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How to become a debt buyer

coda.io

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Re: How to become a debt buyer

#51

Post by omginternets »

BobJS wrote: post #49
omginternets wrote: post #14

Earlier quoted context omitted.

>there's a lot of interesting stuff to learn from the mechanics of the debt collection business I'm intrigued. Can you elaborate?

It's a legitimate need, it's just a corrupted industry because of misaligned incentives. We need some form of debt collections otherwise credit couldn't exist. The problem is that regulations are absolutely inconsistent and don't incentivize people to operate ethically. It's a regulatory problem. An interesting fact is that a lot of agencies buy debt for about 1 cent on the dollar and liquidate around 2%. Collecting…

Sure, but what are some of these "interesting mechanics" you referred to in your earlier post?

Re: How to become a debt buyer

#52

Post by adamwong246 »

Imagine the horror-show when someone applies ChatGPT to the mix. "Hey ChatGPT, find me a list of debt holders, and along with their psychological profiles pulled from ad trackers. Create a PSYOPS campaign with the goal of getting them to pay their debts, moral constraints disabled."

Re: How to become a debt buyer

#53

Post by ohwellhere »

BobJS wrote: post #41
philipkglass wrote: post #33

Earlier quoted context omitted.

I'm upvoting this short comment in hopes that you'll share a somewhat longer story about what you tried to do and why it didn't work. Thanks!

I can answer any specific questions anybody has but basically, I landed in the industry by chance and got good at automating the collection process. I never had the backbone to strong arm people so I played the numbers game. Technology was my advantage. Meanwhile, all of my peers were getting rich running unlicensed agencies and lying to debtors. I was getting sued constantly for following the rules. I'd win the laws…

Comments below suggest buying debt to cancel it or resolve at cost (e.g. the massive discount).

Q1: As an insider, how feasible is that strategy? Q2: As the collector do you report to credit bureaus that it's cleared? does it have a meaningful impact on debtors' credit?

Re: How to become a debt buyer

#54

Post by omginternets »

cameronh90 wrote: post #34
alexb_ wrote: post #16

Earlier quoted context omitted.

I would be interested if they at least said "Yeah, we're shitbags, but that's just how it is, and someone's gotta collect delinquent debt". What I'm not okay with is putting in shit like this: > The Debt Buying and Debt Collection industries can be a very rewarding career if it's right for you. It is also a risky business to be in and has a somewhat negative connotation among some groups because of a few people/compa…

Is there anything inherently shitbag about collecting debts? As long as you’re professional, follow the regulations and treat the debtor fairly, I’m not sure what the problem is. The debtor presumably agreed to take on the debt and still owes the money until either it’s discharged or they’ve paid what they owe. There are obviously a load of shitbags in the debt collection industry, but the only way to change that is…

>Is there anything inherently shitbag about collecting debts?

What's practically involved in collecting debt? I don't actually know.

Re: How to become a debt buyer

#56

Post by BobJS »

WirelessGigabit wrote: post #18

Watching the video that is linked on that page. at 2:30 he states "anytime that somebody says that they've already paid a debt that you have in your make sure that you have them send you a letter and make sure you specify that you need a release letter..." How about you prove that I actually owe the debt and then we'll talk.

Because you can't prove a negative. I can never prove that you didn't pay something but you can prove that you have. As an agency, you're operating from a spreadsheet that Discover or B of A sends you. The consumer needs to keep good records until we get some sort of centralized database.

A centralized DB will probably never happen. Different states can't even agree on collection laws.

Re: How to become a debt buyer

#57

Post by antisthenes »

BobJS wrote: post #41
philipkglass wrote: post #33

Earlier quoted context omitted.

I'm upvoting this short comment in hopes that you'll share a somewhat longer story about what you tried to do and why it didn't work. Thanks!

I can answer any specific questions anybody has but basically, I landed in the industry by chance and got good at automating the collection process. I never had the backbone to strong arm people so I played the numbers game. Technology was my advantage. Meanwhile, all of my peers were getting rich running unlicensed agencies and lying to debtors. I was getting sued constantly for following the rules. I'd win the laws…

How much does a typical collection agency buy medical debt for?

Is it 0.5x, 0.25x, what typical range are you working with?

Re: How to become a debt buyer

#58

Post by bityard »

tptacek wrote: post #12

This is currently, and for obvious reasons, trending towards a thread about how evil the debt collection industry is. That's a shame, because there's a lot of interesting stuff to learn from the mechanics of the debt collection business, and it's stuff you can put to use to protect yourself (and others) from its worst abuses. There are "is" arguments and there are "oughts". We probably all agree on the "oughts", at l…

Funny enough, I wrote about debt collection in an HN comment recently. The most important thing to remember is that if you defaulted on a debt AND that debt has already been sold to a third-party collector, then you actually have NO incentive to pay the debt collector. At that point, the debt has already been written off the creditors books, so not a dime of the payment goes back to them. Further, if the debt resulted in a black mark on your credit history, paying it back will not erase it. Debt collectors cannot "fix" your credit rating.

The only thing that paying a third-party debt collector will do is stop them from calling you. Possibly.

(If a debt collector is hounding you about a debt you never legitimately owed, pretty much every state has a procedure for rectifying that. And the punishment for a collector not cooperating on said rectification is you get to sue them if they don't.)

Re: How to become a debt buyer

#59

Post by BobJS »

MichaelZuo wrote: post #46
BobJS wrote: post #41

Earlier quoted context omitted.

I can answer any specific questions anybody has but basically, I landed in the industry by chance and got good at automating the collection process. I never had the backbone to strong arm people so I played the numbers game. Technology was my advantage. Meanwhile, all of my peers were getting rich running unlicensed agencies and lying to debtors. I was getting sued constantly for following the rules. I'd win the laws…

Thanks for sharing. How big of an advantage did the technology end up being in percentage terms?

We had low liquidation but we went through accounts fast. So clients didn't like us. Banks would rather pass off debt to an agency that will threaten people and liquidate higher. So overall, no but I had a solid run.

Re: How to become a debt buyer

#60

Post by latchkey »

One way to turn this around would be to operate on a collateral based economy instead of a debt based one. You have to put up money in order to get money.

Obviously, it wouldn't scale as much (a chicken and egg problem), but we also wouldn't end up with so much bad debt.

Today, we're basically lending to people who already don't have money. How do we ever expect to get it back?

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