Butchy Further on the issue of low-wage call centres similar to...

Butchy

Further on the issue of low-wage call centres similar to CCP's Manila centre, I think Intrum (the dominant debt buyer in Europe) has selected Greece for that purpose. I found it difficult to find recent information on that initiative, but one snatch of information mentioned “multi-lingual” and “high-volume”. The latter was not explained, but it could relate to the lower quality debt that has a low collections-to-calls ratio. If this is a correct interpretation, then it mirrors the reason why CCP opened the Manila call centre – to collect Australian non-bank PDLs, which are of lower quality than bank PDLs, because the debtors are not credit checked initially.

In the USA there are large categories of debt that are a non-issue in Australasia – hospital debt and student loans spring to mind. Obviously, there are PDLs sold by USA utilities and government agencies, just like in Australasia. Government agencies are more inclined to outsource debt collection as a service, but the teams required are similar to the ones that collect on PDLs.

CCP prefers buying bank PDLs, but it does buy some utility PDLs, and also offers to collect debt for a fee for the likes of Centrelink, the ATO and Telstra. Where CCP is allowed to offshore this work, it can use the Manila facility, but for Government off-shoring is disallowed, and I think that is where CCP's secure facility in Adelaide plays a role. That facility was acquired when CCP acquired NCML from Thorn Group. The Baycorp acquisition has increased the size of the collections-as-a-service business, and Management has made noises to the effect that CCP plans to grow this business. There is no reason not to supply such a service to North America.

In summary, I would not be surprised if CCP's expansion plans in the North America do not include a Manila-style operation in Mexico, Puerto Rico, or wherever English-speaking staff can be located at lower wages in a location in a desired time zone. That staff in those locations also speak Spanish is a plus for the USA business. This is just an idle speculation on my part, and it has no bearing on the SP trajectory in the short-to-medium term.