Are we ready to recognize junk debt buyers, bottom-feeders and scavenger debt collectors on the same level as banks?

Read Bud Hibbs' "preditorial" on why these money sharks ought to be bailed overboard and fed to real sharks.

http://www.budhibbs.com/praeditorial.html

Ray

The debt buying thing works both ways though. Sure, they buy a debt for a tiny percentage but the recovery ratio must also be small or some other collection agency would have paid more to the original creditor for it. The creditor fully knows this when they sell the debt, but they do so largely for tax writeoff purposes; nonetheless, it's a free decision on their part.

Just because we only discuss the legal realm on this forum doesn't mean that the moral one is less important, because it isn't. If a debt isn't discharged by a legitmiately declared bankruptcy, then there exists an outstanding obligation to make some reasonable effort to settle the debt in the future, providing one is able to meet their other needs and obligations.

The fact the debt was bought by a opportunist scavenger outfit like ARO or AK can potentially be a mixed blessing in the moral realm. Especially, if the debt is old, stats barred and/or off your credit reports, it might be possible to settle it for 5% or 10%. Yes, yes, I know it's already been effectively settled for 0% because it's stats barred, but that is irrelevant, morally speaking. I realize many people will say, like blogger "Femme32," Screw the bastards." And, ultimately, if we're not answerable for wrongs done then so be it. If we are, then it's a different story.

As for the original creditor getting shafted, don't worry; the criminal interest rates built into credit cards and loans are more than enough to compensate for the default rates and still give bank ceo's 7 figure Christmas bonuses and severance packages - and in some cases, 8 figures. Oops, I forgot......in several case, 9 figures

And don't feel sorry for smaller creditors either.

To see what crazy (and creative) lengths, even small loan outfits will go to recover their money, read columnist Michele Mandel's story in today's Toronto Sun. It details the insane efforts collectors made to recover a 5 year old Pontiac from 2 ne'er-do-wells that financed it at 29.9% before going belly up.

http://www.torontosun.com/news/columnists/michele_mandel/2008/11/30/7580866-sun.html

After reading this story, dare tell me that you feel sorry for any creditors, big or small.

Ray

I heard wal-mart was the same way, forget the drain plug and the lug nuts on the tires.

I don't like the way the the guys at Canadian Tire forget to tighten the wheel nuts on my tires or my oil pan drain plug or come to think of it, just about any other part they put on. Their technicians get 33 bucks a hour flat rate or $26 hourly rate. Might as well go to the dealer.

Ray

I agree, the companies that buy debts are bloodsuckers.I had a canadian tire debt that was sold to contact resources services.I didn't like the idea canadian tire did that.I avoid buying from canadian tire as much as possible.

I agree one is morally obliged to try and pay at some point if they can. But i really can't see paying some scum debt buyer. If the original creditor was to gain from a person paying that would be one thing but the original creditor only gets the few dollars they sold it for. Its not right that a debt buyer could pay some small amount to gain rights to a few thousand dollar debt. Isn't it very close to a loan shark system. Then on top of everything they want to add interest to the amount.

Hmmm. Not much point in posting what the legal departments of the credit bureaus say, if no one is going to read it and/or phone them for verification - on the odd chance they might be right.

Irrespective of legalities and credit reporting policies, obviously one is morally obliged to try and settle at some point in their life when and if they are able, even if the debt has been purchased by some scoundrel/scavenger debt buyer.

Ray

I guess so, good luck.

I don't have my last payment receipt. I will contact the Exuifax, TransUnion and Financial Consumer Agency of Canada (FCAC) in the next few days to find out what they have to say about this.

I agree with you on that if it stays on my credit report another 6 years from when I Pay off the account it worth waiting it out till Feb. 2010 and doing it then. But if it will fall of the report on Feb. 2010 regardless of when I make then payment then I will pay it off as soon as I have the money saved.

I'll call FCAC first then I'll contact the credit reporting agencies. There is the contact info for FCAC for anyone who may be interested:

***********************************************************************************
FCAC makes sure that federal financial
institutions such as banks, trust, loan and
insurance companies respect the laws and
agreements that protect you. Call us for more
information about your rights.

Contact info:

Telephone: Monday to Friday, 8:30 a.m. to 6:00 p.m., Eastern Time

Toll-free: 1-866-461-3222 (FCAC)
Fax: 1-866-814-2224
E-mail: info@fcac.gc.ca
Web site: www.fcac.gc.ca
***********************************************************************************

They cannot legally change your date of last activity.It is very important for you to save your last payment receipt.