Encore Capital Group
Encyclopedia
Encore Capital Group, Inc. is a systems-driven purchaser and manager of charged-off
consumer receivable portfolios, or a debt buyer
, and is the largest publicly-traded debt buyer
(by revenue
) in the United States. Founded as Midland Credit Management, Inc. in 1953, the company was renamed Encore Capital Group, Inc. in 2002. Encore Capital is headquartered in San Diego, California
, and is a publicly traded NASDAQ
Global Select company and a component stock of both the Russell 2000
and Wilshire 4500
.
, Midland Credit Management, Inc., was founded in 1953 and was incorporated in Kansas in September 1953. In 1998, an investor group led by Nelson Peltz
and Peter May (members of Triarc Companies, Inc. management) and Kerry Packer
of Consolidated Press International Holdings Limited, acquired a majority interest in its operations. In 1999, this investor group formed a holding company
, MCM Capital Group, Inc., which was later renamed Encore Capital Group, Inc. in April 2002.
The company was incorporated in Delaware
in April 1999 as MCM Capital Group, Inc. and changed its name to Encore Capital Group, Inc. in April 2002. The company completed its initial public offering
of 2,250,000 shares of common stock in July 1999.
at deep discounts to face value
and uses a variety of operational channels to maximize its collections from these portfolios. It specializes in the collection, restructuring, resale, and securitization
of the acquired receivable portfolios. The company manages its receivables by partnering with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, auto finance companies, and telecommunication companies, and may also include receivables subject to bankruptcy proceedings, or consumer bankruptcy receivables.
Encore Capital has one of the industry’s largest distressed consumer databases containing information regarding approximately 20 million consumer accounts. From inception through December 31, 2010, the company has invested approximately $1.8 billion to acquire 33.0 million consumer accounts with a face value of approximately $54.7 billion.
In addition, Encore Capital provides bankruptcy support services to some of the largest companies in the financial services industry through its wholly owned subsidiary, Ascension Capital Group, Inc. Leveraging a proprietary software platform dedicated to bankruptcy servicing, Ascension’s operational platform integrates lenders, trustees, and consumers across the bankruptcy lifecycle.
In 2009, Encore Capital was ranked in the top 10% of San Diego County public companies for financial performance in the Bloomberg Company Strength Index (released on March 12, 2010)
, which is the Corporate headquarters
for its operations.
Additional offices: The company's operations include sites in
The company currently employs about 1,900 people (as of December 31, 2010) across these locations, and additionally possesses a large third-party network of collection agency
and litigators that spans the United States
. Total employment in India increased 36 percent in 2010 to 1,213 while total employment in the U.S. increased 7.3 percent to 678.
The company has recently hired Steve Gonabe as Senior VP, Human Resources and Brian Enneking as VP, Consumer Marketing.
The Company's revenue
increased 21% in 2010 to $381.308 million. Gross
collection increased to $604.6 million in 2010, a 24% increase from 2009. Collection sites accounted for $268.2 million, while legal collections accounted for $266.7 million. External collection agency forwarding accounted for $68 million in gross collections.
Key tenets of the Bill of Rights include:
Charge-off
A charge-off or chargeoff is the declaration by a creditor that an amount of debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt. Traditionally, creditors will make this declaration at the point of six months without payment...
consumer receivable portfolios, or a debt buyer
Debt buyer
A debt buyer is a company, sometimes a collection agency or a private debt collection law firm, that purchases delinquent or charged-off debts from a creditor for a fraction of the face value of the debt...
, and is the largest publicly-traded debt buyer
Debt buyer
A debt buyer is a company, sometimes a collection agency or a private debt collection law firm, that purchases delinquent or charged-off debts from a creditor for a fraction of the face value of the debt...
(by revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
) in the United States. Founded as Midland Credit Management, Inc. in 1953, the company was renamed Encore Capital Group, Inc. in 2002. Encore Capital is headquartered in San Diego, California
San Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...
, and is a publicly traded NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
Global Select company and a component stock of both the Russell 2000
Russell 2000
The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index.The Russell 2000 is by far the most common benchmarkfor mutual funds that identify themselves as "small-cap",...
and Wilshire 4500
Wilshire 4500
The Wilshire 4500 Completion Index, more commonly the Wilshire 4500, is a market capitalization-weighted index of all stocks actively traded in the United States with the exception of the stocks included in the S&P 500 index...
