Posted on September 22, 2009 at 3:44 am I heard that debt buying has now become a multi million dollar industry. Business is business right? But why does it sound fishy? How does this debt buying business work anyway?

Posted on September 22, 2009 at 3:50 am I don't know if it's now a multi million dollar industry but some of the debt buying companies have made it to the Fortune 500 list.How does it work?1) The original creditor assign bad debts to collection agencies. If the collection agency is able to collect it gets to keep between 10-20% of that collection, the remaining amounts gets sent back to the original creditor. 2.) Debt buyers are a different story. They purchase large portfolios of old debts for pennies on the dollar. The potential for making tons of money is huge because they don't have to turn a profit on a single account and portfolios may contain up to a thousand accounts.

Posted on September 22, 2009 at 3:52 am Debt buying - how much do these collection agencies pay for the debt?How much they buy accounts for depends on how long the accounts have been past due (the longer it's been delinquent, the less the portfolio costs). 

Posted on September 22, 2009 at 3:56 am Debt buying - why does it sound fishy?Well that's because some collection agencies practice fishy (under handed, unfair, doubtful, deceptive) collection tactics. And many are victimized.

Posted on September 22, 2009 at 4:00 am Debt buying - its effect on debt collection: What are the deceptive practices that collection agencies do ?

Posted on September 22, 2009 at 4:34 am - even when the SoL on collection on a state is up, some collection agencies still try to collect from the consumer. the consumer not knowing this would admit to the debt and so restart the clock on that debt.the collection agency wins.

Posted on September 22, 2009 at 4:37 am Buying the consumers debt for a very low price does result into greedy collection tactics - so the consumer is advised to read up on his/her rights.Here: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm

Posted on September 24, 2009 at 2:20 am But is debt buying even legal? Sorry for the pun, but I don't exactly buy that...