Asset Acceptance Capital Corp. reported cash collections of $89.2 million in the first quarter ended March 31, versus cash collections of $94.1 million in the year-ago period.
Cash collections on a year-over-year basis continued to be negatively impacted by the reduced purchasing in 2009. The company acquired $29.8 million (net of buybacks) in charged-off consumer loan portfolios with an aggregate value of $823.3 million, or 3.62% of face value.
Revenues for the first quarter totaled $51.6 million, compared to $57 million in the year-ago period. Amortization of purchased receivables in the first quarter was 42.7% of total cash collections versus 39.7% of total cash collections a year ago.
The company also disclosed that starting in February 2006, the Federal Trade Commission began investigating its collection practices under the Fair Credit Reporting Act, the Fair Debt Collection Practices Act and the Federal Trade Commission Act.
The FTC delivered a letter to the company this month stating it may have engaged in certain violations of those laws. It offered the company an opportunity to resolve the matter through consent negotiations, and forwarded a proposed consent decree.
The proposed consent decree includes certain monitoring and reporting obligations and customer disclosures, as well as a civil monetary penalty. Asset Acceptance is reviewing the proposal with counsel and has begun to discuss the matter with the FTC.
For the first quarter, the company, based in Warren, Mich., also reported a non-cash net impairment charge of $99.7 thousand on purchased receivables in the first quarter, versus $3.4 million in the prior year quarter. For a report on the company's Q4 2009 performance, see story.
"While our business and industry faced a difficult economic period in 2009, we are pleased with the early success of many of our efforts to improve efficiencies and increase purchasing," Rion Needs, president and CEO, said. "Our initiatives to improve our workflow automation processes contributed to solid collections performance in the first quarter.
"In addition, the continued advantageous purchasing environment allowed us to acquire" charged-off portfolios at an "increase of 37% from the first quarter of last year. As the pricing environment has begun to stabilize, we seek to continue to maximize returns as we bid appropriately. In 2010, we remain committed to returning our purchasing levels to meet or exceed historical levels."