14:02 PM

TransUnion's Portfolio Valuation Solution Offers Debt Buyers and Sellers Opportunity to Boost Return on Investment

LAS VEGAS, Feb. 4 -- To help mitigate risk associated with debt buying, TransUnion today announced its Portfolio Valuation solution at the 2009 DBA International Annual Conference, enabling debt buyers and sellers to price and bid on portfolios more accurately. By using these tools, collection executives are able to make informed, analytical and objective decisions while improving the likelihood of increased returns on investment.

"Utilizing our Portfolio Valuation solution will allow both debt buyers and sellers to better understand critical portfolio characteristics such as outstanding balances and anticipated liquidation rates," said Scott Carter, group vice president of TransUnion's collections vertical. "This is particularly important because TransUnion's Trend Data database projects credit card delinquencies to hit their highest levels in five years at the end of 2009, resulting in a potential saturation of accounts in the market."

The Portfolio Valuation solution seamlessly integrates TransUnion offerings to create depersonalized, aggregated reports which help assess the potential ROI of a debt portfolio. For instance, the solution utilizes the TransUnion Collection Prioritization Engine, which conducts a thorough analysis of debt portfolio characteristics and provides key valuation assessments in a comprehensive report. The solution assesses several characteristics, such as the number of bankruptcies, deceased indicators and fraud alerts. Furthermore, the TransUnion Recovery Model is used to evaluate portfolio collectability.

Data and analytics compiled from these tools are then featured in a number of reports such as:

-- TransUnion Score Distribution Report -- identifies how consumers fall into score bands to help determine the likelihood of recovery and leverages one of the company's generic recovery or risk models, or a custom score to further refine the likelihood of recovery.

-- TransUnion Waterfall Statistics Report -- identifies portfolio hit rates on various indicators and provides percentages on all collections characteristics such as number of satisfactory open mortgage trades, etc.

-- TransUnion Liquidation Report -- estimates the dollars that potentially can be collected

"The reports provided with the Portfolio Valuation tool are especially useful because they can be customized for specific customer needs," said Adam Elder, a major account executive at TransUnion who specializes in debt buying. "We understand that debt buyers and sellers may be looking for specific characteristics when evaluating accounts and this solution will help them make appropriate decisions based on our analytics."

An example of the solution's power can be seen by reviewing just a small sample of a report TransUnion conducted on one debt portfolio. Through TransUnion's analysis of the portfolio -- evaluating variables such as expected liquidation rates and outstanding balances -- a prospective debt buyer could learn how much money might be recovered by accounts in a range of TransUnion Recovery Model scores.

For instance, a debt buyer working the accounts that fell between the 661 and 680 score range can expect an average liquidation rate of 14.22 percent in 12 months, according to industry analyses. The same portfolio with debtors in the 461 to 480 score range would be expected to liquidate 1.27 percent using industry averages observed by TransUnion. These industry statistics demonstrate that, though there are three and one-half times more debtors in the lower score range with more than twice as many dollars owed, the debt buyer would collect more than five times the total dollars from the debtors in the higher score range. This competitive advantage of knowing the distribution of debtors and dollars owed while bidding on a portfolio allows the debt buyer to improve its bids.

"A debt buyer seeking this level of account detail can use these metrics when comparing prospective portfolios," said Adam Elder. "While one portfolio may have more accounts at a certain scoring range, the Portfolio Valuation tool will be able to let you know if another portfolio may be of more value when analyzing all metrics, resulting in significant cost savings."

For more information on TransUnion's Portfolio Valuation solution, visit booth #520 at the 2009 DBA, contact Adam Elder at aelder@transunion.com or visit transunion.com/collections