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THE DEBT BUYING INDUSTRY

  • Jared Hartman, Esq.
  • Posted on August 20, 2016

 

Dealing with a debt buyer can often be a frustrating and stressful experience. In general, debt buyers purchase old debts for a small percentage of how much is owed, and then aggressively pursue collection efforts upon the balance (or large percentage thereof) in order to maximize their ability to profit upon the debt as much as possible. Many debt buyers give their collection agents bonuses and commission based upon the amount they collect, which gives the collection agent incentive to put significant pressure upon the consumer to pay. While this industry is a legitimate and legal industry, the manner in which they operate can easily violate consumer protection laws through misrepresentations about how much is owed, whether interest and collection costs can rightfully be added onto the principle, misrepresentations about potential lawsuits, and in the most extreme cases verbal abuse and personal attacks upon the consumer.

On June 5, 2016, John Oliver highlighted this industry and its flaws in his HBO show “Last Week Tonight with John Oliver”, which can be viewed here:

his episode of Oliver’s show explains how easy it is for mistakes to be made, because the typical manner in which the debts are sold and bought is simply through Excel spreadsheets with just basic information about the consumer and how much is owed, which might not provide the debt buyer with sufficient information as to whether the debt is legally enforceable, is actually collectible, if prior payments had been made, and whether any legal stipulations had been included in the original loan agreement. Obviously, the debt buyer who purchases the debt for pennies on the dollar would want to engage in as little review of the account as possible, because the more effort that is put into review before collection means there is less profit to be made when compared to the effort being conducted. In short, quickly collecting as much as possible with as little effort as possible yields the most profitable return in favor of the debt buyer.

Oliver also highlights some of the more extreme and disturbing examples of how the debt buyers in this industry can harm consumers through harassment and oppressive conduct. At 7:02 of his episode, Oliver plays recordings of voicemails left by debt collection agents uttering threats of violence, threats of harassment, and even suggesting that one consumer should commit suicide because she/he is a loser. At 7:46, an undercover video is shown where a debt collection agent laughs and jokes about how he likes to call consumers’ employers at the employers’ home in order to put pressure upon the consumer to pay the debt by harassing the consumers’ employer.

Our law firm routinely pursues lawsuits for legal violations committed by debt buyers and debt collection agencies. If a debt collector is contacting you or a loved one, there is a very realistic possibility that they have already violated your rights. Do not hesitate to contact us for a free and confidential consultation to discuss your rights!