A consumer with knowledge of existing consumer protection laws can stop a junk debt buyer's credit card debt collection attempts.
Junk debt buyers are investors who purchase large blocks of written off credit card debt. These purchases are typically for about 10 cents per dollar of debt with each purchase totaling in the millions of dollars. Junk debt buyers repackage and resell this debt to each other for smaller and smaller sums, sometimes less than one cent per dollar of debt. In an illustration of this reported by Business Week, Portfolio Recovery Associates, a large national junk debt buyer, over an 11 year period paid $791.6 million for $35.3 billion of debt in 16.7 million customer accounts. That was less than an average of three cents per dollar of credit card debt.
According to the Credit Card Debt Survival Guide, those numbers indicate a junk debt buyer does not have to collect on even half of the debt purchased. They would be quite profitable, if they collected on a third of the debt.
The federal Fair Debt Collection Practices Act (FDCPA) can protect a knowledgeable consumer from junk-debt-buyer collection efforts, but junk debt buyers rely on the fact most consumers are not that knowledgeable about the FDCPA. Collection agencies for junk debt buyers send out first notices and most consumers do not respond in writing asking for documentation of the debt, as they should. When they purchase this debt in huge computer tape batches, junk debt buyers receive little original documentation of each debt; documentation that the FDCPA requires the junk debt buyer to provide to the consumer if asked.
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.
Junk debt buyers' and their collection agents' debt collection efforts, unlike the original credit-card-bank creditors, are covered by the FDCPA. With a properly crafted written response, like the ones that can be found in the Credit Card Debt Survival Guide, these debt owners and collectors must stop their collection activities including no negative marks on a consumer's credit report. - 29969
Junk debt buyers are investors who purchase large blocks of written off credit card debt. These purchases are typically for about 10 cents per dollar of debt with each purchase totaling in the millions of dollars. Junk debt buyers repackage and resell this debt to each other for smaller and smaller sums, sometimes less than one cent per dollar of debt. In an illustration of this reported by Business Week, Portfolio Recovery Associates, a large national junk debt buyer, over an 11 year period paid $791.6 million for $35.3 billion of debt in 16.7 million customer accounts. That was less than an average of three cents per dollar of credit card debt.
According to the Credit Card Debt Survival Guide, those numbers indicate a junk debt buyer does not have to collect on even half of the debt purchased. They would be quite profitable, if they collected on a third of the debt.
The federal Fair Debt Collection Practices Act (FDCPA) can protect a knowledgeable consumer from junk-debt-buyer collection efforts, but junk debt buyers rely on the fact most consumers are not that knowledgeable about the FDCPA. Collection agencies for junk debt buyers send out first notices and most consumers do not respond in writing asking for documentation of the debt, as they should. When they purchase this debt in huge computer tape batches, junk debt buyers receive little original documentation of each debt; documentation that the FDCPA requires the junk debt buyer to provide to the consumer if asked.
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.
Junk debt buyers' and their collection agents' debt collection efforts, unlike the original credit-card-bank creditors, are covered by the FDCPA. With a properly crafted written response, like the ones that can be found in the Credit Card Debt Survival Guide, these debt owners and collectors must stop their collection activities including no negative marks on a consumer's credit report. - 29969
About the Author:
Learn about the many strategies for eliminating credit card debt; some for those who can settle, some for those who cannot pay. Read all about them in the 230-page Credit Card Debt Survival GuideMatt Highlander writes for the Guide.
