Every credit card issuer eventually runs into the same scenario: a cardholder dies, the estate executor doesn’t notify the credit bureaus, the account goes delinquent, and after a few collection attempts go nowhere, the balance gets charged off as a loss, or a “cost of doing business.” But a meaningful share of that "loss" is often recoverable through proper estate recovery. Issuers who default to writing off decedent accounts instead of proactively identifying them through structured decedent account collections are leaving real revenue on the table, right as the volume of this problem is set to grow.
Debt Payoff Responsibility is up to The Estate
Roughly 73% of Americans who die leave behind some form of debt, according to a widely cited Experian/Debt.org study, with the average unpaid balance sitting over $60,000. Credit card debt is the most common type carried into death, with 68% of deceased individuals having an outstanding credit card balance at the time they pass.
For an issuer, this means decedent accounts are a routine, sizable, and recurring category of potential receivables. The challenge is that most conventional collections infrastructure isn't built for this scenario. Standard dunning/delinquent letters, calls, and automated collection workflows are designed for living, contactable borrowers, not for estates, their executors, or probate courts. When conventional collections attempts go nowhere, many issuers simply charge the account off rather than shifting into a proper estate recovery process. This closes the door on a claim that may still have been legally recoverable.
Conventional Collections Doesn’t Work for Estates
Pursuing a deceased cardholder's balance through the same channels used for an active, delinquent borrower creates two problems at once. First, it's usually ineffective. An estate executor isn't going to respond to the same call scripts and letters a living cardholder would, and staff without probate expertise often don't know who the legally responsible party even is. Second, it carries real compliance exposure. Contacting surviving family members about a deceased cardholder's debt is governed by rules that differ from standard FDCPA and Regulation F treatment of living consumers, and missteps here create reputational and legal risk that outweighs the balances being pursued.
The result is a pattern seen across the industry: accounts sit in conventional collections too long, miss the state-specific probate claim-filing windows that would have made them recoverable, and then eventually get charged off. The debt was collectible, but because it wasn't pursued the right way, at the right time, through the right channel, it was written off and lost forever.
Demographic Shifts Make This a Bigger Issue
This is a growing issue for consumer lenders in general. The Congressional Budget Office's (CBO) most recent Demographic Outlook projects that 2030 will mark the point at which U.S. deaths outpace births, meaning the "natural" population (births minus deaths) is projected to turn negative, with immigration becoming the only source of population growth. Put simply: the number of Americans dying each year is on a sustained upward trajectory.
For a credit card issuer, that trend translates directly into portfolio risk. As the volume of cardholder deaths rises, so does the volume of decedent accounts moving into collections. Issuers who are still relying on conventional, reactive collections treatment for these accounts aren't just missing recoverable revenue today, they're building that inefficiency into a growing share of their portfolio for years to come. The issuers who get ahead of this now, by building a dedicated estate recovery and decedent account collections process, will be better positioned than those still treating it as a rounding error in the charge-off line.
How DCM Services Helps Issuers Recover What Conventional Collections Misses
This is the specific gap DCM Services closes for credit card issuers. Rather than routing decedent accounts through the same processes as standard delinquencies, we identify decedent and probate accounts early with our proprietary software, manage the state-by-state regulatory requirements that govern estate claims, and file within the windows that determine whether a balance is recoverable at all. Plusc we handle it all without adding headcount or legal risk to your team.
We've applied this same approach for other financial institutions with measurable results: a large Midwestern credit union that shifted from reactive, in-house estate recovery to a proactive DCM-managed program saw a 7,500% return on investment. You can read that case study here: Fix Reactive Estate Recovery Processes and Watch Your Revenue Increase.
As cardholder deaths rise in the years ahead, the issuers who build a proactive estate recovery function now will recover materially more than those still writing decedent debt off by default.
Contact us to find out how much recoverable revenue may already be sitting in your charge-off portfolio!
