Debt collectors in a down economy are like yellow jackets in the fall: While their sting is as painful as ever, they have a harder time getting fed and can easily become more frenetic and annoying. "People think this must be the boom time for the debt collection industry, but that is not the case," says Rozanne Andersen of ACA International, the collectors' trade group. "I wouldn't be surprised if our numbers drop." Despite consumer debt growing to unprecedented levels and delinquencies at their highest rates in 16 years, the collection industry was flat between 2005 and 2007, collecting roughly $40 billion a year.
In response, the collections industry is adapting with new strategies designed to wring cash from already-strapped consumers. Collectors are going to court more often. They're using new technologies, like offshore call centers, computer analysis and automated dialers to find debtors....