THE NCO Receivables Management Solutions FIXED FEE PHILOSOPHY...

NCO Receivables Management Solutions services enjoy broad market acceptance due to its "alternative" approach to collecting delinquent receivables. The "Fixed Fee Philosophy" is at the heart of maximizing recoveries using NCO Receivables Management Solutions services. To understand and appreciate the benefits of the Fixed Fee Philosophy we must first compare it to the traditional or "conventional" agency approach.

The conventional agency approach:

• Is expensive - the agency retains from 30 to 50 percent of what they recover
• Produces poor results - due to the extreme aging of the accounts
• Alienates debtors - due to the harsh collection tactics used

Conventional Agency Collection Strategies
The conventional agency's recovery strategy is to salvage a percentage of written-off accounts after they have been deteriorated by age. As a result of the high fees charged by conventional agencies, credit grantors are unable (and unwilling) to turn accounts over early in the delinquency cycle since the agency fees would wipe out all of the credit grantors' profit margin. Thus, the accounts that are eventually assigned to the conventional agency are old and their collectability has been substantially deteriorated by time.

The NCO Receivables Management Solutions Partnership for Profit - the Fixed Fee Philosophy
NCO Receivables Management Solutions strategy is to accelerate slow-paying accounts with cost-effective solutions like the Tandem Program. Tandem's low fee of only 10 percent per account is normally less than the cost of continued internal pursuit of an account.

Therefore, delinquent accounts can be referred earlier in the delinquency cycle when third-party authority is most effective.

NCO Receivables Management Solutions clients are able to focus the attention of their internal collection staff on the early delinquencies (typically the 30 to 60 days late accounts), and the client's internal staff members will usually collect most of those early accounts. The few that are not collected internally are turned over to NCO Receivables Management Solutions at 61* days for full-service, third-party collection and pursuit.

By so doing, the internal collection staff continues to focus its efforts on the easiest accounts, the slow pays, and any that "escape" the internal staff are assigned to NCO Receivables Management Solutions early in the collection cycle, thus, maximizing internal and external recoveries.

Most conventional agencies focus their attention on recovering accounts that are old and already seriously delinquent. NCO Receivables Management Solutions, on the other hand, will recover those old accounts, and at the same time, will work with your internal collection resources to install the Fixed Fee Philosophy to help you reduce and/or eliminate bad debts in the future! This joint effort, between the client and NCO Receivables Management Solutions, to keep the client's cash flow on a current basis is a major NCO Receivables Management Solutions difference.

* The recommended turnover point in the delinquency cycle will be determined by an NCO Receivables Management Solutions account executive during the no-charge receivables analysis and will be based on the specific need of the client.