I just got my first copy of Collections and Credit Risk magazine--a trade rag for the collection industry. It can't hurt to know what's on their minds... So, you ask, what is on their minds? Well, money, in a word. Some of the tidbits, in a nutshell... A couple of debt buyers are boasting how they bought $1,020,000,000 worth of junk debt (er, I mean packages of consumer receivables) for the tidy sum of $35,900,000 or 3.5 cents on the dollar. In their 4th qtr, they picked up $644,800,000 worth of receivables for only $38,600,000 so it looks like junk debt is getting cheaper. Which was the topic of another article. As more and more people are going into foreclosure and other dire straits, credit cards and collection agents are going further down the list of people to pay. Consequently junk debt is getting cheaper because fewer and fewer people are being forthcoming with the cash when the collector calls. Interestingly enough (to me, anyway) was how they also listed a table of companies that had been hit wit a fine or law suit award. Some of these names might look familiar... Equifax paid $2.9 million to someone in Florida. Arrow Financial Services has to pay $100,000 to a consumer in CA. Drive Financial Services settled a class-action suit for $250,000 in TX. The state of Florida has files a $1.2 million dollar suit against Bass Prelitigation Services. So, don't let them tell you there's no money in suing a misbehaving collector.
Glad to see Equifax hit with such a verdict although I doubt it withstands procedural due process muster on appeal (I'm assuming this award was at least partially punitive). If it does stand, that may be the biggest since Cushman v. Trans Union. Even still, you see that most of these awards are mere pittance in terms of even quarterly revenue for these entities. Unfortunately, a $100k verdict will not serve as much of an impediment to such bottom feeders as Arrow. However, 100k isn't at all bad in an individaul action. The facts must have been very good.
