No Change for TSYS Debt Group Following Spin Off

TSYS Debt Management begins 2008 in a “business as usual” mode, despite the fact its parent has been spun off as an independent publicly traded firm. 

President Charles “Chuck” Kinney tells insideARM.com the Atlanta-based collector continues to serve customers through its National Attorney Network service, a Bankruptcy Management division, and a Probate Management division.

Synovus completed the spin off of its more than 80 percent holding in its subsidiary TSYS at the end of 2007. Columbus, Ga.-based TSYS provides card processing and other back office services for financial institutions. It reported revenues of $1.3 billion in the first nine months of 2007.

The spin off means TSYS Debt Management (TDM) will have greater opportunities to make acquisitions, said Kinney, though he stressed that his firm is “not searching for any at this time.”

Kinney is focused on running NAN, a listing of more than 170 law firms nationwide that creditors can draw on when opting for legal collections. In the last four years, the network has routed over two million accounts where collectors garnered more than $1 billion, said Kinney.

“We vet the legal firms and ensure our clients receive the best performance. Our Website allows our clients to view the performance of the collectors on a daily basis,” said Kinney. TDM also conducts on-site audits of the law firms every year.

Legal collections are a burgeoning field, growing at an annual rate of 16 percent between 2004 and 2006, according to the 7th Edition of The Kaulkin Report published last September.

“The need for legal collections will increase,” said Kinney. “Frankly, with the economy right now, we expect more clients will place more business in the legal stream.”

The NAN earns a percentage of the amount collected by the law firms, with the rate determined by the client’s volume. It doesn’t get paid unless funds are collected.

TDM doesn’t release details on clients or revenues. Still it’s not surprising it works in credit card debt considering its parent TSYS is one of the largest card processors in the country. TDM also works in auto, mortgages, some commercial, and plans to begin testing in the healthcare segment in the second quarter, said Kinney.