Debt Buyers May See Competition from Occupy Wall Street

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Organizers of the Occupy Wall Street movement this week announced that they are targeting consumer debt using an interesting tactic: they’re going to become debt buyers. But instead of collecting on the accounts, the buyers will simply forgive the debt, leaving consumers a zero balance.

Occupy Wall Street (OWS) formally announced the launch of The Rolling Jubilee, a program intended to raise money to purchase consumer debt and then forgive that debt. The program is currently in fundraising stages, but the group said that it has already trialed the practice.

According to OWS, organizers recently purchased $14,000 in face value consumer debt for $500, forgiving the balances on all accounts. The group intends to directly compete with debt buyers and brokers, as noted on one of its organizational web sites:

If you’re a debt broker, once you own someone’s debt you can do whatever you want with it — traditionally, you hound debtors to their grave trying to collect. We’re playing a different game. A MORE AWESOME GAME.

The group said that it did plenty of research before making its first move, consulting with attorneys, the IRS, and “moles” within the debt buying industry. The type of debt targeted is not known, but the organizers mention student loans and medical debt quite a bit on their site.

The Rolling Jubilee also created a video to explain the program:

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Posted in Debt Buying, Featured Post .

Continuing the Discussion

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  • avatar Jeffery Hartman says:

    Interesting.

  • avatar buffalo-bills says:

    That’s…hilarious.

  • avatar BayviewRMC.com says:

    Hummm…. I like to see how this program evolves over time. It seems like it is only going to reward consumer that live beyond their means. I can’t see how this is going to solve a anything. Isn’t this just another form of a bail out?

  • avatar JASON CASH says:

    40 years in the business…. this is the dumbest thing i’ve ever heard.

  • avatar Collection Veteran Since 1964 says:

    Hmmmmm. Hope they remember to send the 1099C form to the IRS.

  • avatar wisecash says:

    $500 is about all that those Occupy ‘people’ have between them. I’m sure Resurgent, PRAA, and Cavalry, etc are all shaking in their collective boots!

  • avatar jmapes says:

    That’s too funny… I don’t see debt buyers quaking in their boots over this and, if they could really raise a bunch of capital, really all they’d do is increase demand and shorten supply temporarily. The winner would be the lenders with higher purchase prices. So they’re rewarding the people they’re trying to punish… Ouch, take that big banks!!! I think the banks will turn jubilee masochist rather quickly.

    Now if I could make someone mad and have them drop their wallet on me… That’s a heck of a business.

  • avatar Jeffery Hartman says:

    Form 1009-C, Cancellation of Debt is this good news, for the debtor ? A debt you owed has been cancelled or forgiven and you don’t have to worry about repaying it. Don’t forget the Internal Revenue Service (IRS)! Wonder if the IRS will forgive the debtors or tax them?

  • avatar Ryan Watson says:

    Someone sell them some OOS payday loans for 5%…

  • avatar jessie-gomez says:

    When I buy a debt it would be a cold day in hell if I ever forgive the debt.

  • avatar Debt Guy says:

    Actually, I really like Ryan’s idea a lot. I have some OOS debt that hasn’t been worked in a long time and that I’ve mostly written off. I’d be happy to sell it to them for a ridiculously inflated price!

  • avatar Nancy Hirschbach says:

    What organization would sell a single account? How did the organization qualify to purchase? Does the organization maintain proper insurance in the purchasing arm name, what do they do with the data and how do they handle it? Are they going to 1099 the Debtor and how will that affect the debtor?

    I get what they are trying to do, but collection agencies, debt buyers, credit unions and banks are already working with buyers, aren’t they for hardship situations.

    I am a true believer in helping ones in need, but there is also something called accountability.

  • avatar todd-bean says:

    They better not be buying up one of mine and then forgiving it. They take away my second income of suing junk debt buyers and I’ll be one unhappy consumer.

  • avatar David Russell says:

    It seems that some in the industry already reward those living beyond their means, as Bayview RMC said above. For example: http://www.insidearm.com/daily/debt-collection-news/debt-collection/monarch-cares-kicks-off-toys-for-tots/. I mean can’t those kids just make do with last year’s Christmas toys?

    Seriously something like this could be a more effective boost for someone under water financially than a food bank or Goodwill clothing/furniture. Possibly even encourage the recipient to pay back other debts owed.

  • avatar DONALD DALY says:

    So, they buy the debt, let the debtor off the hook and then file 1099c and claim the loss against whatever it is they do to create income in another entity that is corporately related to this entity. Beats working for a living. The government then becomes their source of income. Slick willie is at it again, and apparantly the IRS is having another one of their DUH moments. I’ll also bet there is a congressperson involved.

  • avatar Jeff Dickey says:

    Proof positive that stupidity gets magnified exponetially as people gather in large groups. All in all a great idea though. As the secondary market for debt purchasing evaporates before our eyes, suddenly a entirely new channel develops…a channel to unload the non performing junk on these idiots. I hope they raise a pile of cash. I know a lot of folks that would be happy to take their money!

  • avatar harrison-gevirtz says:

    I’d be delighted to hook them up on a few portfolios *laughs*

  • avatar jessie-gomez says:

    Nancy Hirschbach, who told you that you need insurance to buy debt.

