Debt Buying Industry

Who are the biggest debt buyers and what are their abuses?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

Who are the biggest debt buyers and what are their abuses?
Stephen Dunne, Esq.

Stephen Dunne, Esq.

Philadelphia bankruptcy, credit report, and debt collection abuse attorney

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The debt buying industry preys upon low-income households, often in black and Latino neighborhoods and it’s profitable, really profitable.  The debt-buying industry is worth billions of dollars annually. In 2013 and 2014, one of the country’s largest debt-buying firms, Encore Capital, purchased accounts with a value of close to $100 billion.

The Big 3 Debt Buyers

The biggest firm is Encore Capital Group, based in San Diego; it is the parent of Midland Funding, the company that pursues payment. Encore last year surpassed $1 billion in revenues, a 39 percent increase over 2013, spurred by major acquisitions, among them Asset Acceptance for $200 million and the United Kingdom debt buyer Cabot Credit Management for $177 million.

Next largest is Portfolio Recovery Associates, based in Norfolk, Virginia. In 2014, PRA reported revenue of $881 million and acquired Aktiv Kapital, a Norway-based debt buyer.

Encore, PRA and Asta Funding are the three biggest publicly traded debt buyers. The top five together purchase more than 80 percent of all credit card debt sold in this country, according to the worldwide trade association Debt Buyers Association International, which represents more than 575 companies and is based in Sacramento, California.

The Bogus Lawsuits- Judgment without evidence

A 2010 report by the New Economy Project, cited in the HRW report, found that 95 percent of default judgments brought by debt buyers in New York City civil courts from January 2006 to July 2008 were against people from low- or moderate-income neighborhoods.

A 2015 report conducted by Annapolis lawyer Peter analyzed 4,400 debt-buyer cases in Maryland over a two-year period from 2009 to 2010, which he titled “Junk Justice.” It showed that more than 99 percent of judgments against defendants were obtained without trial, with fewer than 2 percent of defendants represented by a lawyer—and that those who had one fared much better.

Debt buyer lawsuits are plagued with abuses, including lawsuits filed with little or no documentation of the debt or its assignment to a buyer; mistaken identity in pursuing payment; suing for time-barred debts; and seeking high amounts in fees and interest for which there is no proof or accounting.

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