.
History
Encore Capital Group’s wholly owned operating subsidiarySubsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
, Midland Credit Management, Inc., was founded in 1953 and was incorporated in Kansas in September 1953. In 1998, an investor group led by Nelson Peltz
Nelson Peltz
Nelson Peltz is an American businessman. He is a board director of Wendy's Group, the franchise parent of T.J. Cinnamons, Pasta Connection and Wendy's. Peltz is the former owner of Snapple.- Background :...
and Peter May (members of Triarc Companies, Inc. management) and Kerry Packer
Kerry Packer
Kerry Francis Bullmore Packer, AC was an Australian media tycoon. The son of Sir Frank Packer and Gretel Bullmore, the Packer family company owned controlling interest in both the Nine television network and leading Australian publishing company Australian Consolidated Press, which were later...
of Consolidated Press International Holdings Limited, acquired a majority interest in its operations. In 1999, this investor group formed a holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
, MCM Capital Group, Inc., which was later renamed Encore Capital Group, Inc. in April 2002.
The company was incorporated in Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
in April 1999 as MCM Capital Group, Inc. and changed its name to Encore Capital Group, Inc. in April 2002. The company completed its initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
of 2,250,000 shares of common stock in July 1999.
Business
Encore Capital purchases portfolios of defaulted consumer receivablesReceivables
Receivables may refer to the amount due from individuals and companies. Receivables are claims that are expected to be collected in cash. These are frequently classified as:...
at deep discounts to face value
Face value
The Face value is the value of a coin, stamp or paper money, as printed on the coin, stamp or bill itself by the minting authority. While the face value usually refers to the true value of the coin, stamp or bill in question it can sometimes be largely symbolic, as is often the case with bullion...
and uses a variety of operational channels to maximize its collections from these portfolios. It specializes in the collection, restructuring, resale, and securitization
Securitization
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds, pass-through securities, or Collateralized mortgage obligation , to...
of the acquired receivable portfolios. The company manages its receivables by partnering with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers’ unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, auto finance companies, and telecommunication companies, and may also include receivables subject to bankruptcy proceedings, or consumer bankruptcy receivables.
Encore Capital has one of the industry’s largest distressed consumer databases containing information regarding approximately 20 million consumer accounts. From inception through December 31, 2010, the company has invested approximately $1.8 billion to acquire 33.0 million consumer accounts with a face value of approximately $54.7 billion.
In addition, Encore Capital provides bankruptcy support services to some of the largest companies in the financial services industry through its wholly owned subsidiary, Ascension Capital Group, Inc. Leveraging a proprietary software platform dedicated to bankruptcy servicing, Ascension’s operational platform integrates lenders, trustees, and consumers across the bankruptcy lifecycle.
In 2009, Encore Capital was ranked in the top 10% of San Diego County public companies for financial performance in the Bloomberg Company Strength Index (released on March 12, 2010)
Locations
Encore Capital Group is based in San Diego, CaliforniaSan Diego, California
San Diego is the eighth-largest city in the United States and second-largest city in California. The city is located on the coast of the Pacific Ocean in Southern California, immediately adjacent to the Mexican border. The birthplace of California, San Diego is known for its mild year-round...
, which is the Corporate headquarters
Corporate headquarters
Corporate headquarters is a term used to describe the entity at the top of a corporation to take full responsibility for the overall success of the corporation, ensures Corporate Governance...
for its operations.
Additional offices: The company's operations include sites in
- Phoenix, ArizonaPhoenix, ArizonaPhoenix is the capital, and largest city, of the U.S. state of Arizona, as well as the sixth most populated city in the United States. Phoenix is home to 1,445,632 people according to the official 2010 U.S. Census Bureau data...
- St. Cloud, MinnesotaSt. Cloud, MinnesotaSt. Cloud is a city in the U.S. state of Minnesota and the largest population center in the state's central region. The population was 65,842 at the 2010 census. It is the county seat of Stearns County...
- Arlington, TexasArlington, TexasArlington is a city in Tarrant County, Texas within the Dallas–Fort Worth metropolitan area. According to the 2010 census results, the city had a population of 365,438, making it the third largest municipality in the Metroplex...
