Scavenger Debt Collectors- General Budget & Finance

Beware of Scavenger Debt Collectors Debt > Beware of Scavenger Debt Collectors You defaulted on your credit card debt a long time ago. Your credit report indicates that the debt was written off by the credit card company a year ago. Your account was turned over to a collection agency who

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  1. #1
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    Default Scavenger Debt Collectors


    Beware of Scavenger Debt Collectors
    Debt > Beware of Scavenger Debt Collectors

    You defaulted on your credit card debt a long time ago. Your credit report indicates that the debt was written off by the credit card company a year ago. Your account was turned over to a collection agency who sent you a few form letters and called you a few times, but eventually they gave up and now you're home free. You think you got out of paying this debt, right? Don't get too comfortable just yet.


    There is a new investment opportunity and it isn't real estate. It is debt collecting. Groups of investors are forming companies and purchasing old debt from original creditors for literally pennies on the dollar and are going after old, written off credit card debt with a vengeance. The industry is so lucrative that two of these investment companies have made the Fortune 500 list.


    The term that has been coined for companies who purchase uncollectible, written-off debt is "scavenger debt collectors" but few of them will admit they are collection agencies. They usually call themselves litigation firms to scare the hell out of you, and they use very aggressive collection techniques that often violate the provisions of the Fair Debt Collection Practices Act. Many of them claim that they are not bound by the Fair Debt Collection Practices Act, but they most certainly are.


    Scavenger debt collectors buy old debt for just pennies on the dollar and try to collect the whole amount due plus interest. For example, suppose you owed Citibank exactly $1,000. Citibank wrote off the account when they couldn't collect from you, turned it over to a debt collection agency, who also couldn't collect from you. Now, Citibank has sold it to a scavenger debt collection firm for about $70.00. And the scavenger debt collector is going to come after you for the entire $1,000 plus interest. Pretty lucrative, huh?


    Of course, the scavenger debt collectors know that most of what they have purchased is uncollectible -- that's why they bought it for just pennies on the dollar. But they are going to use intimidation tactics to collect as much as they can. Please do not let them scare you. Most of what they say is bluffing to get you to send them as much as you can as quickly as you can to avoid being sued.


    If you are contacted by a scavenger debt collector, this is what will happen:


    First of all, they will let you know that they are a "litigation firm" who is preparing the papers to sue you, but they wanted to contact you and perhaps work out some sort of settlement or pay off agreement. They will lead you to believe that if you don't pay, you will be sued in the next few weeks. But remember, they are probably not a litigation firm and the person on the phone is just a regular debt collector, but he or she will lead you to believe he is an attorney or a paralegal who works for a law firm, when in fact, they are just regular debt collectors. Do not let the "litigation firm" term scare you. Ask the person with whom you are speaking if he/she is an attorney and if the company is an actual law firm. In fact, ask a lot of questions about who it is that now owns your old debt. Chances are you will find that they are a group of investors who aren't really a litigation firm.


    Secondly, the scavenger debt collector won't tell you that they purchased the debt for .07 to .10 cents or even as little as .03 cents on the dollar. They will go into a grand epic tale about how their investors purchased this debt and they must get their money back. If you tell them you don't have the money, they will try to determine how much you do have and will start telling you they will accept 80%, then 70%. The collector might tell you he has to consult with the investors and find out if he can offer you a really good deal -- 50%. He calls you back and says he was able to convince them to accept 50% as payment in full provided you can get it to them in the next five days.


    The truth is that they will accept as little as 25 percent as a settlement. They will likely not accept anything less than 25 percent because they purchased your debt to make a really nice profit.


    If you refuse to pay, they will turn your account over to a real attorney, who will send you a threatening letter in yet another effort to intimidate you into paying. Note that attorneys are forbidden from sending letters claiming they will sue when they won't or can't, so if you receive such a letter from a real attorney, pay attention to what it says to determine if you are really going to be sued. Does the letter say they are exploring their legal options or that papers are being prepared for suit? If it says the latter, you are probably getting sued for real since attorneys can't say it if it isn't true.



    In any event, they will not actually sue you unless their asset search reveals you have assets to seize. They aren't going to spend any money suing you if you don't have anything. After all, you can't get blood out of a turnip. And don't think you can hide assets, because with today's computers and vast databases, they can find out what you have in checking accounts, savings accounts, what real estate you own, etc. You really have very little privacy anymore in terms of your finances.


    What property can they seize? It depends on what state you live in. Some states, like Texas, are very debtor-friendly and creditors can't do much. But other states, such as Vermont, are creditor-friendly and they can attach your wages, levy your bank account or put a lien on your property.


