Van Ru Credit Leads ED Collection Contract so Far in First Quarter

Van Ru Credit Corporation looks like it may be on its way to being the next quarterly winner among unrestricted contractors in the U.S. Department of Education’s performance results, having won the latest monthly competition. Or is it?

The Des Plaines, Ill.-based collection agency earned 94.03 points in February, ahead of respective unrestricted second and third place finishers Continental Service Group (Conserve) and Pioneer Credit Recovery. Van Ru also bested its peers in January.

Meanwhile, the winner of two monthly performance results in a quarter on the small business contract typically emerges as the winner in the quarterly performance results. If that trend continues, Collection Technology Inc. will earn its fifth consecutive quarterly victory.  CTI of Monterey, Calif., earned 95.80 points in February to finish ahead of Coast Professional with 93.35 points. Immediate Credit Recovery came in third with 91.33 points.

But the battle to receive the most new account placements for the quarter ended March 31 isn’t over.  February’s performance results were close with the top three winners in the unrestricted category scoring within 7 points of each other.  The race among small contractors was even closer, with the top three winners scoring within 5 points of each other.

The Education department’s private collections performance results are determined by a weighted average of contractors’ performance in total dollars collected, total accounts serviced, and total administrative resolutions. The department awards 70 points to the top performer in the dollars collected category. Twenty points is awarded to the top performer in the total accounts serviced category, while the top performer in administrative resolutions receives 10 points.  The other agencies are scored against the top performers in each category.

None of the three top finishers in the unrestricted competition won two categories in January or February, which means the agencies rankings were based on their recovery rates in the dollars collected category.  And the contractors’ February recovery rates for dollars collected, which are calculated against their average inventory balances, were within 20 basis points of each other.

So maybe the Education Department’s performance results will produce a surprise victor.  And maybe the Education Department will move a little closer to achieving the internal goals it set for the contract (“Private Collection Agency Recovery Rates Fall Short of ED Projections,”  March 15).

To date, the contractors (17 unrestricted, and five small contractors) have collected more than $1 billion, or nearly $206 million in February.

Performance Rankings for January-February 2011