Debt collection article - phantom debts

A guy goes on a crusade against a debt collector and eventually gets to the bottom of a very shady industry.

Americans are currently late on more than $600 billion in bills, according to Federal Reserve research, and almost one person in 10 has a debt in collectors’ hands. The agencies recoup what they can and sell the rest down-market, so that iffier and iffier debt is bought by shadier and shadier individuals. Deception is common. Scammers often sell the same portfolios of debt, called “paper,” to several collection agencies at once, so a legitimate IOU gains illegitimate clones. Some inflate balances, a practice known as “overbiffing.” Others create “redo” lists—people who’ve settled their debt, but will be harassed again anyway. These rosters are actually more valuable, because the targets have proved willing to part with money over the phone. And then there are those who invent debts out of whole cloth.


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I read this the other day, the entire time I was thinking of CN47.


The Minnesota Department of Revenue has sent me 3 separate letters threatening to place liens and levies on my accounts - the first was while the debt was within the dispute period. The second two were in quick succession with notice dates after the settlement agreements were signed and the check was cashed. So it’s not only scam-like companies involved in these types of tactics.

got a call from “IRS” today, threatening to put me in jail… lol

Please give them a call to “Officier Johnson” , 870 210 3850

i was getting calls from a normal sounding person who works for a document delivery service in albany, ny. after the 3rd call in a month i politely told her she is a front for a ‘civil law suit scam’. she was resistant at first but i think i convinced her that a scammer had hired her company to make these calls and she was an unwitting participant in their scam. had to explain how civil process service actually works and at any rate, the calls stopped and i sometimes wonder what happened.


I’ve been thinking of buying defaulted debt but straight from banks. I have a program that I can see when a bank charges off debt (consumer loans, auto, residential etc) quarterly. They need to report this to the FDIC. You can do it for free right from the FDIC website but it’s complicated. This program gives you graphs etc.

Was wondering about the profitability of all of this?

Very profitable if your name is Whitey Bulger!

Whitey Bulger (along with his side kick Mr. Flemmi) skipped the part of buying the debt and just collected. And now for a serious answer…

What strikes me is the likelihood of significant regulatory and legal compliance work/fees - so make sure you’re budgeting for that and the risk of judgments for violating the laws.

Unless it’s a small bank and you have a relationship with them, what makes you think they’ll sell the debt to you? If you’re paying more and probably collecting less than an established collector, how will you compete?

Thanks, I’m somewhat familiar with the laws and actually a case just came out last year that helps if you own the debt

As for why would a bank sell to me, you’re right. I have to make a ton of calls. But like I said I have a program that shows me all defaulted debt for all 12,000 banks in the country. Also I have contact info etc.

Besides smaller banks are good as I don’t want to/can’t compete with the big boys. I’m currently not working and have a no mortgage (paid off) and can’t work for anyone. (I sold my business, so I thought this might be something good to get into as I didn’t sell my business for enough to retire but enough that with the minimal bills I have I have plenty of time to find something.

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