PR - TransUnion Collection Recovery Models Stand the Test of Time

TransUnion today announced at the 12th Annual National Collections & Credit Risk Conference that a revalidation of the company’s collections recovery models confirms that they continue to perform at exceptional levels despite today’s dynamic market conditions.  The incidence-based models, which help collections organizations identify which customers are most likely to repay their debts in order to prioritize work effort, also assist organizations in creating cost-effective treatment strategies based on the likelihood of repayment.

“The revalidation process verifies that our models continue to provide our customers with information that will help them better collect outstanding debt,” said Kevin Derbyshire, director of business consulting for TransUnion. “The models were originally developed to help capture the nuances of collections within certain industries, and the use of these models has proven to be financially beneficial to our customers even during this uncertain economic period.”

The revalidation process included a Population Stability Index (PSI) test, which determined that there was not a significant difference in the scoring distributions between the revalidation population and the initial development sample, resulting in no need for model redevelopment. 

All accounts used in the revalidation study were supplied by current TransUnion clients.  Models created in the original study were derived from data supplied by a diverse consortium of companies and developed by TransUnion’s analytics experts.  The four models included a generic, all-industry model, in addition to three others targeting specific industry segments, including bank and retail cards, auto and installment loans and medical debts.  Each model’s performance had been optimized and tailored to the unique needs and measurements of the industry segment, helping to ensure high recovery rates. 

The revalidation process found that when comparing portfolios specific to bank and retail cards used in the original development sample to a similar portfolio from the revalidation sample, customers would receive tremendous return on investment.  Some of these benefits include:

• Overall recoveries using TransUnion Recovery models increased by $9 million on similar portfolios.
• Of the $1.6 billion placed with the bank and retail card model, a collection agency could potentially recover $1 million more by working the top half of accounts using the Bankcard Industry option instead of TransUnion’s standard recovery model.  In fact, 27.8 percent of payers are found in the top five percent of this group while 88 percent of payers are found in the top half. 

It also was determined that the current generation of TransUnion’s recovery models continue to show improvements over earlier recovery models in separating recovered/non-recovered accounts. 

“TransUnion’s recovery tools truly have impacted the collections industry as companies are better situated to determine collections processes for differing industry segments,” said Bret Crandall, managing partner, Fidelis Recovery Solutions.  “It is especially comforting to see that the models continue to provide statistically relevant information, and in some cases, even more valuable information in today’s market environment.”   

The TransUnion recovery models further complement TransUnion’s comprehensive debt management suite, giving collectors solutions in all phases of the collections lifecycle, from location to prioritization to collection to refinement.  Each solution is supported by the experience and ingenuity of a dedicated team of highly trained professionals and leverages more than 30 years of experience in taking predictive consumer data and integrating it with analytic and decisioning technologies to allow collectors to make actionable decisions.

Along with consultative services, TransUnion offers the following solutions to round out its collection offerings:

• TransUnion Triggers for Collections – allows customers to move old debt to active status, more effectively targeting those accounts most likely to pay.
• TransUnion Collection Prioritization – identifies the accounts from which a collector may recover the most money for the least expense.
• TransUnion Strategy Builder – allows clients to simulate numerous collections strategies while continuing to collect on current accounts.
• TransUnion Contact Locator – increases collections and improves efficiency by utilizing daily updated data from telephone companies, which includes records with current names, addresses and phone numbers.
• TransUnion Market and Credit Data – improves client collections efforts with valuable debtor information.
• TransUnion Collection Credit Report – focuses on credit activities that have occurred within the previous 12 months of an inquiry.

TransUnion’s debt management solutions are available to collections organizations of all sizes across multiple industries.