. -- TransUnion Collection Prioritization -- identifies the accounts from which a collector may recover the most money for the least expense. -- TransUnion Strategy Builder -- allows clients to simulate numerous collections strategies while continuing to collect on current accounts. -- TransUnion Contact Locator -- increases collections and improves efficiency by utilizing daily updated data from telephone companies, which includes records with current names, addresses and phone numbers. -- TransUnion Market and Credit Data -- improves client collections efforts with valuable debtor information. -- TransUnion Collection Credit Report -- focuses on credit activities that have occurred within the previous 12 months of an inquiry. TransUnion's debt management solutions are available to collectionsorganizations of all sizes across multiple industries. For moreinformation, stop by booth #500 at the National Collections & Credit RiskConference, contact your local TransUnion sales representative or visit thecompany's Web site at
TransUnion Collection Recovery Models Stand the Test of Time
March 05, 2008, 10:30 p.m. EST 5 Min Read
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