Study Confirms Benefit of Web Channel for Debt Collections
Online Resources Enables Reduction in Losses and Collections Costs
CHANTILLY, Va., August 22, 2005
Online Resources Corp. (Nasdaq: ORCC), a leading outsourcer of Internet
financial services, today announced that a top three credit card issuer
has achieved an improvement of 310 basis points in reduction of losses
by using its online collections product. The results were gleaned from
a five-month control group assessment of account holders who were offered
and accessed a web site to resolve their delinquent accounts over those
who were not offered an online method.
The results also showed the effectiveness of the collections web site
in reaching delinquent account holders who were unreachable by phone,
particularly for late stage accounts, which are past due between 90-180
days. In addition, late stage account holders who were offered and accessed
the web site paid at a higher rate than those who were not offered the
web site, and they required less phone contact.
The online collections product provides a fully branded, 24x7 online
environment where delinquent account holders can privately apply for and
enroll in rules-based payment programs, make a payment, schedule a future
payment, make a promise-to-pay, verify contact information, and schedule
an appointment to speak with an agent.
Specifically, key results showed:
- Overall, loss avoidance for delinquent account holders that accessed
the web site increased by 310 basis points compared to those who were
not offered this option (31.70% versus 34.80%). Based on these results,
savings for an organization with $50 million in delinquent outstandings
would be $3.1 million annualized;
- The online collections option showed effectiveness in engaging unreachable
delinquent account holders: 44.7% of the collections web site visitors
were unreachable by phone. Within this group, 69% were late stage accounts;
and
- Late stage account holders that accessed the web site had a 9% reduction
in phone contacts, and a 7.8% increase in payments received.
“The results of this study show online collections is well accepted
by account holders, effective in helping them manage their delinquency
in a low-confrontational and convenient manner, and provides strong potential
for operational savings,” said Bill Kinnelly, president of Online
Resources’ Card & Credit Services Division. “We believe
many of the results also show promise for collection agencies, holders
of consumer loan portfolios and debt buyers.”
More information about the results of this study are included in a white
paper titled, “Incurrent Collections: Champion Challenger Results,”
which is available by emailing incurrent@orcc.com or by calling Beth Halloran
at Online Resources, 703.653.2248.
About Online Resources
Online Resources powers Internet financial services for more than 700
firms nationwide. The Company’s proprietary account presentation,
payment, relationship management and professional services are branded
to its client banks, credit unions, card issuers and payment acquirers.
The Company serves over three million consumer end-users and processes
over $12 billion in payments annually. Founded in 1989, Online Resources
(Nasdaq: ORCC, Website: www.orcc.com) has been widely recognized as one
of the nation’s fastest growing technology firms.
This news release contains
statements about future events and expectations, which are "forward-looking
statements." Any statement in this release that is not a statement
of historical fact may be deemed to be a forward-looking statement. Such
forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the company's actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
Specifically factors that might cause such a difference include, but are
not limited to: the company's history of losses and anticipation of future
losses; the company's dependence on the marketing efforts of third parties;
the potential fluctuations in the company's operating results; the company's
potential need for additional capital; the company's potential inability
to expand the company's services and related products in the event of
substantial increases in demand for these services and related products;
the company's competition; the company's ability to attract and retain
skilled personnel; the company's reliance on the company's patents and
other intellectual property; the early stage of market adoption of the
services it offers; consolidation of the banking and financial services
industry; and those risks and uncertainties discussed in filings made
by the company with the Securities and Exchange Commission, including
those risks and uncertainties contained under the heading "Risk Factors"
in the company's Form 10-K, latest 10-Q, and S-3 as filed with the Securities
and Exchange Commission. These factors should be considered in evaluating
the forward-looking statements, and undue reliance should not be placed
on such statements
Media Contact: Beth Halloran,
Director, Corporate Communications
Online Resources Corporation
703.653.2248
bhalloran@orcc.com
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