Collection Agencies NAICS 561440

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Industry Summary
The 2,750 collection agencies in the US collect and remit payments to clients. Major revenue categories include individual debt collection and commercial debt collection. Other services include factoring accounts receivables, bankruptcy assistance, and collateral recovery. Large firms may also be debt buyers. Companies involved in mortgage collections may also provide lending services.
Uncertainty in Collections
Defaulted receivables are difficult to collect.
Highly Regulated
The collection industry is heavily regulated by federal, state, and local laws.
Recent Developments
May 2, 2025 - Student Loan Collections Resume
- About 5 million student loan borrowers will have their outstanding balances sent to collection agencies by the Department of Education on May 5, potentially negatively affecting credit scores for millions. If a student loan borrower hasn’t made a payment in more than 270 days the loan is considered in default. When that happens with a federal student loan, the government can send it for collections, garnish wages, or take Social Security funds or income tax refunds. The situation dates back to President Biden pausing student loan payments for 12 months in 2023, and did not count late payments towards default. That moratorium ended in October 2024, and with the announcement of collections resuming under Trump, almost 9 million student loan borrowers will automatically be deemed delinquent in their payments. Delinquency can cost a borrower an average of 170 points on their credit rating, per the New York Federal Reserve.
- The Conference Board’s Consumer Confidence Index fell 7.2 points to 92.9 in March 2025, the fourth straight month the index has fallen, reflecting consumer worries about a weak market, future employment, and salary growth. Confidence in the stock market in particular was down for the first time in two years. Only 37% of consumers expected stock prices to rise in 2025, while 44% expected them to go down. The Expectations Index - based on consumers’ short-term outlook - dropped 9 points to 65.2 (anything below 80 historically usually indicates a coming recession). According to Conference Board economist Stephanie Guichard, “Consumers’ optimism about future income - which had held up quite strongly in the past few months - largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”
- Credit card delinquencies held steady at 3.11% in the fourth quarter of 2024, according to the Federal Reserve. While delinquencies seem to have plateaued, they remained at a 13-year high. Credit card delinquencies tend to be a six-to-nine-month early indicator of credit card charge-offs. Credit card charge-offs – when a credit card company writes off an unpaid loan as a loss and reports it to a credit agency – reached an 11-year high in the fourth quarter of 2024. Charge-offs in Q4 2024 reached 6.36%, up almost 2% from the previous quarter. As charge-off placements lag by 9-12 months, they are expected to continue rising through at least mid-2025.
- In September 2024, the Consumer Financial Protection Bureau’s (CFPB) annual report to Congress outlined key trends in consumer debt collection complaints. In all, the CFPB received 109,900 debt collection complaints in 2023. In the case of 63% of the complaints, the CFPB contacted the company for a review and response, 28% were referred to other regulatory agencies, and 9% were not actionable. Nearly all (97%) of the debt collection complaints sent to companies by the CFPB for review and response received a response. Among those, 80% were closed with an explanation, and 15% were closed with non-monetary compensation. About 23% of debt collections complaints were about credit card debt, followed by medical debt (11%), auto debt (5%), telecommunications debt (3%), rental debt (3%), payday loan debt (2%), mortgage debt (1%), private student loan debt (0.7%), and public student loan debt (0.6%). A quarter of consumer debt collection complaints were classified as “other debt,” and for 27% of debt complaints, consumers were not sure about the type of debt. At 53% of all complaints, attempts to collect debt not owed was the most common complaint issue, followed by written notification about debt (19%), threats of negative or legal action (10%), false statements (8%), and communication tactics (7%).
Industry Revenue
Collection Agencies

Industry Structure
Industry size & Structure
The average collection agency operates out of a single location, employs about 40-45 workers, and generates $4.5 million annually.
- The collection agency industry consists of about 2,750 firms that employ 114,500 workers and generate about $12.6 billion annually.
- The industry is concentrated at the top and fragmented at the bottom, with about 75% of companies having 20 or less employees.
- Large companies with debt collection operations include Onity Group (formerly Ocwen Financial), Encore Capital Group, Alorica, iQor, and Portfolio Recovery Associates. Large firms may have operations in foreign countries.
- The census definition of collection agencies excludes debt buyers, although some large agencies also purchase debt. The debt buying market is concentrated.
- The main sources of debt include health care, credit card/financial, utilities/telecommunications, student loans, and commercial and government debt.
- The majority of industry revenue - about 85% - comes from debt collection of individual consumers.
Industry Forecast
Industry Forecast
Collection Agencies Industry Growth

Source: Vertical IQ and Inforum
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