Encore Reports a 32% Increase in Fully Diluted Earnings Per Share for the Third Quarter of 2005

Encore Capital Group, Inc., a leading accounts receivable management firm, today reported consolidated financial results for the third quarter ended September 30, 2005.

For the third quarter of 2005:

• Gross collections were $83.9 million, the highest level in the Company’s history and a 40% increase over the $59.9 million in the same period of the prior year
• Total revenues were $59.2 million, a 27% increase over the $46.5 million in the same period of the prior year
• Net income was $7.8 million, a 32% increase over the $5.9 million in the same period of the prior year
• Earnings per fully diluted share were $0.33, a 32% increase over the $0.25 in the same period of the prior year. For the nine months ended September 30, 2005, earnings per fully diluted share were $0.99, a 32% increase over the $0.75 in the same period of the prior year.

Commenting on the third quarter, J. Brandon Black, President and CEO of Encore Capital Group, Inc., said, “Our record collections this quarter were driven by strong production from the portfolios we acquired from Jefferson Capital. Collections from the initial Jefferson Capital portfolio have exceeded our expectations and the forward-flow agreement provided a sizeable supply of additional portfolio during the quarter to profitably collect upon. Collections on the initial bulk portfolio purchase from Jefferson Capital were $21.6 million for the quarter, compared to our initial expectations of $16.9 million. This steady flow of reasonably priced portfolio has provided stability in our traditional collection business and allowed us to increase our focus on optimizing our collection efforts.

“It is important to note that when we exceed our near-term collection expectations, as we did during the third quarter, we recognize the expenses associated with generating those excess collections during the quarter they are incurred, while our revenue is derived from the effective yields established based on our long-term collection forecasts. Despite these additional expenses, we had significant bottom line growth.

“We also took two important strategic steps to diversify into complementary areas and enhance our growth potential. With the acquisition of Ascension Capital, we have taken a leadership position in the growing market for bankruptcy services. There is strong demand for Ascension’s specialized services, and we have added two significant customers since the acquisition. In addition, the increases in personal bankruptcy filings translated into record placements to Ascension throughout September and into October. We believe Ascension will also benefit from the new legislation going forward, as more lenders are beginning to consider an outsourced service provider in light of the significant changes in the bankruptcy administration process. We also established our Medical debt group and began collecting on the large self-pay medical portfolio we purchased in September. Through these steps, we believe we have positioned ourselves to capitalize on emerging trends in the consumer debt recovery industry and added new revenue streams that can serve as additional growth vehicles for the Company,” said Mr. Black.