“Debt buying” affects millions of Americans and takes place when large companies buy and sell billions of dollars of debt. Credit card companies, hospitals, personal loan companies, banks and other lenders regularly sell and resell debt – and this may include debt that you owe.
For example, if you open a Visa account with a local bank and eventually stop repaying on your loan, the credit card company terminates your account and starts sending collection letters. The credit card company may decide to sell your debt for cash. Depending on how delinquent the debt is, a debt buyer may pay only 4 or 5 cents on the dollar. Your debt will then be packaged along with other similar debt and sold in bulk to a debt buyer at this discounted rate. The debt buyer will then attempt to collect the debt by calling you or the buyer may retain a lawyer and sue you.
Debt buying is legitimate as long as the debt buyer follows the rules. Debt buyers also realize that most consumers do not know the rules so the debt buyers often take advantage of a consumer’s limited knowledge.
Some debt buyers practice illegal tactics including:
- Repeated collection calls that violate the Fair Debt Collection Practices Act ban on harassment and after hours calls
- Misleading consumer into consenting to autodialed calls
- Failure to respond to consumer disputes of debt
- Farming debt to law firms for litigation without appropriate documentation
- Threatening consumers with lawsuits for debts where the statute of limitations has run
- Collecting on debt where the debt buyer has no documentation
The Consumer Financial Protection Bureau is starting to go after debt buyers who pursue illegal practices. For example, the CFPB recently imposed a $79 million penalty against to large debt buyers – Encore Capital Group and Portfolio Recovery Associates.
The bankruptcy attorneys at Canterbury Law Group are uniquely qualified to represent you in your debt related litigation. If you’re experiencing actions from debt buyers that may be illegal, call us today to schedule your consultation. 480-240-0040