Question: Credit card companies lose money on cardholders who fail to
Credit card companies lose money on cardholders who fail to pay their minimum payments. They use a variety of methods to encourage their delinquent cardholders to pay their credit card balances, such as letters, phone calls and eventually the hiring of a collection agency. To justify the cost of using the collection agency, the agency must collect an average of at least $ 200 per customer. After a trial period during which the agency attempted to collect from a random sample of 100 delinquent cardholders, the 90% confidence interval on the mean collected amount was reported as ($ 190.25, $ 250.75). Given this, what recommendation(s) would you make to the credit card company about using the collection agency?
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