Inside the Sloppy, Shadowy World of Debt Collectors


In yet another story that ought to be an April Fools joke but isn’t, David Dayen reports on the sordid, shadowy world of debt collectors:

Last month, Amrit Singh, an adjunct professor at Hostos Community College in the South Bronx, received a letter from the New York City Marshal, advising him that he owed $10,000, due within 20 days….Singh called the Marshal’s office, and they told him Atlantic Credit, a debt collection agency, secured a judgment against him for the $10,000….He was also told that the original debt came from HSBC Bank, for accumulated fees and interest on an account dating back to 2008. “This was more suspicious, because I had never opened an account with HSBC, neither me nor my wife,” Singh said. His credit report showed no record of him owing money to the bank, or any other credit incident matching this level of debt.

A colleague of Singh’s, hearing the story, had a theory. “He said, they probably told an intern, ‘Amrit Singh owes this money, go look up a name.’ And the intern found me.”

….“Creditors provide debt buyers with almost no data, no original contract, no backup information,” said Ira Rheingold, executive director of the National Association of Consumer Attorneys….Debt collectors pay miniscule amounts—between four and seven cents on the dollar—for the vague information they get, so they have little incentive to ask for a more legitimate product that might cost more. They simply turn around and try to collect, making guesses based on the names and account numbers given. “We see everything. They go after people with similar names, the same name, fathers and sons getting called on each other’s debts,” said Carolyn Coffey, a Supervising Attorney at MFY Legal Services, a non-profit law firm in New York City. “They figure they bought this for so cheap, as long as they get a few positive hits, they’re going to make money.”

In Singh’s case, he was easily able to get the judgment tossed out. That’s what usually happens if someone actually shows up in court to contest the debt. But that doesn’t mean his misery is over. In many case, the debt collector just shrugs and sells the data to another debt collector and the whole nightmare starts all over. As for clearing up the black mark on his credit record—well, you can probably guess how likely a debt collector is to help with that process after fingering the wrong person.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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