Despite the ubiquity of credit cards, it was not until the mid-1990s that a large share of lower-income Americans gained access to these useful financial products, which enable cost-saving consumer purchases, small business financing, and economic inclusion. High credit card debt, of course, can cause individual harm, and on the aggregate, booming household debt levels are a serious policy concern. Yet credit card balances account for just 6 percent of U.S. household debt levels, and as a share of disposable personal income fell from nearly 8 percent in the mid-2000s to 5.3 percent in 2015. We identify regressive trends driving decreased card usage, including that between 2007 and 2015, originations to lower-score accounts (generally lower-income consumers) fell 50 percent, and average credit card lines for these accounts shrunk 31 percent, likely forcing down card utilization. Lower-income Americans increasingly lack credit cards.Read More »
– Bill Provides Greater Transparency and Quicker Resolution of Identity Theft and Fraud Claims –
SAN DIEGO, Calif., January 28, 2016 — Encore Capital Group, Inc. (NASDAQ: ECPG), a San Diego-based international specialty finance company, announced today that it is partnering with California State Assemblyman Bill Dodd (D-Napa) on consumer-focused legislation to provide prompt relief for victims of identity theft or fraud and to raise debt collection industry standards.
According to the Bureau of Justice Statistics, there were 17.6 million adult victims of identity theft in the United States in 2014 – that is a victim roughly every two seconds. “This legislation works to address many of the challenges associated with identity theft, ultimately providing more transparency and faster resolution for Californians,” said Sheryl Wright, Encore Capital Group’s Senior Vice President of Corporate & Government Affairs.Read More »
— Legislation Would Help Millions of Americans on Their Path to Financial Well-Being —
SAN DIEGO, July 21, 2015 (GLOBE NEWSWIRE) — Encore Capital Group, Inc. (NASDAQ:ECPG), an
international specialty finance company, announced today that it has taken its consumer-centric focus to a new level by collaborating with U.S. Reps. Scott Peters (CA-52) and Duncan Hunter (CA-50) to create a bill that would exempt up to $2,500 worth of forgiven personal and household debt from federal taxation. The bill (H.R. 2640) was recently introduced as the “Consumer Debt Forgiveness Tax Relief Act of 2015.”
A new study by Encore Capital Group’s Consumer Credit Research Institute and the Urban Institute finds that thirty-five percent of American adults has a debt—such as a credit card balance, medical, or utility bill—so far past due that the account has been placed in collections. The study reports that these 77 million Americans owed an average of $5,200 in September 2013.
A second report indicates that average total debt in America stood at $53,850 in September 2013, among people with credit files. Average debt among people with mortgages was $209,768, while it was $11,592 for those without mortgages.
“Although household debt is a significant challenge for tens of millions of Americans, it has received surprisingly little attention compared to other financial matters,” said Christopher Trepel, chief scientific officer at Encore Capital Group and managing director of the Consumer Credit Research Institute. “This study establishes a new fact base from which to ask important questions related to consumer financial distress, and advances our understanding of household balance sheets and the spatial patterns of debt holding in the United States.”
Partial list of press coverage for this research:Read More »
We recently gave a presentation summarizing some of our latest research across a number of different areas, including the psychological characteristics of prime and subprime consumers, the ways in which people recover from financial shocks, the geographic distribution of U.S. consumer debt, and the efficacy of financial literacy interventions. Our data shed new light on consumer decision making, and the results were discussed in the contexts of collections and the evolving consumer experience, personal financial health, and public policy.Download Now »Read More »
We presented three research projects at the 2014 Boulder Summer Conference on Consumer Financial Decision Making (hosted by the Leeds School of Business at the University of Colorado, Boulder). Our newest findings address several important topics in the field of consumer finance including the ways in which prime and subprime credit consumers recover from financial shocks, why financial literacy training often produces lackluster results, and how best to present credit card interest rate information to improve consumer decision making.Read More »
In Colombia, one of the topics on which the government and the banking sector have worked most diligently in recent years is financial inclusion.
The results, however, have not been as expected and, according to Christopher Trepel, Executive Director of the Consumer Credit Research Institute (CCRI), one of the problems is that segmenting credit users requires access to data associated with their behavior. But, when loans have not been introduced to underserved niches, relevant information is not available.Read More »
We presented at the Boulder Summer Conference on Consumer Financial Decision Making, a meeting devoted to interdisciplinary work about understanding and improving household and consumer financial decision making. Participants included financial regulators, academic scientists, nonprofit leaders, and private sector experts.
Total US consumer indebtedness is $11.3 trillion and one in seven consumers has an account in collections. Nevertheless, very little psychological or mechanistic data exist concerning financially stressed consumers, despite growing interest by policy makers, business leaders, and researchers. Building on our previous work, we presented additional data contrasting prime and subprime consumers across a broad range of individual difference measures.Download Now »Read More »
We recently completed a psychographic field study that revealed significant differences between prime and subprime consumers in the areas of financial knowledge, planning myopia, and decision-making behavior. Our results have important implications about how to describe, understand, and resolve consumer financial distress within the collection process. We discuss our findings and explore applications to business strategy and public policy.Download Now »Read More »
Can games help people who have a lot of bad debt get back on track? Encore Capital and Payoff.com will find out.
Encore Capital, which purchases consumer debt, is partnering with Payoff.com, a personalized finance motivation company, to provide elements of gaming and goal setting to help distressed consumers improve their financial health. The partnership brings together the efforts of a number of entities that purchase, collect and study consumer debt.
Encore has also created the Consumer Credit Research Institute, a collaboration with academia that uses tools from psychology, economics and neuroscience to study how consumers make financial decisions.Download Now »