Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Credit card debt collection

bitsaboutmoney.com

Post reply on HN
Print view View original

131–140 of 568 posts

Re: Credit card debt collection

#131

Post by eru »

habosa wrote: post #111
adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

You're mostly correct but I should point out one thing that credit cards do that debit cards don't really do in America: fraud protection. Credit card companies spend a lot of money protecting their customers from card number theft (which is rampant in all parts of the world)

That might be true (I don't know), but then we are left with another mystery: why do credit card companies spend more effort combating fraud than debit card companies do?

(Also keep in mind that it's often the same companies that do debit and credit cards. For example, I have debit cards in the Mastercard and Visa networks, but no credit cards. I assume most of the fraud prevention efforts benefit my debit cards as well.

Also that relying on a bunch of numbers alone is pretty sketchy. But I am choosing to interpret fraud more widely, than just card number theft. I am pretty sure card number theft is pretty low(er) in parts of the world where people pay with chip-and-pin, and don't use numbered cards.)

Re: Credit card debt collection

#132

Post by adev_ »

habosa wrote: post #111
adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

You're mostly correct but I should point out one thing that credit cards do that debit cards don't really do in America: fraud protection. Credit card companies spend a lot of money protecting their customers from card number theft (which is rampant in all parts of the world)

> Credit card companies spend a lot of money protecting their customers from card number theft (which is rampant in all parts of the world)

I only bite half to this argument.

If they really wanted to fight against credit card number theft, they would:

- Enforce pin payment everywhere around the world - Ban magnetic strip payment once for all - Enforce two factor authentication system for anything related to online payment.

They do not. Why ?

Because the fraud "real" cost is mainly thrown in the wild on the merchant that have to deal with their goods being sent and their payment being reverted.

It is a liability issue.

I am pretty sure that with a little law that, lets say, enforce Banks to reimburse their customers under 24h00 for a small fee, lets say 10$, in case of fraudulent transaction: This entire system of scam would fade away pretty quickly.

Re: Credit card debt collection

#133

Post by argonaut »

adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

Credit card debt driving families to suicide is super exaggerated. America makes it relatively easy to get rid of credit card debt through bankruptcy. And even after bankruptcy it's possible to get credit cards again after a few years. And after seven years it's completely off your credit report.

Re: Credit card debt collection

#134

Post by eru »

cscurmudgeon wrote: post #117
adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

You conveniently left out the part where credit cards offer ... credit. Essentially quick loans upto a limit with zero collateral. If the govt. banned credit cards, you will then ask why poor people can't get credit. They will then go to payday loans and loan sharks. Remember, nobody forces you to use credit cards. Also, the US is also not the top country for either credit card usage or possession. Some European coun…

> If the govt. banned credit cards, you will then ask why poor people can't get credit.

Or alternatively, poor people would get their credit more from alternative providers. Like payday loans or pawnshops, or even loan sharks.

Those alternative sources of credit have exactly the same problem with shady collectors. The article alludes to that, but decides to focus on credit card debt.

The article also implies that perhaps regulation that encourages banks to offload credit card debt from their balance sheet might be to blame. If you instead had regulations that encouraged banks to keep credit cards on their balance sheets, and/or to make it so that debt collection agencies have to keep mentioning the co-branded sponsors (like Apple and Amazon etc), then collectors might have more of an incentive to be less shady to protect the reputation of established brands.

Reputation of established brands is very, very valuable, and does not require a lot of paperwork or bureaucracy to self-enforce. So that might actually be a better fix than enshrining yet more 'customer rights' in law, that only the literate classes who know how to navigate bureaucracy can actually enjoy.

Re: Credit card debt collection

#135

Post by adev_ »

benjaminwootton wrote: post #116
adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

Because the vast majority of people use credit cards without messing up their lives? I suspect most people don’t even need them but use them for cash back and consumer protection. For people who do need them, there’s nothing inherently wrong with buying something and spreading the cost or paying for it later in return for paying some interest. Most people who do that won’t get into any trouble. There are a hundred le…

> I suspect most people don’t even need them but use them for cash back and consumer protection.

Then make a debit card system with cash back and customer protection. And kill a system that screw people with useless debts when there is no need for it.

Btw

> Because the vast majority of people use credit cards without messing up their lives?

