1084961--2/8/2010--ENCORE_CAPITAL_GROUP

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{capital, credit, financial}

{regulation, change, law}

{financial, litigation, operation}

{personnel, key, retain}

{loss, insurance, financial}

{customer, product, revenue}

{operation, international, foreign}

{stock, price, operating}

{tax, income, asset}

{acquisition, growth, future}

{debt, indebtedness, cash}

{cost, operation, labor}

{product, market, service}

{investment, property, distribution}

{system, service, information}

{competitive, industry, competition}

{regulation, government, change}

{property, intellectual, protect}

{loan, real, estate}

{stock, price, share}

Recent instability in the financial markets and global economy may affect our access to capital, our ability to purchase accounts, and the success of our collection efforts. Our quarterly operating results may fluctuate due to a variety of factors. Fluctuations in our operating results may lead to decreases in the trading prices of our common stock and convertible notes. We may not be able to purchase receivables at sufficiently favorable prices or terms, or at all. We may not be successful in acquiring and collecting on portfolios consisting of new types of receivables. We may purchase receivable portfolios that contain unprofitable accounts and we may not be able to collect sufficient amounts to recover our costs and to fund our operations. We may purchase portfolios that contain accounts which do not meet our account collection criteria. We may not be able to use our sales channel to sell unprofitable accounts. The statistical models we use to project remaining cash flows from our receivable portfolios may prove to be inaccurate, which could result in reduced revenues or the recording of an impairment charge if we do not achieve the collections forecasted by our models. We may not be successful in recovering the level of court costs we anticipate recovering. Our industry is highly competitive, and we may be unable to continue to compete successfully with businesses that may have greater resources than we have. Our failure to purchase sufficient quantities of receivable portfolios may necessitate workforce reductions, which may harm our business. A significant portion of our portfolio purchases during any period may be concentrated with a small number of sellers. We may be unable to meet our future short- or long-term liquidity requirements. Volatility in U.S. credit markets could affect our ability to refinance and/or retire existing debt, obtain financing to fund acquisitions, investments, or other significant operating or capital expenditures. We may not be able to continue to satisfy the restrictive covenants in our debt agreements. We use estimates in our revenue recognition and our earnings will be reduced if actual results are less than estimated. We may incur impairment charges based on the provisions of Financial Accounting Standards Board Accounting Standards Codification Subtopic 310-30. Negative news regarding the debt collection industry and individual debt collectors may have a negative impact on a debtor s willingness to pay the debt we acquire. Our business of enforcing the collection of purchased receivables is subject to extensive statutory and regulatory oversight. Present and future government regulation, legislation or enforcement actions may limit our ability to recover and enforce the collection of receivables. Failure to comply with government regulation could result in the suspension or termination of our ability to conduct business, may require the payment of significant fines and penalties, or require other significant expenditures. We are dependent upon third parties to service a substantial portion of our consumer receivable portfolios. A significant portion of our collections relies upon our success in individual lawsuits brought against consumers and our ability to collect on judgments in our favor. Increases in costs associated with our collections through a network of attorneys can materially raise our costs associated with our collection strategies and the individual lawsuits brought against consumers to collect on judgments in our favor. We are subject to ongoing risks of litigation, including individual and class actions under consumer credit, collections, employment, securities and other laws, and may be subject to awards of substantial damages. We may make acquisitions that prove unsuccessful or strain or divert our resources. We are dependent on our management team for the adoption and implementation of our strategies and the loss of their services could have a material adverse effect on our business. We may not be able to hire and retain enough sufficiently trained employees to support our operations, and/or we may experience high rates of personnel turnover. Exposure to regulatory, political and economic conditions in India exposes us to risks or loss of business. We may not be able to manage our growth effectively, including the expansion of our operations in India. The failure of our technology and telecommunications systems could have an adverse effect on our operations. We may not be able successfully to anticipate, invest in or adopt technological advances within our industry. We may not be able adequately to protect the intellectual property rights upon which we rely. Our results of operations may be materially adversely affected if bankruptcy filings increase or if bankruptcy or other debt collection laws change. We are subject to examinations and challenges by tax authorities.

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1084961--2/8/2010--ENCORE_CAPITAL_GROUP_INC