Every consumer should know that invoking current consumer protection laws will stop the collection activities of a junk debt buyer.
Junk debt buyers are companies that buy batches of thousands of discharged credit card accounts from the credit card banks for pennies on the dollar (under 10 to 15 cents per dollar of debt). Junk debt buyers also resell these accounts to each other for as little as less than one cent per dollar of debt. As an example of such purchases, Business Week reported Portfolio Recovery Associates, a large national junk debt buyer, acquired 1,030 portfolios over an 11 year period with a face value of $35.3 billion for $791.6 million, representing more than 16.7 million customer accounts. That averages out to less than three cents per dollar of credit card debt.
Based on those fractions, according to the Credit Card Debt Survival Guide, junk debt buyers do not have to collect on a majority of those debts. If they collected on just less than half, they would be hugely profitable.
A general lack of consumer knowledge of the federal Fair Debt Collection Practices Act (FDCPA) gives junk debt buyers confidence in their ability to collect on these cheap debts. Junk debt buyers through their collection agencies mail tens of thousands of collection letters to consumers holding discharged credit card debt. Most addressees do not properly answer this initial communication in writing asking for documentation of the debt. If a consumer knew this batched debt comes on computer tape in groupings of thousands, sometimes millions, of accounts with little or no original documentation, they might respond more confidently.
When contacted by telephone and bullied with a false lawsuit, many consumers out of honesty and ignorance of the FDCPA admit to the undocumented debt and make the debt collector’s task easier.
The original-creditor credit-card banks collection calls are not covered by the FDCPA, but those of junk debt buyers and their collection agencies are covered. A well written letter, like the ones that can be found in the Credit Card Debt Survival Guide, invoking sections of the FDCPA will force the junk debt buyers to stop their collection efforts including the placement of negative marks on the consumer’s credit report.
Related posts:
- Be the Consumer Credit Card Debt Collectors Do Not Want to Collect From
- How to Get Credit Card Debt Collectors to Focus Their Energy Elsewhere
- Beating Credit Card Debt Collectors at Their Own Game
- Your Monthly Credit Card Debt Payments; What Happens If You Cannot Make Them?
- What Happens When You Cannot Make Your Monthly Credit Card Debt Payments?
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