Industry Profile

Since the passage of Sarbanes-Oxley Act on July 30th, 2002, many credit issuing companies such as banks and other financial institutions are moving away from managing their delinquent accounts generally beyond 120 to 180 days of contractual delinquency. There has been an increased availability of so called "distressed receivables for sale at pennies on the dollar". This trend has caused agencies that traditionally have been in the business of third-party receivables for many years, to consider purchasing debt.

The debt purchasing and finance industry has been formally organizing since about 1991; Orange Capital Solutions, entered the market in 2005. There is a vast market potential for servicing impaired debt purchasers as the overall debt sales market expands rapidly (according to Dept. of Commerce an average Americans debt has increased 3 folds since 1999).

The current $35 Billion market is shared between debt purchasers and contingency collectors (Orange Capital Solutions, provides both of these services). The business share of contingency collectors has been steadily decreasing in favor of purchasers. At present, slightly more debt is sold than assigned to agencies on contingency. At Orange Capital Solutions, we believe that within the next five to ten years, 60% of all consumer debt will be sold rather than assigned to collection agency. The only hold back seems to be the rate of development of the debt purchasers industry. Rapid growth in revolving card outstanding consumers debt. The additions of other debt business categories to the debt sales market (loans, tax, medical debts, student loans etc.) widens the field even more.

At present, the number of players in the purchasing business is still even quite small, estimated at 1000 buyers, of which top twenty (20) represent 40% of the total activity, and the next largest 100 buyers representing 35% of total activity. Rest about 880 players represents the remaining 25% of the debt purchasing industry.