Heather Allen: Overview of the FTC’s Debt Buyer Study

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Bullet points from Heather Allen’s overview of the FTC’s Debt Buying Study.

  • It’s smaller debt buyers (and re-sellers — i.e., debt buyer to debt buyer), not the larger ones, that are primarily responsible for some of the compliance issues.
  • What factors influenced the price: age, type: substantially more for mortgage; less for medical and utility debt.
  • Sellers draft sales agreement.
  • Debts generally sold “as-is.”
  • Missing or inaccurate data did not provide for a refund from seller.
  • Buyers typically had all the info the FDCPA currently requires. (Emphasis on currently.)
  • Buyers typically receive additional info: name of original creditor, amount of original debt, etc.
  • Did not get dispute or verification history, though.
  • Buyers obtain very few docs about debt at sale.
  • Info that debt buyers conveyed when reselling very similar to what they received. Not removing data; however, they’re not adding to that data.
  • How often do debt buyers verify consumer disputes? They verified about half of all disputed debts.
  • More likely to verify debts from original creditor rather than from other debt buyers. (All self-reported.)
  • Age of debt increases more when it’s debt-buyer-to-debt-buyer.
  • Why do debt buyers not insist on more documents? (Heather asked rhetorically)

Continuing the Discussion

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  • avatar Ameripay says:

    Debt buyers do not ask for more documents because as is pointed out repeatedly in the FTC’s own report on the debt purchasing industry this is a VERY competitive industry. As debt buyers we are beholden to the banks that are willing to sell us paper or approve us for their downstream lists as an approved buyer.

    It will be up to the CFPB to issue a rule directing banks and other originators to provide more documentation at the time of sale. Otherwise the originator will always take the most competitive bid – which will give them the highest amount of revenue for the lowest amount of work internally.

  • avatar john pratt says:

    When bank mergers have occurred the documents from the bank that was purchased is lost for some reason. The purchasing bank that sells the debt may say that docs are available, and we can only take their word. By and large this claim is fiction.
    Even when it has been available we see copied affidavits and even at times credit card templates that are just populated with information from the spreadsheet so that it looks like a statement.
    Much of this was no problem until folks began to file more lawsuits. The increase of lawsuits against consumers has not led to more collections compared to the damage which has resulted in courts and consumer watchdogs and the government turning against our industry.

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