You never know where life bring you. I can certify you that "good", "honest", "responsible" people can also get screwed under a mountain debts because some unfortunate life circumstances brought that on them.

This system just make that much easier.

Re: Credit card debt collection

#136

Post by [deleted] »

adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

[deleted]

Re: Credit card debt collection

#137

Post by lmm »

adev_ wrote: post #91

It might be a very European view to the problem but: Why does the American government does even tolerate this credit card garbage business in the first place ? We are in the 21th century. Most payment can be validated electronically and processed under 200ms. I can pay something with my phone and get money taken directly from my bank account within seconds. There is absolutely no need of Credit Cards where Debit Card…

Credit cards are one of the few things where it feels like you're rewarded for playing by the rules and being prosocial and responsible. Everything else in society is set up to punish the middle class and the well-behaved, or so it often feels. So I very much doubt you'd get the middle class to vote for getting rid of them; if anything with the current breakdown in social trust I'd expect the opposite.

Re: Credit card debt collection

#138

Post by eru »

relyks wrote: post #127
eru wrote: post #105

Earlier quoted context omitted.

That money still comes from your spending with the merchant, so ultimately out of your own pocket. But you are right, that the system is not very transparent, and merchants probably seldom give people the full discount of the costs saved when they use non-credit card payments.

Most sadly don't give a discount for not using a credit card. I've only seen my local bagel place do that. Other places say they will charge a credit card transaction fee even if you use a debit card (which still has costs for the merchant but not as much as credit cards)

Agreed.

You can indirectly see some of this happening though: lots of places with lower margins (ie cheaper prices) won't accept American Express, but might accepts Visa and Mastercard. That's exactly because of the difference in fees.

If you go shop at merchant A that accepts American Express, you pay a higher price no matter how you pay. But if you have a non-American Express means of payment, you can shop at merchant B, which has lower prices overall (no matter how you pay). The economic effect is similar to directly passing on the fees transparently.

Re: Credit card debt collection

#139

Post by ocdtrekkie »

cortesoft wrote: post #85
analyte123 wrote: post #67

patio11’s prior writing on this topic helped give me the knowledge and fortitude to successfully dispute several thousand dollars of fraudulent claims that Enterprise rental cars tried to collect from me. As he alluded to, my high-FICO self felt morally bound to settle and pay for the dented bumper, but they definitely violated the FDCPA and some CFPB rules (in writing!), which I enumerated for them. Maybe if I went…

Yeah, that line stood out to me... I don't know how many of those high FICO score people pay because of morality verse how many pay because they want to continue to have access to lower cost debt that having a high FICO score gets you.

Well, challenging the debt on legal grounds shouldn't negatively impact your FICO score.

Presumably also if enough people broke this system, debt collection would be forced to change in a way that made it harder for people to do this. It is perhaps better if people who can manage to pay it do, so people who can't retain the ability to exploit the bad recordkeeping in the system as it is today?

Re: Credit card debt collection

#140

Post by rtpg »

dylan604 wrote: post #58
smeej wrote: post #37

Weren't there reports back in the Occupy Wall Street days of people organizing to buy up debt like this and then just forgive it all? It sounds like debts are sold in such bulk that there's no way to do something very targeted, like starting an org in your town to buy debt from your ZIP and collecting contributions to cancel your neighbors' debts, but if these debts are already only worth 5¢ on the dollar to the sell…

I never heard of buying credit debt, but I had heard of people buying medical debt in this manner. I get and respect the medical debt concept. Credit debt though is a tough one. How can you tell that someone ran up credit debt because they were paying for medical bills or something vs debt financing shopping sprees or vacations? Giving those who fall on hard times help is admirable. Giving people bad at personal fina…

> Giving people bad at personal finance a free ride is not

I get what you're saying but if you've ever gotten to "I now have enough credit card debt for it to be A Problem", the baseline level of stress in your entire life gets pretty high. That doesn't mean that suddenly everyone has "learned their lesson forever", but especially for stuff like "I was bad at personal finance in my 20s, and now I am better but the debt is still around and a problem", helping people with that debt can just make somebody's life much better.

Nothing is guaranteed but if it were a family member and you had a way to clear out some stuff for pennies on the dollar, it feels like the right sort of thing to do.

Post reply on HN