    Scavenger debt collectors are notorious for purchasing really old debt -- debt so old that the statute of limitations has run. If a debt collector contacts you regarding an old debt, do not admit that you owe the debt and do not agree to make any payments. Simply tell them that the "statute of limitations has run on this debt and do not contact me again". If they continue contacting you, send them a certified letter, return receipt requested, telling them not to contact you about the debt again. Remember -- DO NOT ADMIT THAT YOU OWE THE DEBT, DO NOT AGREE TO PAY THE DEBT, AND DO NOT AGREE TO SEND ANY MONEY TO THEM. If you do, then the statute of limitations might start running all over again, giving them the legal right to sue you.


    source-bcsalliance
    Mdowdy

  2. The Following 11 Users Say Thank You to mdowdy For This Useful Post:


  3. #2
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    Default Re: Scavenger Debt Collectors


    That was very informative. I know a little about debt collection, but not anywhere near what you have posted!

    Thanks for the heads up!
    Terra , Wife to Kevin, Mom to Cassidy (12) and Ciara (2)

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    Learn something new everyday. I use to work for a collection agency, I hated that job. I am not a mean person at all, and that's what they wanted me to do, is to be rude and pushy with people. I couldn't do it, I understand what it's like to get behind on the bills. So that job was out of the question for me. Thanks for the information on this though, I have been contacted before on a bill that wasn't even mine. They said that they were going to sue me, I told them to go for it. Never heard another word from them again.
    Tonia

    Wisdom is doing now what you will be happy with later on.

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    Default Re: Scavenger Debt Collectors


    Very interesting reading here mdowdy. Pay as you go and remember,

    not to try and ditch any DEBT you may OWED. It may come back to haunt you.
    JoAnn
    "Joy is not in things. It is within us"

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    I have had someone call me for this, another thing will try to do if you say that you do not owe them money is to verify who you are. They will ask you for your social security number-hopefully everyone knows that you do not, never, ever give that information for anything. I laughed at the lady and asked just how stupid she thought I was. She thought I should verify my name, social security, telephone, and address. I hung up, they never called back. You know if you owe someone don't fall for a trick-this is an easy way to steal someone elses identity.

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    I never give out my ss# unless I have made contact with the company and know the people I am talkig to is legitamately with the company. you would think these people would be smart enough to know people who have any sorts of common sense would not realease this information to just anyone that calls.
    Mdowdy

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    Default Re: Scavenger Debt Collectors


    I have "debt buyers" calling me constantly at my work wanting to buy the accounts that have filed Chapter 11, they know they will get the money but hope my company doesnt want to wait.
    Last edited by faxonfive; 01-18-2009 at 01:20 PM. Reason: fingers are to fast and I hade to correct the spelling :)
    Tragedy, sadness, loneliness and despair taught me that life is really a beautiful thing; if it wasn't I wouldn't be able to recognize that anything was wrong - Lynn in Virginia

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    I can understand this being a money maker of sorts but wouldn't it be safe to figure if you didn't pay it the first time you aren't going to pay it this time?
    Mdowdy

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    south bend IN cat lady
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    Default Re: Scavenger Debt Collectors


    I had question after reading this so I thought I would post the answers. Thanks for the post.

    Information from Fair Debt Collection Practices Act

    Goverment pamplet





    A debt collector may not use unfair or unconscionable
    means to collect or attempt to collect any debt. Without limiting
    the general application of the foregoing, the following
    conduct is a violation of this section:
    (1) The collection of any amount (including any interest,
    fee, charge, or expense incidental to the principal obligation)
    unless such amount is expressly authorized by
    the agreement creating the debt or permitted by law

    Meaning if your original bill was non interest they can not collect any



    Prohibited conduct

    The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:

    Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time[2]
    Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted[3]
    Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.[4]
    Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer[5]
    Contacting consumer known to be represented by an attorney[6]
    Communicating with consumer after request for validation: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address[7]
    Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer[8]
    Publishing the consumer's name or address on a "bad debt" list[9]
    Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law[10]
    Threatening arrest or legal action that is either not permitted or not actually contemplated[11]
    Abusive or profane language used in the course of communication related to the debt[12]
    Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney) or threatening such action[13]
    Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business [14][15]
    Reporting false information on a consumer's credit report or threatening to do so in the process of collection[16]

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    Default Re: Scavenger Debt Collectors


    Simply tell them that the "statute of limitations has run on this debt and do not contact me again". If they continue contacting you, send them a certified letter, return receipt requested, telling them not to contact you about the debt again. Remember -- DO NOT ADMIT THAT YOU OWE THE DEBT, DO NOT AGREE TO PAY THE DEBT, AND DO NOT AGREE TO SEND ANY MONEY TO THEM. If you do, then the statute of limitations might start running all over again, giving them the legal right to sue you.
    Anyone know what the statue of limitations time frame is ? Is it the 7 yr mark? Just wondering.
    Hope Everyone Is Enjoying The Day. Best Wishes From MN ~ Pamela

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    south bend IN cat lady
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    I have wonderd that my self. I had a Dr wait a year to bill me. My SIL says I can tell them I wont pay then but I am not sure. Really they need a reasonable time frame for the first billing. A year later my financial situation can be anything. Then they always act like they need the money sooo bad. Not to mention a year later I wont remember weather your chargeing me right or not.

