Most of those people who cannot afford to pay their monthly minimum credit card payment become potential victims of the consumer debt collection industry. However, a growing number of consumers have found a law to protect themselves against credit card debt collectors.
Depending on how he or she spends it, time is the debt collector's friend or enemy. Ideally debt collectors would like to spend their time with consumers who are easy to collect from. Everyone knows an overdue credit card debt will bring a call or letter for a debt collector. What they do not know is with a proper consumer response to that communication, the debt collector will move onto a more likely target.
The consumer debt collection industry's growth has mirrored the growth of the credit card industry.
According to the Federal Reserve and Business Week, the consumer credit industry increased from $133.7 billion of consumer debt obligations in 1970 to $2.5 trillion of consumer debt obligations in November 2007.
Each year debt collectors put more than $40 billion back into the U.S. economy, according to ACA International, a trade group for the debt collection industry.
According to data from the U.S. Census Bureau, there were 159 million credit cardholders in the United States in 2000, 173 million in 2006.
4.75 percent of bank cards were delinquent in the first quarter of 2009, according to the American Banking Associate.
These statistics indicate debt collectors are awash in millions of delinquent credit card accounts.
Credit card companies must comply with Federal Reserve regulations by keeping reserves to for bad debts. Bad debt is part of their business. After these debts are written off, junk debt buyers bid on blocks of delinquent credit card accounts. If successful, they pay no more than 10 cents for each dollar of debt. With that discount rate junk debt buyers and the collection agencies and collection attorneys who work for them only need to collect 30 or 40 percent of the debts to make money.
If a consumer resists collection attempts (after they learn how to properly do so), it is simply not profitable for collectors to put more time into chasing them for their debt, when they can put that time in getting the easy returns from other people who put up no resistance. The Fair Debt Collection Practices Act (FDCPA) is the key to resistance.
The Fair Debt Collection Practices Act covers the behavior of collection agencies, junk debt buyers, and collection attorneys. The FDCPA treats attorneys as debts collectors, if they are collecting consumer debt. The consumer must be notified in writing by the debt collector of their right to dispute the debt and have it validated, according to the FDCPA. Copies of original documentation that verifies a debt are considered proper validation by the FDCPA. The FDCPA gives the consumer the right to tell the debt collector to stop collection activity until they have validated the debt.
Should the debt collector invest their time with those who put up no resistance or with those who properly dispute a debt and request validation for it?
Depending on how he or she spends it, time is the debt collector's friend or enemy. Ideally debt collectors would like to spend their time with consumers who are easy to collect from. Everyone knows an overdue credit card debt will bring a call or letter for a debt collector. What they do not know is with a proper consumer response to that communication, the debt collector will move onto a more likely target.
The consumer debt collection industry's growth has mirrored the growth of the credit card industry.
According to the Federal Reserve and Business Week, the consumer credit industry increased from $133.7 billion of consumer debt obligations in 1970 to $2.5 trillion of consumer debt obligations in November 2007.
Each year debt collectors put more than $40 billion back into the U.S. economy, according to ACA International, a trade group for the debt collection industry.
According to data from the U.S. Census Bureau, there were 159 million credit cardholders in the United States in 2000, 173 million in 2006.
4.75 percent of bank cards were delinquent in the first quarter of 2009, according to the American Banking Associate.
These statistics indicate debt collectors are awash in millions of delinquent credit card accounts.
Credit card companies must comply with Federal Reserve regulations by keeping reserves to for bad debts. Bad debt is part of their business. After these debts are written off, junk debt buyers bid on blocks of delinquent credit card accounts. If successful, they pay no more than 10 cents for each dollar of debt. With that discount rate junk debt buyers and the collection agencies and collection attorneys who work for them only need to collect 30 or 40 percent of the debts to make money.
If a consumer resists collection attempts (after they learn how to properly do so), it is simply not profitable for collectors to put more time into chasing them for their debt, when they can put that time in getting the easy returns from other people who put up no resistance. The Fair Debt Collection Practices Act (FDCPA) is the key to resistance.
The Fair Debt Collection Practices Act covers the behavior of collection agencies, junk debt buyers, and collection attorneys. The FDCPA treats attorneys as debts collectors, if they are collecting consumer debt. The consumer must be notified in writing by the debt collector of their right to dispute the debt and have it validated, according to the FDCPA. Copies of original documentation that verifies a debt are considered proper validation by the FDCPA. The FDCPA gives the consumer the right to tell the debt collector to stop collection activity until they have validated the debt.
Should the debt collector invest their time with those who put up no resistance or with those who properly dispute a debt and request validation for it?
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