In a glass tower on the outskirts of New Delhi, dozens of young Indians are on the telephone, calling out-of-work, forgetful and debt-stricken Americans to ask for cash.
“Are you sure that’s all you can afford?” one operator in a row of cubicles inquires politely.
“Well, how do you take care of your everyday expenses?” presses another.
Americans are used to receiving calls from India for insurance claims and credit card sales. But debt collection represents a growing business for outsourcing companies, especially as the U.S. economy slows and its consumers struggle to pay for their purchases.
Armed with a sophisticated automated system that dials tens of thousands of Americans every hour, and puts confidential information like Social Security numbers, addresses and credit history at the fingertips of operators, this new cadre of collectors is chasing down late car payments, overdue credit card debt and lapsed installment loans. Debt collectors in India often cost about one-quarter the price of their American counterparts, and are often better at the job, debt collection company executives say.
“India will be the only place we grow this year,” said J. Brandon Black, the chief executive of Encore Capital Group, a debt collection company based in San Diego. India is Encore’s largest operating area, with about half the company’s collection force of more than 300.
Although the stereotype of a collector may be “some guy with chains and a cut-off shirt,” Black said, collectors in India are “very polite, very respectful, and they don’t raise their voice.”
“People respond to that,” he added.
Companies like Encore buy bad loans from banks and credit card issuers for pennies on the dollar and pocket the cash they collect. The delinquent borrowers often owe at least a thousand dollars.
So far just a tiny fraction, maybe 5 percent, of U.S. debt collection is done outside…