Digging into Current ARM Industry Trends

A Q&A with TransUnion’s Manny Plasencia on the results of the company’s annual debt collection industry report sheds light on digital communication, hiring, remote work trends, and more.

Despite mounting economic headwinds, accounts receivable management organizations are cautiously optimistic — nearly 70% expect improved financial performance in the year ahead.

But optimism alone won’t cut it. Rising delinquency volumes, tightening margins and a rapidly shifting consumer landscape are forcing agencies to rethink how they operate, communicate and grow.

To make sense of it all, ACA International sat down with Manny Plasencia, head of third-party collections-diversified markets at TransUnion, to unpack the findings of the company’s latest debt collection industry report.

In the Q&A below, Plasencia breaks down the data behind the surge in self-service adoption, the evolving strategy around consumer contact, and why this report is less of an industry snapshot and more of a call to action.

ACA: This survey feels different than the one you put out last year. What was the goal behind the redesign?

Manny Plasencia: People told us that what they want from this survey is not confirmation of what they already know, but to find out what they don’t know. So, we decided to take a new approach and developed more strategic questions to bring that information to light.

ACA: As far as the results, what jumped out at you as most surprising or impactful this year?

Plasencia: Nearly 35% of consumers reported plans to apply for new credit or refinance existing obligations over the next 12 months. That’s a significant add-on to an already pretty serious delinquent flow. When I look at “intent,” the strongest is among our largest population, Gen Z and millennials. 57% said they’d apply for a new credit card, followed by 24% planning requests to increase credit lines and 23% planning to apply for personal loans.

You couple that type of top-of-the-funnel behavior with total balances that are bloated by 33% from Q2 in 2019 to Q2 in 2025. So, we can anticipate even more volume, which we’re already burdened with. That’s the story in collections right now.

Thirty-four percent of agencies are saying they’re seeing increased volume and liquidations are a bit more challenging. As a result, we’re not seeing the same type of liquidation rates as in the past, which is squeezing margins. Collection agencies operate on margins, and because they now have to spend more to manage more volume, they’re obviously seeing less liquidation. There is less positive impact on their margin, which leads to those spending investments.

ACA: The report shows a massive jump in self-service. What is driving that shift?

Plasencia: More than 98% of organizations now offer at least one self-service capability, compared to 80% in 2024. It’s a huge jump. While it’s probably more cost-effective for agencies to go with a self-service, agentless environment, it’s also the preferred method for most consumers. Most consumers don’t want to interact with a person if they can take care of it digitally.

It used to break down generationally, with younger consumers preferring things digitally. But ironically, Gen X is the group that’s more likely to use self-service tools than any other generation. So, we’re talking about 40- to 65-year-olds who are jumping in and leading the way in self-service — or avoiding people, however you want to look at it.

ACA: The embrace of remote work noted in the survey was fascinating. How is that impacting operations?

Plasencia: Retention and hiring, as you can see in the survey, is at the forefront right now. It’s hard to do. Training agents is costly and keeping them is even more costly. If you’re not adopting a remote work structure at some level, in my opinion, then you’re either struggling or you aren’t a large enough organization to where that would impact you negatively because you have loyal people who have been with you for years and years.

I think the companies that are large enough to have those blended environments and embrace remote work strategies are really seeing the benefits.

I remember when COVID first hit, I told my bosses that if we sent people to work from home, we could expect at least a 5% hit in productivity. In hindsight, that was really my ego talking. Because what happened? Productivity went up and costs went down.

Large organizations understand that if you’re going to be competitive, you must provide those types of environments.

ACA: How has the actual nature of contacting a consumer changed?

Plasencia: The purpose or intent of a phone call has changed. If I’m launching a telephone number, the person I’m calling is not likely to answer anymore. People don’t answer blank calls with no phone numbers or caller ID. There is a strategy in play now of calling, texting and emailing a consumer to stay relevant in their visual scope, so they can decide how to return my communication.

I personally think the industry is moving toward that trusted contact solution. I think it’s offensive to try to port the local area code to reach a consumer. If they don’t know you, they’re not going to pick up the phone. And if they did, what kind of hostile customer are you dealing with? Now you’re immediately de-escalating, right? “Oh, you tricked me into answering the phone.”

ACA: How do you hope ACA agency members will use this report to help their business?

Plasencia: I like to say this survey isn’t meant to be an artifact. It’s meant to be a call to action. This is an actionable report. Rather than looking at it as one big, holistic tool, there are actually several tools within the report that you can deploy within your operation.

I would also love to see this report used in our industry’s advocacy work. This year, I plan to print copies of this report and bring them to ACA’s Washington Insights Fly-In. I’m going to try to hand it to every member of Congress that I talk to.

Overall, I think ARM companies are in good hands, and our industry is in good hands, and I think we’re headed in the right direction.

Read TransUnion’s Debt Collection Industry Report: Investing for Impact.