| How to Stop a Junk Debt Buyer Attempting to Collect Older Credit Card Debt from You |
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| Written by Matthew Highlander |
| Saturday, 19 September 2009 16:05 |
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A consumer with knowledge of existing consumer protection laws can stop a junk debt buyer's credit card debt collection attempts.
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. With those fractions, junk debt buyers do not expect to collect on most of the debts, according to the Credit Card Debt Survival Guide. It is easy to see how if they collected on only 20 percent of the debt they would be 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. 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. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Matt Highlander has researched credit counseling, debt settlement, debt collectors and collection attorneys. If you are seeking credit card debt relief, read Credit Card Debt Survival Guide Matt writes for the Guide. |
| Last Updated on Thursday, 01 October 2009 18:45 |