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| [May 16, 2008] |
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Survey Shows Consumers Tapping Savings to Meet Rising Delinquent Payments
CHANTILLY, Va. --(Business Wire)-- Online Resources Corporation (Nasdaq:ORCC), a leading provider of web-based financial services, today released the results of its second survey of U.S. households and how their bill payment patterns are being affected by ongoing economic softness. The survey shows that Americans' personal financial stability continues to decrease, as the mortgage crunch, rising energy costs and a decreasing savings rate hit more households.
Conducted six months following Online Resources' first delinquency study, the survey of more than 1,000 nationally representative U.S. households finds that Americans in all demographic groups continue to prioritize among their bills by creating a "delinquency budget." The mortgage still ranks first as the bill that households are most likely to pay, although the percentage of households who reported being delinquent with their mortgage payments has increased significantly.
Key findings of the survey include:
-- 52 percent of households report that it is harder to meet their financial obligations, an increase from 43 percent six months ago;
-- More than half of households reported taking money out of savings, including retirement accounts, to pay for necessary living expenses or their household bills;
-- Although credit cards continue to have the highest reported delinquency rate, mortgage and utility delinquency rates have increased significantly in the past six months;
-- No demographic is immune from delinquency: 14 percent of households with an income greater than $100,000 reported being delinquent and 13 percent of households whose mortgage is paid off also have at least one bill 30 or more days overdue; and
-- A sizeable portion of households are severely delinquent: 14 percent reported having at least one bill 90 days or more overdue, with credit cards having the highest percentage of severe delinquency.
Additionally, the web, by an expanding margin, continues to be consumers' preferred method for resolving their delinquency, as compared to other traditional collection methods.
"The nation's ongoing credit challenges will likely affect more companies in recurring bill industries, more deeply," said Robert R. Craig, executive vice president and general manager of eCommerce Services for Online Resources. "Billers who provide a comprehensive set of web-based and other services for resolving delinquencies can gain a distinct advantage. Giving consumers options helps to maintain better relationships throughout the entire customer lifecycle--not just the hard times."
More information about the results of this survey is available in a report titled "Payment Delinquencies Spread Across Billing Industries & Household Demographics: An Updated Survey of US Consumers & the Bills They Pay." To obtain the report, visit the Press Room in Online Resources' web site at www.orcc.com or go to http://www.orcc.com/card/research_report.asp. This is the fourth in a series of reports published by Online Resources about the developments in consumer debt and collection technology.
About Online Resources
Online Resources powers web-based financial services for thousands of financial institutions, billers and credit service providers. Its proprietary suite of account presentation and payment services are branded to its clients, and augmented by marketing services to drive consumer and business end-user adoption. The Company serves over 8 million end-users and processes $100 billion in bill payments annually. Founded in 1989, Online Resources (Nasdaq:ORCC; www.orcc.com) is recognized as one of the nation's fastest growing companies.
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.
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