MCLEAN, Va. — DBA International, the association representing the nation’s debt buyers, has issued the following response to Consumers Union and East Bay Community Law Center’s report entitled “Past Due: Why Debt Collection Practices and the Debt Buying Industry Need Reform Now.”

“DBA International, the voice of the debt buying industry, disagrees with Consumers Union and East Bay Community Law Center’s call for further restrictions to the debt buying industry.

Over the past decade, selling bad debt has emerged as an important and effective way for financial institutions to recoup money from bad debts. The money from those sales is then invested back into the banking system in the form of loans and revolving credit for working class Americans.

Greater restrictions on selling debt would cause primary lenders to choke off credit and limit their lending to only the best qualified so they can avoid the bad debt risk. Those who will suffer are the very people these organizations are seeking to protect.

And while these organizations identify individual stories about people for whom the system did not work, they are the exception and not the rule. An overwhelming majority of Americans repay their debts on time, and most of those who are delinquent make arrangements to pay their lenders. The small remainder becomes the responsibility of the debt’s owner and their collectors. When errors occur, existing laws protect consumers and give them recourse. We don’t need to add more layers to an already complex system.

It is very easy to paint the little-known debt buying industry negatively. But the work that our members do on a daily basis is a vital part of the American credit economy. Limiting their practices could have tremendous unintended consequences.”

About DBA International
DBA International is the trade association and voice for the debt buying industry. DBA sets ethical and business conduct standards for the industry. Debt buyers are financial institutions that purchase uncollected accounts from originating lenders for less than the face value of the debt. Debt buyers are therefore able to settle debts with consumers at deep discounts. This allows a consumer to improve their credit record and, by doing so, to increase their access to, and reduce their cost of credit.

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