How the Business of Debt-Buying Affects Consumers

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Collectively, American consumers are currently over $12 TRILLION in debt. Out of that $12 trillion, more than $400 billion has been deemed ‘seriously delinquent.’ Outside of a library fine I once racked up because a book that fell into the crack of my couch, I get pretty panicked if someone tells me I’m seriously delinquent. Just the sound of the phrase rolls off the tongue in a negative way, doesn’t it?

As it should: debts don’t get earmarked as seriously delinquent until they are 90 days or more overdue. That may not seem like a long time in the grand scheme of life, but in the world of debt, three months of failing to make a payment is long enough for lenders to get good and fed up.

What is debt buying?

Because of the whopping trillions of dollars of consumer debt in this country, an entirely new industry has spontaneously developed, and it’s more than a little shady. Lenders don’t want to wait to get paid. Seriously delinquent debts are often sold by lenders to companies whose sole purpose is to buy debt for pennies on the dollar in order to make at least a tiny bit of money rather than none at all. This process is part of the dubious debt buying industry – where debt is bought and sold, bought and sold ad infinitum, potentially transferring hands a veritable profusion of times.

Astoundingly, debt buyers can collect on the full amount of an original debt, even though they will have paid a supremely small fraction of that amount when they purchased it from the lender.

What does this mean for indebted consumers?

The debt buying blitz in the United States is problematic for several reasons. Firstly, many original lenders don’t supply debt buyers with much information about the debts that are switching hands. Compounding this issue is the fact that debt buyers are often unscrupulous about whether or not the debts they purchase are even valid. That means that they may purchase debts with missing or incorrect data that can lead to them harassing you for money you don’t even owe.

Ruthless debt buyers and collectors typically don’t care whether they’ve got the right person on the phone or whether the debt has been discharged via bankruptcy. They don’t even check to see if the statute of limitations to collect on a debt has passed. They’ve got a list of names and contact information, and often times millions of dollars they can potentially pocket if they can convince enough people to fork over the money.

Fueled by a strong desire for money, when debt buyers set out on their mission to collect, they’ll frequently go to unimaginable lengths in order to get you to pay. Threats, lies, scare tactics, cursing, impersonation, degradation, and humiliation are just a few of the strategies employed by people in the debt-buying and debt-collecting industry.

If you’ve experienced any of the above and feel that 1) you don’t owe the debt in question; or 2) a debt collector has acted illegally – you have recourse. Veitengruber Law helps people like you every day, and we’ve grown quite adept at dealing with distressing debt collectors. Want to find out if we can help you? Call us now: (732) 852-7295. We will not overcharge you and we’ll consult with you for a full hour free of charge. Best of all – we’ll put an end to your debt problem once and for all.

Image credit: Pat Pilon

Know Your Rights: When Debt Collectors Go too Far

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If you’re being hounded by an unstoppable “debt collector” who’ll seemingly go to great lengths in order to get your money, you need to be aware of your rights as an American consumer.

It’s been a hot topic in the news recently in many states across the nation. Too many people are being tricked, bullied and threatened by these so-called debt collectors pretending to be law enforcement, detectives or investigators working on the case of money that you either owe, stole, or fraudulently borrowed.

As a rule, debt collectors are hired by a third party to whom you legally owe money. Unfortunately, many debt collection firms today are practicing unscrupulous methods in order to get you to pay up, even when you don’t legally owe a cent. And a lot of them are stepping way over the line of legality.

Frequently, these types of “debt collectors” are actually scam artists attempting to trick people out of their money. There are several different schemes running at the moment nationwide that you should be aware of in order to protect yourself.

Sometimes, the debt collectors in question call borrowers and accuse them of committing a crime, such as check fraud or theft by deception. They will demand immediate payment, and if you do not comply, they will threaten with a warrant for your arrest. You should in no way respond to these threats, and if the harassment becomes chronic, you may need to contact an attorney to enforce your rights.

Thankfully, in 2015, new regulations are set to take effect in order to prevent these characters from performing such deceptive and aggressive actions against borrowers. The tough new regulations will help protect consumers (who are already struggling financially) from being taken advantage of and losing money that they really can’t afford to give up.

So far in 2014, there have been over 20,000 complaints about harassing debt collectors just in the state of New York alone.

As a borrower/consumer, be aware that debt collectors/scam artists will say almost anything in order to get your money, even if the statute of limitations on your debt has been reached. They may even demand that you pay money on a debt that you have already paid in full, citing interest that you never paid or other lies to encourage you to open your checkbook. Lastly, they may invent a debt that you supposedly owe, which never even existed.

Unfortunately, the debt collection industry has been unregulated for far too long and the unscrupulous actions of members of the industry have finally gone too far. Lawmakers are taking notice and taking action.

The new rules will help those thousands of people in New York, and eventually across the country, who have been working hard to clear their debts in order to raise their credit scores and get back on track financially.

The new regulations imposed upon the debt collection industry will require debt collectors to provide consumers with specific information about the debt being collected. For example, they will be required to disclose whether or not a debt has reached its expiration date. Debt collectors will also have to give significant credence to any dispute given by the consumer in question regarding the debt owed.

Additionally, debt collectors will henceforth be required to provide debtors with a detailed written agreement confirming any debt settlement agreement that has been reached. Consumers will also be given a copy of this written agreement, and they will also receive written confirmation once the debt has been paid in full.

Image Credit: Patrick Hoesly