Every consumer should know that invoking current consumer protection laws will stop the collection activities of a junk debt buyer and eliminate credit card debt they claim against the consumer.
Junk debt buyers invest in discharged credit card debt for pennies on the dollar. They also sell and resell the debt they have purchased to other junk debt buyers for smaller and smaller sums of money. Business Week, as an example, reported Portfolio Recovery Associates, a large national junk debt buyer, paid $791.6 million over an 11 year period for $35.3 billion of debt in 16.7 million customer accounts. For each dollar of credit card debt that averages less than three cents.
Based on those fractions, according to the Credit Card Debt Survival Guide, junk debt buyers do not have to collect on a majority of those debts. If they collected on just less than half, they would be hugely profitable.
Junk debt buyers are relying on most consumers’ ignorance of the federal Fair Debt Collection Practices Act (FDCPA) and similar state laws. When a collection agency for a junk debt buyer sends out thousands of dunning letters to discharged-account holders, most recipients do not reply in writing demanding validation of the debt. If only they did, because the junk debt buyer can produce little documentation from the original creditor to substantiate the debt and the consumer could eliminate credit card debt.
The junk debt buyer’s collection agents frequently call consumers before the first notice arrives and violate the FDCPA by threatening a phony lawsuit if payment arrangements are not made promptly. Unfortunately for them, some consumers honestly admit to the alleged, undocumented debt to these strangers and make the collection agency’s job easier.
The original-creditor credit-card banks collection calls are not covered by the FDCPA, but those of junk debt buyers and their collection agencies are covered. A well written letter, like the ones that can be found in the Credit Card Debt Survival Guide, invoking sections of the FDCPA will force the junk debt buyers to stop their collection efforts including the placement of negative marks on the consumer’s credit report. It will make it possible for the consumer to eliminate credit card debt claimed by the junk debt buyer.
Matt Highlander researched the Credit Card Debt Survival Guide. Learn about debt settlement and legal nonpayment strategies to eliminate credit card debt. Matt Highlander is a contributing writer. www.credit-card-debt-survival.com
