The vast majority of collection agencies and consumer debt purchasers use traditional collection techniques to recover the amounts owing from debtors. By contrast, our offer to "balance transfer" their debt to a new credit card, gives the debtor a positive way to settle their debt obligation. The settlement amount becomes both the opening balance on the credit card and the customer's initial credit limit. Thus, the customer must make payments to reduce the settlement balance in order to free up available credit for new purchases. The customer pays a reasonable interest rate and fees.
The balance transfer approach typically appeals to consumers who have not responded to a traditional cash collection approach and/or are interested in obtaining a credit card. Our experience is that the balance transfer model is most effective on accounts that have been through two or more agency placements, giving the consumer time to recover from the default, which may have been the result of a "life event" (such as divorce, uninsured medical expenses, or job loss) and who has since stabilized his or her income source.
Once the customer has demonstrated a positive payment history, they become eligible for sale to other credit card companies or inclusion in securitization pools. The process forms a positive cycle as depicted below:
