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Debtors' Hell: National Crisis, Official Silence
August 2, 2006 (Boston Globe - Final part of four part series)
The debt business, as Donald Friedman, the chief operating officer of debt-buyer Liberty Point Corp., told hundreds of his assembled peers at their March 2005 gathering, is ''one of the sexiest, one of the most financially lucrative businesses you can get into.''
Boastful? Yes. Overstated? Hardly.
That year, businesses that specialize in debt for collection would purchase $66 billion in delinquent bank credit card accounts alone, paying just pennies on the dollar for the right to press consumers to pay up. That $66 billion represented a golden opportunity for them, and sudden vulnerability for an estimated 8 million card holders - all of them earmarked for repeated phone calls, dunning letters, lawsuits, wage garnishment, property seizure, and sometimes even arrest.
They generally owe the money, but seldom anticipate the consequences. A Spotlight Team investigation, which concludes today, found a system where debt collectors have a lopsided advantage; where debtors frequently face high-handed treatment; and where excessive fees can swiftly turn a small delinquency into a life-upending
financial crisis.
AntiSpin: This is the final installment of this excellent four part series. Reporters Beth Healy, Michael Rezendes, Francie Latour, and Heather Allen cover a corrupt system of debt collection in Massachusetts, but as this final part of the series points out, the problem is national in scope.
As we mentioned in comments on previous installments of this series, as members of the iTulip.com Community you may find yourself reading this series, that carefully documents the way masses of American citizens are systematically abused by credit agencies, collection agencies, the court system, and law enforcement, and want to do something about it. One way our community can help address the problem is to apply an innovative new person-to-person Internet based marketplace for lenders and borrowers called Prosper.com. Please follow this link to read more about Prosper and vote in our poll to express interest in participating.
August 2, 2006 (Boston Globe - Final part of four part series)
The debt business, as Donald Friedman, the chief operating officer of debt-buyer Liberty Point Corp., told hundreds of his assembled peers at their March 2005 gathering, is ''one of the sexiest, one of the most financially lucrative businesses you can get into.''
Boastful? Yes. Overstated? Hardly.
That year, businesses that specialize in debt for collection would purchase $66 billion in delinquent bank credit card accounts alone, paying just pennies on the dollar for the right to press consumers to pay up. That $66 billion represented a golden opportunity for them, and sudden vulnerability for an estimated 8 million card holders - all of them earmarked for repeated phone calls, dunning letters, lawsuits, wage garnishment, property seizure, and sometimes even arrest.
They generally owe the money, but seldom anticipate the consequences. A Spotlight Team investigation, which concludes today, found a system where debt collectors have a lopsided advantage; where debtors frequently face high-handed treatment; and where excessive fees can swiftly turn a small delinquency into a life-upending
financial crisis.
AntiSpin: This is the final installment of this excellent four part series. Reporters Beth Healy, Michael Rezendes, Francie Latour, and Heather Allen cover a corrupt system of debt collection in Massachusetts, but as this final part of the series points out, the problem is national in scope.
As we mentioned in comments on previous installments of this series, as members of the iTulip.com Community you may find yourself reading this series, that carefully documents the way masses of American citizens are systematically abused by credit agencies, collection agencies, the court system, and law enforcement, and want to do something about it. One way our community can help address the problem is to apply an innovative new person-to-person Internet based marketplace for lenders and borrowers called Prosper.com. Please follow this link to read more about Prosper and vote in our poll to express interest in participating.