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    Quote Originally Posted by redring View Post
    I have wonderd that my self. I had a Dr wait a year to bill me. My SIL says I can tell them I wont pay then but I am not sure. Really they need a reasonable time frame for the first billing. A year later my financial situation can be anything. Then they always act like they need the money sooo bad. Not to mention a year later I wont remember weather your chargeing me right or not.
    Maybe not knowing if they are charging you right is the reason they are waiting. I think at that point I would make them send me a copy of the paperwork, it should be in your chart so wouldn't be hard to make a copy and send it
    Mdowdy

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    Quote Originally Posted by redring View Post
    I had question after reading this so I thought I would post the answers. Thanks for the post.

    Information from Fair Debt Collection Practices Act

    Goverment pamplet





    A debt collector may not use unfair or unconscionable
    means to collect or attempt to collect any debt. Without limiting
    the general application of the foregoing, the following
    conduct is a violation of this section:
    (1) The collection of any amount (including any interest,
    fee, charge, or expense incidental to the principal obligation)
    unless such amount is expressly authorized by
    the agreement creating the debt or permitted by law

    Meaning if your original bill was non interest they can not collect any



    Prohibited conduct

    The Act prohibits certain types of "abusive and deceptive" conduct when attempting to collect debts, including the following:

    Hours for phone contact: contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time[2]
    Failure to cease communication upon request: communicating with consumers in any way (other than litigation) after receiving written notice that said consumer wishes no further communication or refuses to pay the alleged debt, with certain exceptions, including advising that collection efforts are being terminated or that the collector intends to file a lawsuit or pursue other remedies where permitted[3]
    Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously: with intent to annoy, abuse, or harass any person at the called number.[4]
    Communicating with consumers at their place of employment after having been advised that this is unacceptable or prohibited by the employer[5]
    Contacting consumer known to be represented by an attorney[6]
    Communicating with consumer after request for validation: communicating with the consumer or the pursuing collection efforts by the debt collector after receipt of a consumer's written request for verification of a debt (or for the name and address of the original creditor on a debt) and before the debt collector mails the consumer the requested verification or original creditor's name and address[7]
    Misrepresentation or deceit: misrepresenting the debt or using deception to collect the debt, including a debt collector's misrepresentation that he or she is an attorney or law enforcement officer[8]
    Publishing the consumer's name or address on a "bad debt" list[9]
    Seeking unjustified amounts, which would include demanding any amounts not permitted under an applicable contract or as provided under applicable law[10]
    Threatening arrest or legal action that is either not permitted or not actually contemplated[11]
    Abusive or profane language used in the course of communication related to the debt[12]
    Communication with third parties: revealing or discussing the nature of debts with third parties (other than the consumer's spouse or attorney) or threatening such action[13]
    Contact by embarrassing media, such as communicating with a consumer regarding a debt by post card, or using any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business [14][15]
    Reporting false information on a consumer's credit report or threatening to do so in the process of collection[16]
    great info here. Most collectors I think bank on a customer(I say customer because without people not paying they would not have a job) not knowing their rights.
    Mdowdy

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    Quote Originally Posted by tsgal View Post
    Learn something new everyday. I use to work for a collection agency, I hated that job. I am not a mean person at all, and that's what they wanted me to do, is to be rude and pushy with people. I couldn't do it, I understand what it's like to get behind on the bills. So that job was out of the question for me. Thanks for the information on this though, I have been contacted before on a bill that wasn't even mine. They said that they were going to sue me, I told them to go for it. Never heard another word from them again.


    Maybe tey should change their tactics. I know I would be more willing to pay someone if they are nice and try to work with me. If you call me calling me every name in the book and telling me how bad of a person I am, I'm not going to pay you just because I know you are probably getting paid on commission.
    Mdowdy

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    Default Re: Scavenger Debt Collectors


    Quote Originally Posted by tsgal View Post
    Learn something new everyday. I use to work for a collection agency, I hated that job. I am not a mean person at all, and that's what they wanted me to do, is to be rude and pushy with people. I couldn't do it, I understand what it's like to get behind on the bills. So that job was out of the question for me. Thanks for the information on this though, I have been contacted before on a bill that wasn't even mine. They said that they were going to sue me, I told them to go for it. Never heard another word from them again.


    Maybe they should change their tactics. I know I would be more willing to pay someone if they are nice and try to work with me. If you call me calling me every name in the book and telling me how bad of a person I am, I'm not going to pay you just because I know you are probably getting paid on commission.
    Mdowdy

 

 
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