How do you know the collector you’re paying really owns your debt?

You don’t.

Just in case you don’t have enough to worry about already, here’s just one more thing: debt collectors and the twisted games they play. Trust me, you’ll want to invest the few minutes it takes to read this article from The New York Times Magazine. Odds are good the plot twist will surprise you, maybe even leave you a bit more sleepless than you already are. And for good reason.

Sure, those of us who have mastered the art of living within our means *ahemcoughsplutter* will never know the joys of being contacted by debt collectors. More power to you. May you never have an unplanned misfortune that changes that state of affairs. For the rest of us, debt collectors are a reality. An ugly one.

Sure, when we got that credit card when we were raking in the dough compared to the time before, we thought we could handle it. Things happen. Times change. When we were forced to move across country for family reasons, taking on a new world of immediate expenses, we fully intended to sort out that last gas bill back there. When we got screwed by an unscrupulous service provider of one kind or another, we figured we’d get around to paying them, but get at the end of the line, buddy. We’ve got more pressing affairs at the moment. Like rent. Food. Gas. Car insurance. That creditor will just have to wait.

Time has a nasty habit of flying when one is in debt. Thirty days late becomes ninety. Ninety becomes a few years. Anyone who has that kind of bad debt knows that it comes with a tragic tale of human frailty and poor fortunes. As we learn when the collector starts calling, the collector has heard them all. 90 years old, on a fixed income, can barely afford to eat? Tough, you old bitch. We’ve got a business to run, and facts is facts, after all. We’ve got it right here on the screen that you owe, and you need to pay us. Don’t you have a nephew you can guilt trip?

Hard-nosed shamelessness is just part of the business.

I get it, though. Were I a debt collector, I’m sure I’d quickly become numb to the litany of sob stories. They must sound like they all come from the same damned playbook, after all. And why shouldn’t they? Debt is the American story now. That story is my story. Your story. Your family’s story. Your neighbor’s story. Your friend’s story. Your co-worker’s story. Your boss’s story. Your customer’s story.

But years ago, I learned that credit collection companies, at that time, tended to pay no more than about 2.5% of the face value of the debts they own. They buy it in portfolios at ridiculously steep discounts because hey, everyone in that portfolio is already a known deadbeat. Then they proceed to comb through that stack of paper to make big bucks. The debts they can’t collect they just repackage and sell on down the road. On the one hand, I get that the original creditor can’t just offer the debtor the same sweet deal. “Can’t pay? No problem! How about we just settle for 2.5% of what you owe?” Nobody would pay another bill ever again, at least not at full price. Even so, that these vultures swoop in and scoop up the fruits of our rotten luck and earn hundreds, even thousands of percent return on our misery is more than a touch grating. Whatcha gonna do, though? They’ve got you fair and square. You racked up the debt. You know it. You took the risk. It’s time to pay the piper, at least eventually.

But what if the piper changes now and again? And again? And again? What if Piper A sells your deadbeat debt to Piper B and Piper B, savvy, sleazy sort that he is, decides to sell it not only to Piper C, but to Pipers D, E, and F as well? Who’s to know? Who’s watching? You didn’t pay him, so you’re not going to pay them, either, and D, E, and F are just as likely to sell your debt to LMNOP, X, Y, and Z just for shits and giggles.

So your big day comes. You’ve got money left over. Finally. You can afford to do the responsible thing and finally take care of that debt. You don’t dread opening the mail. You relish the opportunity. Will today be the day I get a notice that I can actually start squaring away at $50 a month until it’s done? Bingo! There’s a bill! Freedom, here I come!

Not so fast. Just because you paid, doesn’t mean you paid the right party. And guess who, thanks to the crazy way our laws deal with this corruptionfest, stays on the hook?

So. When that notice shows up in the mail, how exactly do you determine whether or not they are the rightful and sole holder of your debt?

You don’t.

—-

Image credit: Quazie @ flickr.com. Licensed under Creative Commons.

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