hard numbers on junk debt buying CA's

[Feel violated]

We all know the operating model of a junk debt buying collection agency.

They simply buy debt for pennies or less on the dollar and attempt to collect.

In terms of validating the debt, that in general they cannot do simply because the OC is out of the picture and has zero interest in helping.

When you go to collector forums, they toss around the statistics that some huge percent of us are deadbeats and they are performing a valuable social function. Ignoring the certainty that some of are innocent victims wrongly dunned. So its hard feelings on both sides.

But can anyone lead me to any good studies on what the actual numbers are in the area of wrongly dunned vs. correctly dunned even if proof in the area of proper debt validation can't be produced.

And hopefully such a credable study or studies would seperate the track records of collection agencies collecting for an original creditor and collection agencies that own the debt.

[codename_fortyseven]

I don't think there is a huge % of people that default on their obligations, in fact I know it isn't. Mortgage foreclosures run about 3%, and reading about asset backed securities will give you a clear picture for one product vs another. (credit cards vs cars, vs mortgages)

I just think when a person defaults, it isn't because they have a boatload of money and just feel like pissing off all their creditors just for fun.

They typically have some serious financial strain or loss of income such as a job loss or a medical illness.

The social function argument is bunk. If anything, any redeeming value they create for the financial industry is negated by the gross harm done to people's mental health, stress, credit score, financial situations, and abuse of the court system.

I know there was a court case where a collector dunned every john doe in an area and just filed suit. The judge threw the book at the lawyer.

You can't forget about identity theft, one of the fastest growing crimes that undoubtably is ensnaring innocent consumer after innocent consumer. The end result are charged off accounts and trashed credit and JDB's coming out of the woodwork to harass people whose only crime was replying to a pishing scam or DLing a trojan horse.

Contact ACA and see if they have any numbers on it.

[Feel violated]

Thank you codename_47 for responding to my post.

Sadly, you have your opinion, I have an opinion that largely agrees with yours, and some one else may hold a different opinion. In this calculus, one person's guess is as good as anothers.

Only when we can get to unbiased and scientific studies can we progree beyong that opinion phase that gets no one anywhere.

Surely some scientific body or public interest research group has researched that question and can provide reliable numbers.

[CreditSuperstar]

We all know the operating model of a junk debt buying collection agency.

They simply buy debt for pennies or less on the dollar and attempt to collect.

In terms of validating the debt, that in general they cannot do simply because the OC is out of the picture and has zero interest in helping.

When you go to collector forums, they toss around the statistics that some huge percent of us are deadbeats and they are performing a valuable social function. Ignoring the certainty that some of are innocent victims wrongly dunned. So its hard feelings on both sides.

But can anyone lead me to any good studies on what the actual numbers are in the area of wrongly dunned vs. correctly dunned even if proof in the area of proper debt validation can't be produced.

And hopefully such a credable study or studies would seperate the track records of collection agencies collecting for an original creditor and collection agencies that own the debt.

Feel,

Let me ask you:

Who cares what the CA paid for the debt. If it's owed I would pay it if validated. Obviously PFD.

Regarding validation, if I am an OC I'd certainly forward all relevant documents. If I am the DP, I'd INSIST on receiving them if I brought the account.

What forums do you surf? I want to surf more than one if possible.

They are scumbags, no doubt. There is good and bad on both sides however. Many people don't want to pay until they realize what it costs them in the long run.

Ever notice how no collector EVER has a collector after them?? lol

[DocDon]

You're looking for information that is almost impossible to acquire.

Right off the top, you first have to have consumers who are savvy on the law (we have almost 8,000 members and there's 280M in the U.S.). This means they have to know if they are being dunned correctly or not - even if a study were launced the answer to "were you dunned correctly?" would probably be "I don't know".

Why hasn't there been a report on this on the evening news? Could it be because basically nobody knows what's going on out there - to the point that an editor wouldn't even think it to be a worthwhile story to run?

Educating the consumer en masse comes first, then you'll start seeing an uproar of protest and flood of complaints.

[ghacorp]

Well, you are correct about junk debt buyers; they are scourges. The idea is take the load off of the lender for pennies on the dollar after the amount has been inflated and then suing people for the whole enchilada. UNIFUND is one of the worst. They persuade creditors to sell uncollectables, then take tax deductions for the rest. UNIFUND does what many creditors simply don't have the heart to do -- rape and screw down on their luck debtors and do so in a way to cause some if not most considerable pain and suffering. It's their business and they want their money, case closed! As a result of savvy consumers, the norm is to obtain all of the statements for the accounts they purchase. In most cases, it's enough in most courts for a summary judgment. That IS validation for most courts and debtors can do little about it. They can now even hire representatives from the OC to come into court to attest to the debt they now own. What to do if UNIFUND's won the upper hand? File bankruptcy as in bk court they will have considerable difficulty filing a proof of claim.

[codename_fortyseven]

IMHO, look at the historical default rates for a particular financial product such as credit cards, and extrapolate that out.

Maybe look at prime cards, subprime cards, and such. Take the average # of cards per person in the US. Figure out approx how many should default in any given year.

Cross referance that with Asset's information, since they are a publicly traded company. See how many people they contact per month or start checking out the collector's websites.

See if the numbers jive.

If Asset contacts 10M people per year, but your estimates for cards going delinquent is maybe only 250k, then something isn't right.

[DocDon]

Little outdated, but interesting info:

http://www.creditcollectionsworld.com/rank_topdebt.htm

[imagewell2]

What are some other collection agency sites? Id really love to learn how they do busines..

[Feel violated]

To imagewell---I have been playing around on collectionindustry.com

there are others--just google debt collection forums.

To doc don we have a newer article on this site posted by divemedic in

April/05 -long url but go to credit article of the week --scroll down to someone is onto us. Fairly good article by Liz Pullian Weston called Zombie Debt collectors dig up your old mistakes. Course I have a small quarrel with the title because it need not be your old mistake. Could be a clerical error,

someone elses account, don't matter, its your turn in the barrel. And I agree with you, consumer education and outreach is what is most needed.

To future creditsuperstar who posted that if you were a OC you would provide documentation and if you were a debt purchaser you would require documentation with the purchase. Well, I just have two things to say to you. You seem to be a fine human being and seem to posess some ethics and logic. You are therefore unemployable in the debt collection industry.

But in answer to your other question, I spend alot of time on this site, some on debtconsolidation, and have recently found the art of credit. But google can help you find many sites and I tend to ask for forums on various areas. But I am fairly new, this question about good web sites is open to input from any poster. We can all learn from other points of view.

[CreditSuperstar]

To future creditsuperstar who posted that if you were a OC you would provide documentation and if you were a debt purchaser you would require documentation with the purchase. Well, I just have two things to say to you. You seem to be a fine human being and seem to posess some ethics and logic. You are therefore unemployable in the debt collection industry.

Feel-

Thx... I think... lol