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 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.
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.
Even worse, when contacted by telephone and threatened with a bogus lawsuit, many consumers out of honesty admit to the undocumented debt, making the debt collector's job easy.
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. - 29866
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.
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.
Even worse, when contacted by telephone and threatened with a bogus lawsuit, many consumers out of honesty admit to the undocumented debt, making the debt collector's job easy.
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. - 29866
About the Author:
If you are seeking credit card debt relief, whether you can afford to settle or not, read Credit Card Debt Survival Guide. Matt Highlander writes for the Guide.
