Human Rights Watch just issued a detailed study on the Debt Buying Industry titled US: Courts Rubber Stamp Corporate Suits Against Poor.   They found the industry to be abusing court system.  Imagine that, go figure.  All kidding aside, the more publicity to this problem, the better, and Human Rights Watch deserves some credit for taking the time and effort to try to get a big picture look at the problem.

I haven’t had the time to digest this thing in detail, and I have my own work to do, but there is some interesting stuff in there.  Here’s a paragraph about Encore Capital.

Industry leader Encore Capital, a firm better known to millions of alleged debtors as Midland Funding, is one of a handful of large firms that dominates the market for purchased debt, which is also home to a proliferation of much smaller players.[5] Encore’s balance sheets are more transparent than many of its competitors’ because it is a publicly traded company, and they help illustrate the scale and reach of the debt buying industry. In 2013 and 2014 alone, Encore purchased more than 35 million charged-off consumer accounts with a total face value of nearly $100 billion, and in an average year it successfully collects more than $1 billion from US consumers.[6] The company, which has never actually loaned anyone a penny, claims that one in every five US consumers either owe it money or have owed it money in the past.[7] 

 
One in five consumers, holy cow! The last study I saw, Midland Funding is the biggest filer of collection suits in my state, Indiana.  The tragedy is that debts which the initial creditor decided there was no fiscal utility in trying to collect, are being passed down to bottom feeder debt collectors, and that is worse than keeping them on the books of the original creditor. Why?  with the original creditor, the debt stays on the consumer’s credit report for seven years after it goes delinquent, then it falls off the credit report completely. When the bottom feeder debt collector gets it, the bottom feeder often waits until the statute of limitations is about to expire (in Indiana, that’s 6 years) then files a law suit. The judgment on the lawsuit stays on the credit report for 10 years after it is obtained.  In other words, the debt that would have fallen off the report for 7 years haunts the consumer’s credit for 16 years. That’s not the end either. In Indiana, you can potentially collect a judgment for 20 years after you obtain it.   The latest thing I’ve seen is a new breed of collection agency that specializes in collecting old judgments. 

I’ll write more when I have the time. These people just piss me off so much I have to cool down.