GURGAON, India - In a glass tower on the outskirts of Delhi, dozens of young Indians are on the telephone, calling America's out-of-work, forgetful and debt-stricken and asking for cash.
"Are you sure that's all you can afford?" one operator in a row of cubicles asks politely.
"Well, how do you take care of your everyday expenses?" presses another.
Americans are used to receiving calls from India for insurance claims and credit card sales. But debt collection represents a growing business for outsourcing companies, especially as the American economy slows and its consumers struggle to pay for their purchases.
Armed with a sophisticated automated system that dials tens of thousands of Americans every hour, and puts confidential information such as Social Security numbers, addresses and credit history at operators' fingertips, this new breed of collectors is chasing down late car payments, overdue credit card debt and lapsed installment loans. Debt collectors in India often cost about one-quarter the price of their American counterparts and are often better at the job, debt collection company executives say.
"India will be the only place we grow this year," said J. Brandon Black, the chief executive of the Encore Capital Group, a debt collection company based in San Diego. India is the company's largest operating area, with about half the company's collection force of more than 300.
Although the stereotype of a collector might be "some guy with chains and a cut-off shirt," Black said, collectors in India are "very polite, very respectful, and they don't raise their voice." He added, "People respond to that."
Companies such as Encore buy bad loans from banks and credit card issuers for pennies on the dollar and pocket the cash they collect. The delinquent borrowers often owe at least a thousand dollars.
A tiny fraction, maybe 5 percent, of American debt collection is done outside the country, industry executives estimate. But new business is in the pipeline.
Financial services clients are saying, "We want you to collect my debt, to analyze it and change the way that we sell" the loans, said Tiger Tyagarajan, executive vice president at Genpact, the business processing company spun off from General Electric that has roots in India. Genpact, which works with lenders to get customers to pay, rather than buying loans directly, like Encore, employs thousands of debt collectors in India, Romania, Mexico and the Philippines, and is hiring in all those locations.
In the past, the prevailing wisdom about wringing money from late payers has been that "if you're calling the Midwest, you want someone from the Midwest to twist their arm," said Mark Hughes, an analyst with Sun Trust Robinson Humphrey who covers the industry. That theory is changing as the pool of trained phone professionals in India and other locations deepens, and companies look outside the United States for lower costs.
Telephone debt collection represents new, more aggressive territory for India.
Like many sales teams, Encore's collectors in India gather for a daily pep talk before their shift. In one recent session, they were schooled on the intricacies of American tax policy.
Once the calls start flowing, Encore's Gurgaon office resembles nothing less than the headquarters for an enthusiastic fundraising telethon. Just minutes after collectors have put on their headsets, a supervisor yells out "Rajesh, for $35 a month for three months." All employees enthusiastically respond by clapping three times, and Rajesh is the first on the day's sales board.
Companies such as Encore often schedule dozens of payments and make dozens of calls before the loan is paid off.
Encore - which also operates as Midland Capital Management - additionally files sheaves of lawsuits against customers who do not respond.
Credit counselors in the United States say more and more of their clients are being contacted by debt collectors based in India. It can cause problems. When clients "run into someone who doesn't speak English well or there is a communication gap, it can add to the frustration of the customer," said Bill Druliner, manager and financial counselor for GreenPath Debt Solutions in Milwaukee.
Debt collection, no matter who does it, can have "a devastating impact on people's lives," Druliner said, because calls can stress family relationships, and sometimes debtors are pressed into paying late bills instead of buying necessities such as prescriptions.
Encore pays its collectors in India an average base salary of 17,000 rupees ($425) a month, and they earn bonuses - sometimes more than $1,000 a month - for getting customers to pay. In contrast, collectors in the United States, make about $6,500 a month. Thanks to the income, a windfall in India, where the average monthly income is $63, collectors are amassing some of the status symbols that probably got their clients into trouble in the first place - new scooters, iPods, Swatch watches and exotic vacations.