Study Confirms Benefit of Web Channel for Debt Collections

CHANTILLY, VA ? Online Resources Corp. (Nasdaq: ORCC), a leading outsourcer of Internet financial services, today announced that a top three credit card issuer has achieved an improvement of 310 basis points in reduction of losses by using its online collections product. The results were gleaned from a five-month control group assessment of account holders who were offered and accessed a web site to resolve their delinquent accounts over those who were not offered an online method.

The results also showed the effectiveness of the collections web site in reaching delinquent account holders who were unreachable by phone, particularly for late stage accounts, which are past due between 90-180 days. In addition, late stage account holders who were offered and accessed the web site paid at a higher rate than those who were not offered the web site, and they required less phone contact.

The online collections product provides a fully branded, 24×7 online environment where delinquent account holders can privately apply for and enroll in rules-based payment programs, make a payment, schedule a future payment, make a promise-to-pay, verify contact information, and schedule an appointment to speak with an agent.

Specifically, key results showed:

• Overall, loss avoidance for delinquent account holders that accessed the web site increased by 310 basis points compared to those who were not offered this option (31.70% versus 34.80%). Based on these results, savings for an organization with $50 million in delinquent outstandings would be $3.1 million annualized;
• The online collections option showed effectiveness in engaging unreachable delinquent account holders: 44.7% of the collections web site visitors were unreachable by phone. Within this group, 69% were late stage accounts; and
• Late stage account holders that accessed the web site had a 9% reduction in phone contacts, and a 7.8% increase in payments received.

“The results of this study show online collections is well accepted by account holders, effective in helping them manage their delinquency in a low-confrontational and convenient manner, and provides strong potential for operational savings,” said Bill Kinnelly, president of Online Resources’ Card & Credit Services Division. “We believe many of the results also show promise for collection agencies, holders of consumer loan portfolios and debt buyers.”

More information about the results of this study are included in a white paper titled, “Incurrent Collections: Champion Challenger Results,” which is available by emailing incurrent@orcc.com or by calling Beth Halloran at Online Resources, 703.653.2248.