VWA Sees Consumer Caution Increase as Debt is Paid Down; 18% Rise in Payment Arrangements

Garden Grove, Calif. – Vengroff, Williams & Associates, Inc., the leading provider of receivables management and business process outsourcing solutions, announced today that the company has seen a significant return, up to 18%, in consumer payment arrangements within their consumer-based portfolios. Most notably, the increase is being documented particularly in medical-related businesses, such as patient liability and subrogation collections, where the average return rates have increased an additional 3% during the past several months.  The increase in consumer and insurance-based payments is not exclusive to the medical subrogation industry.

VWA is also seeing the overall liquidity of retail payments increase with a 1.8% additional gross return on portfolios over a three month period. These retail markets for consumers-based debt include auto, transportation and storage for such clients as U-Haul and MobileMini. Not only are past due balances of greater concern to the consumer, but defaulted accounts are seeing an improvement in payment as well. According to VWA, the consumer appears keen to take steps necessary to make arrangements toward repayment with the end result to improve credit standing as we eventually emerge from this current economic climate.

In addition to the paying down of consumer debt, VWA is seeing improved liquidity in the areas of subrogation with specific reference to medical and insurance subrogation claims recovery.  VWA has been providing property/casualty and medical subrogation to such Fortune 500 companies as FedEx, J.C. Penney and Ford, as well as expects of the insurance industry and self- insured corporate plans since 1970. According to VWA, property damage and medical subrogation claims provide benefits to various industries in reference to working capital.
Recovery for corporate health plans such as large self-funded plans are seeing improvement under VWA, yet the industry, as a whole, is under pressure to recover more dollars and ultimately help corporations reduce health care benefit costs.  By outsourcing the subrogation process, VWA produces a better return, as its expertise in recovery and technology insures best-in-class results.

“Consumers, those who are ultimately responsible for these debts, are rational,” said Robert Sherman, President of Vengroff, Williams and Associates, Inc. “They respond to incentives and conditions, and right now the conditions and incentives are: spend as little as you can, and pay down as much as you can.”

Americans have cut their spending consistently since last year, as they worry about losing their jobs and earning less in a deteriorating economy. The personal saving rate in the last three months of 2008 rose to its highest level in six years. The personal saving rate of 2.9 percent in the fourth quarter of 2008 was the highest since early 2002, when the country was recovering from the dot-com recession and the shock of the 9/11 attacks. The savings rate rose to 3.6 percent in December, from 2.8 percent in November.

VWA expects this significant increase to continue longer term, at least thru the tax season, as consumers typically use refunds to pay down debt.

About Vengroff, Williams & Associates, Inc.
Founded in 1963, and with $23 billion dollars under its management, Vengroff, Williams & Associates is a leading provider of receivables management business process outsourcing (BPO) solutions for Fortune 1000 companies such as Ford Motor Company, Federal Express, Kodak, Microsoft, Yamaha and others. Applying state-of-the-art proprietary information systems, best practice work flow and people to realize cost reductions, operating efficiencies, and improved process design, Vengroff, Williams and Associates’ approach enables clients to easily insource or outsource all or part of the quote-to-cash function. Solutions are customized to each client’s requirements or expanded to incorporate specialized tools and SAS 70 compliant processes and procedures. Services include full order to cash processing, third party collections, EIPP systems, deduction management, dispute management, auto cash solutions, front-end risk mitigation, and tax resolution. Named a Top 21 enterprise-level FAO service provider by FAO Today Magazine and to the Global Services Top 10 in the FAO Category, to learn more about the award-winning Vengroff, Williams and Associates, please visit www.vwainc.com or telephone (866) 393-4892.