Bethesda-Based Debt-Collection Specialist Goes Where So Many Have Failed

Despite the demise of a seemingly incalculable number of dot-coms, Marvin Kaulkin recently put the finishing touches on a Web site that he believes will flourish where so many others have failed. His Internet space? The credit and debt-collection industry.

The founder of Bethesda-based Kaulkin Ginsberg Co., Kaulkin is trying to capitalize on the historic level of consumer and commercial debt, which now exceeds $10 trillion in the United States alone, according to the Federal Reserve.

The new site ? CollectionIndustry.com ? is designed to help the more than 1 million creditors and lending institutions, as well as the third-party collectors on which the $1.56 trillion credit-card industry relies, manage and collect the debt.

?Our goal is to be the major source of information for these markets,? Kaulkin said.

Debt?s water cooler

Kaulkin, 70, has listed more than 10,000 firms that support the credit-management and debt-collection sector on the Web site. He calls it the most aggressive resource for the credit and debt-collection industry ever produced.

Companies can use the Web site for free, after formally registering. Outside firms can find collection agencies based on geography, average balance accepted and the focus of expertise.

For example, a wireless company looking for a debt collector in Oregon that specializes in telecommunications can find about 100 eligible companies in the directory.

?We wanted to create an environment where these people can find each other,? Kaulkin said. ?We are optimistic we can attract a substantial audience of granters and lenders.?

With most of the technical data finally in place, Kaulkin now turning his focus to possible sponsorships, advertising and other sources of revenue for the Web site. Funding for the Web site comes from Kaulkin Ginsberg?s investment-banking business, and Kaulkin said paid advertising helps ?pay some bills,? but is not vital to the site.

?It is not designed to make us rich. We developed it to provide a service that did not really exist before,? he said.

Joseph S. Kotula, director of business development for Amerix Corp., a Columbia company that providers customer service and information to credit-counseling agencies, uses the Web site primarily to get updated news about the industry. Kotula says the information comes via e-mail and often provokes discussion among his colleagues.

?It is great from the standpoint that it condenses information for you,? Kotula said. ?It really covers the industry from A to Z.?

Firm evolution

Kaulkin founded Kaulkin Ginsberg 11 years ago, recognizing an opportunity in helping the debt industry consolidate. The firm, which now employs 12 people, has advised on more than 70 mergers and acquisitions in the industry, valued at more than $1 billion.

The debt-collection industry has not been so good for everyone. For instance, Creditrust Corp., a Woodlawn-based company that purchased delinquent credit card accounts and earned money by collecting on them, endured a slew of problems before finally filing for Chapter 11 bankruptcy protection last year (Ft. Washington, Pa., firm NCO Group Inc. bought Creditrust last fall.).

Kaulkin Ginsberg has yet to encounter such problems. Kaulkin claims that his privately held company has outperformed some of the nation?s largest investment-banking companies.

Kaulkin Ginsberg maintains a broad portfolio of clients, ranging from privately held family businesses to Fortune 500 companies such as GE Capital and Deluxe Corp. Kaulkin says the firm has dominated the industry, where 25 percent of the revenue goes to firms that did not even exist as recently as five years ago.

?We got into debt collection because we got a referral to sell a company in Beltsville,? Kaulkin said. ?It was not a huge firm, but it was very visible. We then looked at the industry and saw that it was fragmented. It did not have a lot of history. We decided it was a good place to live for a while, so we went out to conquer the industry.?