Junk Debt Buyers Hope You Do Not Know How to Eliminate Credit Card Debt by Stopping Their Collection Efforts

January 25th, 2010 | Posted in Credit Card Debt

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

Junk debt buyers are companies that buy batches of thousands of discharged credit card accounts from the credit card banks for pennies on the dollar (under 10 to 15 cents per dollar of debt). Junk debt buyers also resell these accounts to each other for as little as less than one cent per dollar of debt. As an example of such purchases, Business Week reported Portfolio Recovery Associates, a large national junk debt buyer, acquired 1,030 portfolios over an 11 year period with a face value of $35.3 billion for $791.6 million, representing more than 16.7 million customer accounts. That averages out to less than three cents per dollar of credit card debt.

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.

Junk debt buyers are relying on most consumers’ ignorance of the federal Fair Debt Collection Practices Act (FDCPA) and similar state laws. When a collection agency for a junk debt buyer sends out thousands of dunning letters to discharged-account holders, most recipients do not reply in writing demanding validation of the debt. If only they did, because the junk debt buyer can produce little documentation from the original creditor to substantiate the debt and the consumer could eliminate credit card debt.

When contacted by telephone and bullied with a false lawsuit, many consumers out of honesty and ignorance of the FDCPA admit to the undocumented debt and make the debt collector’s task easier.

Junk debt buyers’ and their collection agents’ debt collection efforts, unlike the original credit-card-bank creditors, are covered by the FDCPA. With a properly crafted written response to eliminate credit card debt, like the ones that can be found in the Credit Card Debt Survival Guide, these debt owners and collectors must stop their collection activities including no negative marks on a consumer’s credit report.

If you want to eliminate credit card debt, whether you can afford to pay or not, read Credit Card Debt Survival Guide. Matt Highlander is a contributing writer. www.credit-card-debt-survival.com