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How CFS Uses Market Clout...1) BUYS credit-card debt that has been charged off by banks and other issuers. To keep the pipeline full, CFS has exclusive or near-exclusive long-term deals with 15 of the top 25 bank card issuers. 2) SECURITIZES the debt and sells investors the notes. Since 1995, CFS, the first firm to pool bad consumer loans, has sold $840 million worth, which it uses to buy more debt. 3) RETAINS accounts and collects on debt. CFS uses sophisticated technologies to collect nearly three times what it pays for charge-offs. To squeeze out more profits, CFS will soon create a new company to make loans to least risky debtors.
DATA: BUSINESS WEEK
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Updated July 31, 1997 by bwwebmaster
Copyright 1997, by The McGraw-Hill Companies Inc. All rights reserved.
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