The debt collection industry is entering 2025 facing a mix of rising consumer delinquencies, growing account volumes, and accelerated investment in technology, according to TransUnion’s latest Debt Collection Industry Report. The survey finds that agencies, creditors, debt buyers, and law firms are preparing for higher volumes of distressed accounts while shifting more resources toward automation, digital communication channels, and self service tools to improve efficiency and manage costs.
The report paints a picture of an industry responding to sustained economic pressure on consumers. Inflation, elevated interest rates, and a gradual increase in unemployment have contributed to higher delinquency rates across major credit products. Serious delinquency has risen across unsecured personal loans, bankcards, auto loans, and mortgages, and the volume of accounts entering charge off continues to grow, even if the pace of growth has moderated. These conditions are contributing to expectations of rising placement volumes over the next year, with a large share of surveyed companies projecting continued growth in inventory.
On the operational side, technology investment stands out as a defining trend. The report finds that technology budgets are expanding faster than other operational areas, with the majority of organizations now adopting or actively exploring artificial intelligence and machine learning. Digital payment portals, SMS, email, and chatbot driven engagement are now common components of collections strategies. Companies are also increasing support for consumer self service, reflecting broader shifts toward digital first engagement models.
Human capital and operating models are also evolving. Remote work and business process outsourcing have become embedded in many organizations’ operating structures, particularly among larger firms. At the same time, controlling costs and protecting data remain top concerns for industry leaders as portfolios expand and digital footprints grow.
Despite the pressure on consumers and ongoing regulatory complexity, the overall outlook among respondents remains optimistic. Nearly seven in ten organizations expect improved financial performance in the year ahead, with larger and mid sized firms expressing the strongest confidence. The findings suggest the industry is positioning itself for higher volumes and tighter margins by leaning more heavily on automation, digital engagement, and diversified operating models.
