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Inside the Dark, Lucrative World of Consumer Debt Collection

nytimes.com

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Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#61

Post by cnp »

a8da6b0c91d wrote: post #28
Iftheshoefits wrote: post #24

Earlier quoted context omitted.

This is the worst possible advice a person could give. Collectors can and will go to court to get a Judgement (capital-J), which allows them to garnish wages (among other things) and in some cases is actually worse than declaring bankruptcy. "If you have a lot of cash" speaks volumes about where you're coming from, though. Congratulations on being one of the very privileged few in this country who can afford to do wh…

They pursue a judgement on sums up around thousands of dollars where the charges are clearly valid. There is no way that's going to happen on some piddly $400 amount that you have documented is substantially BS. What I'm talking about is people I've seen in recent threads freaked out about some comcast charge affecting their credit report. Don't waste a minute of your time dealing with them or the credit bureaus. Jus…

This is beyond idiotic. My credit score is HORRIBLE due to little things like this accumulating in my youth. Pay everything, always -- always pay -- always. It WILL come back to fuck you over just when you need those extra few points.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#62

Post by opendais »

dllthomas wrote: post #49
opendais wrote: post #35

Earlier quoted context omitted.

Do you think its financially viable to run an ethical debt collection agency?

It might depend on what you mean by ethical. Certainly there's a world where treating people well makes them more interested in cooperating with you and that leads to a higher collection rate. I have no idea whether we inhabit that world.

Doesn't use the shady, illegal tactics + settles for less than the dollar value of the debt.

For instance, they buy it for $.05 and settles for whatever the debtor can reasonably pay that covers costs plus a reasonable margin, like 100%. So they buy it at $.05 and let the debtor pay it off for $.10 + the collector's cost.

I'd guess that is something like 25-50% of the value of face value of the debt.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#63

Post by forca »

ams6110 wrote: post #26

I was called by a collector once. Old medical bill, the clinic had sent it to an old address and the mail forwarding had expired. Why they never called or tracked me down I don't know, but they eventually sold it to a collector who had no trouble finding my phone number. When they called I was confused at first, then remembered and realized it was legit, paid it, end of story. They were utterly professional and court…

Medical debt rankles me like nothing else. The US, supposedly the most advanced nation on Earth has the worst notion of all: health care for profit. Simply evil. Health care is a basic human right. Full stop. Health care should never be based on one's ability to pay. Never.

I pray I see socialised medicine in the US in my lifetime. If Hilary Clinton gets elected, the push for this will be stronger than the thin edge of a wedge President Obama has managed. We need a full single-payer tax-based system.

I pay the ridiculous sum of $700 US dollars a month for my family's health insurance. If we raise taxes by 10% for every American, we could have awesome health care. I'd gladly take the 10% tax over $8400 a year I pay now. Sick, capitalist theft. I feel I've been politely robbed every pay period.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#64

Post by larrywright »

ams6110 wrote: post #26

I was called by a collector once. Old medical bill, the clinic had sent it to an old address and the mail forwarding had expired. Why they never called or tracked me down I don't know, but they eventually sold it to a collector who had no trouble finding my phone number. When they called I was confused at first, then remembered and realized it was legit, paid it, end of story. They were utterly professional and court…

I spent 16 years working for a medium-sized company that did debt collections, among other things. I think your experience is probably more the norm. There are certainly bad companies out there, and no shortage of horror stories, but I saw a lot of effort put into compliance, and training, and quality to ensure that collectors played by the rules.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#67

Post by fred_durst »

eli wrote: post #51
blhack wrote: post #34

This is one of the most unbelievable articles I've ever read. If you didn't read it all the way through, do so over lunch or something; it's amazing. The idea of "millions of dollars" worth of debt being traded for around on thumb drives, and that all those thumb drives really contain are excel spreadsheets is mind boggling . Those people in those spreadsheets are real people , and they're being completely duhumanize…

Sure, but on the other hand, let's say you run a small business. At some point you have customers who don't pay. What do you do? Write it off as a total loss? 1/12 is better than nothing.

I feel like I would be safe saying 99%(if not all) of this paper is not small business paper. These are the debts that are sold off in large parcels by banks and credit card companies.

Small businesses typically use flat fee collection agencies and rarely charge of the debt like this. Part of the reason is because to a small business charging off $10K in debt is going make them a couple hundred bucks at most.

There is no "little guy" getting stiffed by bad debtors in this story.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#68

Post by jliptzin »

a8da6b0c91d wrote: post #12
delinka wrote: post #4

Earlier quoted context omitted.

In the USA: Yes, the alleged debtor can insist on proof. The bad news: If collector mails the debtor, and the debtor doesn't respond for 30 days, the collector can report the debt to the credit reporting agencies. And we all know what a pain it is to get anything corrected on a credit report.

I don't understand why people freak out so much about their credit reports. I have no idea what my credit score is and don't care. I guess it's poor people who need credit to scrape by on a regular basis? If you have a lot of cash it seems like a completely empty threat. The bank is not going to care about your $400 unpaid comcast bill when writing you a mortgage. People who have declared bankruptcy twice are getting…

Even rich people take out mortgages, for plenty of reasons. Banks will look for any reason to charge you a higher interest rate. That $400 unpaid comcast bill is a perfect excuse for them to charge you an extra $15,000 in interest or more on a loan (over the course of the loan's lifetime).

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#69

Post by fred_durst »

Iftheshoefits wrote: post #20
res0nat0r wrote: post #13

Earlier quoted context omitted.

Then why would anyone pay their bills if they can buy their debt back for 1/10th of what they owe?

In addition to the credit issues the other commenters noted, there is the issue of taxes in the case of "chargeoffs." One will get an income statement from the credit issuer for the fraction of the debt they write off. Odds are if one is in the position of having debt collectors come after them they'll be unlikely to afford the taxes on the "income."

Exactly. Buying your debt off for a penny on the dollar is probably the stupidest thing you could do financially. You would be trading $10,000 in credit card debt, with a fair amount of legal protections, for $4,000 in IRS debt with very few legal protections.

Re: Inside the Dark, Lucrative World of Consumer Debt Collection

#70

Post by opendais »

zem wrote: post #54
opendais wrote: post #35

Earlier quoted context omitted.

Do you think its financially viable to run an ethical debt collection agency?

this guy sems to be trying: http://blogs.hbr.org/2013/08/the-debt-collection-company-th/

Ya, that sounds like a workable solution :)
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