Beware of debt buyers
The debt buying industry in this country generates billions of dollars per years, but there have been some practices that skirt the line between aggressiveness and fraudulent behavior.
To be clear, the debt buying industry thrives on paying creditors – banks and credit card companies, for example – a few pennies on the dollar for accounts that are considered uncollectable. An uncollectable debt may be one owed by someone who has no money or it may be one that the creditor doesn’t view as worth pursuing.
At any rate, debt buyers pick up those uncollectable debts and are notorious for being very aggressive in trying to squeeze money out of them. That only makes sense because the original creditors would have kept those accounts had it been relatively simple to collect on them.
The problem is that there are plenty of legitimate debts that can be collected by debt buyers, but there are a lot of them out there that are very questionable.
For example, I was contacted by a client who got a call at work from a debt buyer claiming that she owed over $20,000 on a debt that she thought she had negotiated away a couple of years past. Not only was that a horrible call to get at work, further investigation proved that the debt collector should have never made that call at all.
The debt buyer could not produce proof of the debt or even that it had been properly assigned by the original creditor. Those are two items that anyone collecting a debt should be able to produce immediately.
Furthermore, my client sent the original documents generated during settlement negotiations that established the debt had been forgiven. Once the debt buyer was presented with those documents, the company quietly vanished and we’ve not heard from them sense.
It seems that a lot of debt buyers rely heavily on collecting money from scared people without being able to produce much evidence that a debt is owed or the company in question has the right to collect it. Furthermore, a good number of those companies file suit and rely on getting a default judgment because the defendant won’t bother to fight the debt in court.
Of course, if you get a call about a valid debt, you will have to make arrangements to deal with it. However, if you get a call about a debt that you don’t think you owe or the collector can’t present proof that you owe the debt, it may be worth your time to contest it. Don’t be scared into covering debts that you are not obligated to pay.
This column was authored by Ethan C. Nobles and originally appeared in the Nov. 9, 2015, edition of the Daily Record in Little Rock.