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| Beating Credit Card Debt Collectors at Their Own Game |
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| Written by Matthew Highlander |
| Sunday, 27 September 2009 08:42 |
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Consumer debt collectors! Credit Card debt collectors! There ought to be a law against them! Fortunately, there is a law, and educated consumers have learned how to use it to fend off these debt collectors by making their job difficult. Time is money for a credit card debt collector, who is in the business of collecting unsecured consumer debt, most of which happens to be credit card debt. These consumer debt collectors and collection attorneys work on a percentage of what is collected. Most people think there is a debt collector for every debt, when the reality is there is only a debt collector for every easy-to-collect credit card debt. The consumer debt collection industry's growth has mirrored the growth of the credit card industry. Consumer credit went from $133.7 billion of in 1970 to $2.5 trillion of debt in November 2007, according to the Federal Reserve and Business Week. According to a trade group for the debt collection industry, ACA International, each year debt collectors put more than $40 billion back into the U.S. economy. 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. According to the American Banking Associate, 4.75 percent of bank cards were delinquent in the first quarter of 2009. The point is, there are millions of delinquent credit card accounts to go around to ambitious debt collectors. The Federal Reserve requires credit card companies to hold reserves for bad debts. The credit card companies profit from these debts after they are written off by selling them to junk debt buyers for no more than one penny on a dime, or 10 percent of their value. With that discount, junk debt buyers and their collection agencies and collection attorneys can be quite profitable by only collecting on 30 or 40 percent of the purchased accounts. Debt collectors can make more money by pursuing delinquent credit card account holders who put up no resistance. Proper resistance to debt collection attempts usually causes debt collectors to look for less resistant targets. Effective resistance to credit card debt collectors relies on The Fair Debt Collection Practices Act (FDCPA). While credit card companies are original creditors not covered by the Fair Debt Collection Practices Act, collection agencies, collection attorneys and junk debt buyers are subject to that federal law. According to the FDCPA a debt collector (Attorneys collecting consumer debt are considered debts collectors by this law.) must notify the consumer in writing of their right to dispute the debt and have it validated. Validation means the collector must send copies of original documentation verifying the debt. The FDCPA also says the consumer can instruct the debt collector to cease collection attempts until they properly validate the debt. So, who should the consumer debt-collection commissioned professionals spend their time with, those who properly dispute and request validation or those who put up no resistance? About the Author: Matt Highlander writes for theCredit Card Debt Survival Guide, a guide for consumers looking for credit card debt relief. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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