How to Stop a Junk Debt Buyer Attempting to Collect Older Credit Card Debt from You

The good news is current consumer protection laws make it possible to put a stop to a junk debt buyer’s credit card debt collection efforts.

Junk debt buyers invest in discharged credit card debt for pennies on the dollar. They also sell and resell the debt they have purchased to other junk debt buyers for smaller and smaller sums of money. Business Week, as an example, reported Portfolio Recovery Associates, a large national junk debt buyer, paid $791.6 million over an 11 year period for $35.3 billion of debt in 16.7 million customer accounts. For each dollar of credit card debt that averages less than three cents.

Based on those fractions, according to the Credit Card Debt Survival Guide, junk debt buyers do not have to collect on a majority of those debts. If they collected on just less than half, they would be hugely profitable.

The federal Fair Debt Collection Practices Act (FDCPA) can protect a knowledgeable consumer from junk-debt-buyer collection efforts, but junk debt buyers rely on the fact most consumers are not that knowledgeable about the FDCPA. Collection agencies for junk debt buyers send out first notices and most consumers do not respond in writing asking for documentation of the debt, as they should. When they purchase this debt in huge computer tape batches, junk debt buyers receive little original documentation of each debt; documentation that the FDCPA requires the junk debt buyer to provide to the consumer if asked.

The junk debt buyer’s collection agents frequently call consumers before the first notice arrives and violate the FDCPA by threatening a phony lawsuit if payment arrangements are not made promptly. Unfortunately for them, some consumers honestly admit to the alleged, undocumented debt to these strangers and make the collection agency’s job easier.

The original-creditor credit-card banks collection calls are not covered by the FDCPA, but those of junk debt buyers and their collection agencies are covered. A well written letter, like the ones that can be found in the Credit Card Debt Survival Guide, invoking sections of the FDCPA will force the junk debt buyers to stop their collection efforts including the placement of negative marks on the consumer’s credit report.