Although it is much harder to recover debt from a defaulted consumer especially in this time of recession, but some debt collectors that have found new ways to draw more revenue from bad debt and increase the value of their shares.

The performances of two debt collection firms have improved significantly. The Encore Capital Group Inc. and Portfolio Recovery Associates Inc. collected 10% and 13% more consumer debt, as compared to the previous year.

The industry revenue levels are forecasted to drop $200 million by the end of 2009, to approximately $14.2 billion according to analysts at IBISWorld.

The companies have used a number of methods to gain this achievement. They have done this by buying debt from distressed creditors and banking institutions for little more than 5 cents on the dollar, increasing call frequency to the indebted, and keeping a close eye on even the smallest fluctuations of credit scores.

The truth is that even the slightest increase can yield huge returns for debt collectors. The shares in Encore have nearly quadrupled since early March and have traded in the $12-$13 range. For Portfolio Recovery, the same periods yielded share values on the trade floor of between $37 and $39 for most of June

The major reason behind this growth is the supply of bad debt. The prices dropped when banks and other issuers of credit wrote off literally billions of dollar in bad debt both in 2008 and this year.

Many different approaches are used by the debt recovery firms for fund recovery, such as phone calls, mailings, and, sometimes, lawsuits. The Lawyers of Portfolio Recovery managed to recoup $3.5 million in the first quarter through suits.

The basic productivity of both Portfolio Recovery and Encore has gone up as well. The average collection agent at Encore is able to recover as much as $49,000 each month. This is up from $38,000 a month as compared to the previous year.

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