- GurgaonGurgaonGurgaon is the second largest city in the Indian state of Haryana. Gurgaon is the industrial and financial center of Haryana. It is located 30 km south of national capital New Delhi, about 10 kilometers from Dwarka Sub City and 268 km south of Chandigarh, the state capital...
, National Capital Region, India
The company currently employs about 1,900 people (as of December 31, 2010) across these locations, and additionally possesses a large third-party network of collection agency
Collection agency
A collection agency is a business that pursues payments of debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed....
and litigators that spans the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Total employment in India increased 36 percent in 2010 to 1,213 while total employment in the U.S. increased 7.3 percent to 678.
Leadership Team
Encore Capital’s management team comprises:- J. Brandon Black, President and CEO
- Paul Grinberg, Executive VP and CFO
- Jim Syran, Senior VP, Operations and Chief Marketing Officer
- Christopher Trepel, Ph.D., Senior VP, Corporate Strategy and Analytics
- Ashish Masih, Senior VP, Legal Collections Operations
- Ronald E. Naves, Jr., Senior VP, General Counsel and Corporate Secretary
- Olivier Baudoux, Senior VP, Information Technology and CIO
- Blair Korschun, Senior VP and General Manager, Ascension Capital Group
The company has recently hired Steve Gonabe as Senior VP, Human Resources and Brian Enneking as VP, Consumer Marketing.
Financials
In 2010, Encore Capital paid $362 million, to purchase $10.9 billion in face value of debt, compared to $256.6 million, to purchase $6.5 billion in face value of debt in 2009. Of this $362 million, $342 million was spent on credit card portfolios, $12.2 million on consumer bankruptcy accounts, and $7.8 million on telecom accounts.The Company's revenue
Revenue
In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover....
increased 21% in 2010 to $381.308 million. Gross
Gross (economics)
In economics, gross means before deductions. The antonym is net, meaning after deductions.-Usage:In this sense, it may appear an adjective, following the noun it modifies, e.g., "earned two million dollars, gross"...
collection increased to $604.6 million in 2010, a 24% increase from 2009. Collection sites accounted for $268.2 million, while legal collections accounted for $266.7 million. External collection agency forwarding accounted for $68 million in gross collections.
Consumer Bill of Rights
Encore Capital has launched an industry-first Consumer Bill of Rights, a document that codifies the company's commitment to conduct business ethically, engage in respectful and constructive dialogue with consumers, and play a positive role in consumers' financial recovery.Key tenets of the Bill of Rights include:
- Contacting consumers in a timely and effective manner, resolving accounts quickly and honestly, and ensuring collection practices that promote settlement and preserve dignity;
- Establishing forgiveness and hardship guidelines, including the cessation of collection efforts when permanent hardship is demonstrated;
- Suspending interest or fees when a consumer is making timely payments on an established plan;
- Safeguarding consumer information;
- Implementing the fair and reasonable use of litigation to resolve an outstanding obligation, and seeking to avoid litigation whenever possible; and
- Committing to not resell defaulted consumer accounts in the normal course of business.
Subsidiaries
- Midland Credit Management, Inc. - KansasKansasKansas is a US state located in the Midwestern United States. It is named after the Kansas River which flows through it, which in turn was named after the Kansa Native American tribe, which inhabited the area. The tribe's name is often said to mean "people of the wind" or "people of the south...
- MRC Receivables Corporation - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
- Midland Funding NCC-2 Corporation - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
- Midland Portfolio Services, Inc. - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
- Midland Funding LLC - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
- Ascension Capital Group, Inc. - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
(Bankruptcy Servicing) http://www.insidearm.com/daily/debt-buying-topics/debt-buying/encore-capital-group-acquires-bankruptcy-service-provider-ascension-capital-group-ltd-for-22-million/ - Midland India LLC - MinnesotaMinnesotaMinnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...
- Midland Credit Management India Private Limited - Delhi, India
- Midland International LLC - DelawareDelawareDelaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
- Midland Credit Management (Mauritius) Ltd - MauritiusMauritiusMauritius , officially the Republic of Mauritius is an island nation off the southeast coast of the African continent in the southwest Indian Ocean, about east of Madagascar...