Asset Acceptance Capital (AACC) tries to help creditors accept the things they cannot change and have the courage to pay off the debt they can. The company buys written-off consumer debt (from credit cards, retailers, and utilities) at a deep discount, then attempts to collect on them. About half of the value of its portfolio is made up of general credit card accounts. AACC focuses on debt in the primary, secondary, and tertiary markets, which means other collection agencies have already attempted to collect on them. These portfolios are often the cheapest to acquire but the hardest to collect on. Tertiary accounts (more than a year past due) make up more than half of its portfolio.
The company maintains relationships with many of the nation's largest lenders so it stays in the running for strategic debt purchases. These purchases may take place by auction or through private negotiations with sellers. Part of its due diligence in bidding includes taking a careful look at the condition of the indebted consumers, including credit bureau data and payment history. As the owner of the debt it collects on, AACC often takes a longer view than third-party agencies that are focused on collecting within just a few months. The company often works with creditors to pay a lump sum or to help formulate a repayment plan.
The economic pressures related to the recession adversely impacted AACC and its collections efforts. High unemployment and consumers' growing inability to repay debt, and the company lost more than $18 million in 2009 and 2010. However, AACC returned to profitability in 2011, as it was able to buy and collect on more paper. The company has also been focused on cutting its costs by operating more efficiently: It has closed three general call centers in the past couple of years, and it exited four legal collection offices. (It will instead outsource certain legal collection efforts.)
The prices for receivables portfolios have gone down due to the increased supply and fewer buyers (again, due to credit problems related to the recession). Buying new portfolios of consumer debt is a part of AACC's strategy and the lower prices for debt portfolios spurred AACC to acquire even more during the recession. The company is also focused on improving operational efficiencies in order to boost collections.
In 2010 AACC stopped buying health care-related debt and dissolved its related Premium Asset Recovery Corporation subsidiary. Also that year it established a new subsidiary, Legal Recovery Solutions, which provides software for the debt collection industry.
Investment firm Quad-C is AACC's largest shareholder, with a 36% stake. – less