  • avatar Ameripay says:

    More buyers in the marketplace is a good thing. I can’t wait to hear the first collector tell me “all my debtors are waiting for occupy to buy their accounts and forgive them, I can’t hit a quota in this place.” LOL.

  • avatar Jerry Ashton says:

    Business Insider calls this campaign by Occupy as “Brilliant.”

    Could this be the best thing to happen to the American Republic since FDR – Occupy, Strike Debt and Rolling Jubilee?

    http://www.businessinsider.com/why-occupys-plan-to-cancel-consumer-debts-is-brilliant-2012-11

  • avatar Jerry Ashton says:

    Only 20 responses on an event that may likely shift the collection industry landscape? The more you know, the more interesting this becomes…

    The People’s Bailout: Occupy Wall Street To Erase $1 Million In Debt—Maybe Even Yours
    http://bit.ly/QGjp7t

    J

  • avatar Jerry Ashton says:

    In the interest of continuing education….or, as my critics will say…continuing self promotion, here is a piece published by the Huffington Post that was refused publication here in insideARM.

    When you finish reading through it, I would like your opinions as to why. Throw orchids or onions, just throw something.

  • avatar aramiska anonymous says:

    Hello ladies! we who Occupy Debt can sense your confusion, with this concept so i am tasked with clarifying. Do not be afraid. We are not in competition only cooperation.
    We start with the premise that usury is a sin or at least immoral or just plain bad. Read this now and digest : http://en.m.wikipedia.org/wiki/Usury
    If you want to learn more please respond, if not you are free to remain blissfully ignorant. Strikedebt!

  • avatar tax-agent says:

    Strike Debt will earn no income from the lending of money and is therefore exempt from filing a Form 1099-C under the Internal Revenue Code Section 6050P.

  • avatar itsadebtdummy says:

    Stike Debt must send the 1099-C to the debtor – forgiving the debt and interest.

    So the forgiven debt, which the debtor has no intention of paying, will now be taxed and turned over to the IRS. I wonder how much tax debt the IRS will try to collect.

    What a joke!

    What’s in it for Strike Debt? Well, they get to write off the entire debt (not the pennies on a dollar, but the original debt) as an expense.

    Strike Debt wins. Debt deadbeat loses. Laughing all the way to the bank…

  • avatar itsadebtdummy says:

    Correction – Strike Debt can only write off the debt purchase price.

    I wonder who is sending out the “Hello” letters saying they own the debt when they buy the debt…

    Hmmm, RESPA anyone?

    Beyond those violations,

    Let’s see, Strike Debt forgives the debt.
    o Strike Debt is fined for not sending out the 1099.
    o Debtor is fined for tax evasion if they don’t declare the income for the forgiveness of debt.

    This is nothing but a win for the government. Keep our economy rolling along.

  • avatar Linda Almonte says:

    So I would like to ask if you think it is ethical to on one side be promoting this idea on one side (which I see very little success as an outcome) and at the same time have a side business going with some folks in Florida and Louisiana COLLECTING on medical debt? And if the debt were to be forgiven (I see the same 1099 issues) who has the access to e-oscar to take it off the credit bureaus? I think there are more questions here than answers. So you say medical debt is it in stat out of stat or 1000 other questions, I keep seeing the word transparency but only promises with no defined plan or process. Although the idea may have been generated with good intentions I don’t see it well thought out. I saw some videos and pictures from the jamboree the other night in NY for this I wasn’t there myself. But the photos I did see (I will provide to anyone you just can’t make this stuff up) A Merlin impersonator, Miss Moneybags (a woman covered in kids play money) and clowns. I will never again use the phrase “I have seen it all” in this business.

  • avatar Jerry Ashton says:

    $368,428 raised to date – enough to clear over $7,300,000 worth of debt. Flawed or not (and, it is much better thought out than its detractors would believe), it shows the power of an idea – one that this industry needs to respect. When it comes to change, you are either ahead of the wave, or under it.

    Those wanting to read my original blog about this on the HuffPost, “Strange Bedfellows: Occupy Wall Street and the Bill Collector,” please go here:

    http://www.huffingtonpost.com/jerry-ashton/strange-bedfellows-occupy_1_b_2122400.html

  • avatar Jerry Ashton says:

    Oh, and for those of you who missed the show, Bill Moyers provides a series of slides showing off some of the talent that evening. (http://billmoyers.com/2012/11/19/the-people-bail-out-the-people/).

    The People’s Bailout featured over a dozen performers and speakers — folk singers, rappers, magicians, comedians, Catholic nuns, a professor, a journalist — all of whom appeared for free to help Strike Debt raise money and share the message that debtors are not alone. “Debt is a tie that binds the 99%,” was one frequently-repeated phrase. A large sign on the wall read “you are not a loan.”

    The show closed with three songs performed by an unlikely pair: Guy Picciotto of Fugazi and Jeff Mangum of Neutral Milk Hotel. Mangum has only started performing again recently after a decade of reclusion.

    The crowd celebrated when Strike Debt announced that they had raised enough money to cancel over $5 million of debt. (John Light)

    The name “The Rolling Jubilee” was based in the ancient idea of a “jubilee year.” “The jubilee … comes out of the Abrahamic religious traditions,” humorist David Rees, one of the masters of ceremonies, said.

    “The idea of abolishing debt — freeing slaves literally and metaphorically — is a very powerful, very human impulse that we want to update for our new century.”

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