In Era of Financial Crisis, more and more creditors have turned to International debt collection outside the court system. The collapse of global economies from around mid 2008, and through into 2009, leading to recessions in many countries, has seen tremendous and hereto unheard of efforts by governments around the world to stimulate consumer and commercial confidence.

It is hoped that by doing so, the effects of the global financial downturn, will be minimized and that domestic stimulus, particularly in the world's major countries, will stop the downward spiral and contribute to a revival of the pre 2008 conditions.

Whilst this may be wishful thinking on behalf of some so called experts, the fact remains there have been a tremendous effort made by governments around the world, to halt the worsening economic conditions and do what they can to rebuild shattered confidence.

Using Australia as an example, we have seen a budget surplus in 2008 of more than a $20 billion wiped out as the Rudd Labour government has implemented steps to stimulate the domestic economy, whilst at the same time save jobs, and either prevent or at least slow down the unemployment figures.

West Australia which had seen a boom period for more than a decade has been impacted more than any other State in the country, and the mining industry, which had been responsible for much of the growth in employment has been forced to take action, and in the past two months alone has laid off thousands of workers and adopt ways of reducing their exposure to the downturn in exports of minerals to the huge China market.

This alone has meant employees from the eastern States of Australia, along with an estimated forty thousand workers recruited from New Zealand are facing hardship in meeting their day to day living costs, along with housing repayments, school fees etc.

The same story is being heard in many countries around the world, and India which is a market leader in IT services such as BPO and IPO call center's has also been hard hit as multi national clients reduce their budgets; in many cases substantially leading to termination of service contracts.

Even if the global markets were to recover in the next two quarters, (and that is highly unlikely) or even partially recover, it is increasingly obvious that the global collection industry is going to continue to see a huge increase in the levels of consumer and commercial debt, whilst at the same time the capacity to meet this increased debt will have reduced substantially, due to rising unemployment impacting on the consumers ability to meet their financial obligations.

The fall in consumer spending has already impacted adversely on retail sales and the forecast for this trend is for it to continue and to rise, which will see further retail outlets closing their doors, due to bankruptcy.

Equally, commercial markets such as commodities have been in a downward spiral for the past year, demand continues to lessen, and medium to long term contracts for supply of raw materials to the major manufacturing countries of China and India are being re-negotiated to reduce either quantize to be supplied or see the price negotiated downwards.

Further, there is a growing trend for fraudulent activity to occur in an increasing number of commercial business dealings, and we at GCS have seen in the past six months alone, a substantial number of what were lodged with us as commercial collection cases, actually requiring in depth investigations to determine what actions are open to the client's to attempt a recovery of monies owed to them.

In some cases, criminal actions have been quickly confirmed, thereby enabling liaison with police and statutory authorities; in other cases, assets have been locate against which legal action has been used to affect a successful recovery.

Whilst the perception of many in the media and the public at large, is that the collection industry is going through a boom time, the truth is that declining recovery rates (for reasons enumerated above) versus a rapidly increasing number of cases being lodged for collection, confirms what many experts in the global collection industry have often stated -

"the good times suit everyone and when all is going well, people and businesses have the capacity and will to pay"

The Australian Federal Government brought down its annual budget in Parliament last week, and has forecast a budget deficit in excess of $50 billion. What a difference twelve months can make, and the impact of globalization.