I am coming up to speed very very quickly thanks to various boards. But I have just tried something that really really works. About once every 3 years I buy a buisness rework and sell it. Account Recievables are always an issue but I never really dealt with CAs on how to collect and what they do and cannot do. So I went into the BIG CA here in Town that has a very good rep. Got their package ie info selling their services. Just from that alone one can learn ALOT. Ok now I then made and apointment with the head of compliance ie the lawyer. Talked to them and what accounts I could or could not collect on. Got your interest...............now I said what happens if in the accounts (receivables) I have ie from buying the BIZ that some are clearly in dispute? Should I mark these when I send them to you??? Oh no no no they replied do not tell us they are disputed accounts let us try to collect them first!!! We do not want to hear that!!!!! If we know we have to treat them completely different. Man they sound like the three little Monkeys!!!!! They also told me WHAT they can collect and what waiting periods they have ect ect ect Man OOOOOOOOOH Man were my eyes opened. SKI
That is how I thought the game was being played. When it pays to cheat, people will cheat. It's not disputed if you only pretend you never received a dispute. "You think you sent a dispute? No, unless you send me "X", I will not consider it disputed." "You think you sent your dispute timely? No, I sent you a letter a year ago, to some other address. It's not my fault you didn't deal with this then. It's too late to dispute and I can continue to assume the debt is valid." "You paid the debt 10 years ago? Unless you can prove that, you still owe it." "This isn't your debt? Unless you send me a police report, I consider it your debt. Oh, I don't have to tell you anything about this debt to file that report." etc...
From a business management perspective this manner of operations has some problems, entirely separate from the ethical ones: It works (i.e. pays) as long as the CA flies below the radar. In other words, it depends on convincing the target that the debt is owed, or at least is not disputable, and must be paid, without them realizing they have been had. As such, it is a "game of confidence". The cost of the occasional litigating consumer can be offset by the possible increased collection on old, cheap, out of statute debt of dubious legitimacy. The cost barrier to most consumers hiring an attorney to contest even small debts works to the advantage of the JDB. Since this strategy does, at least in the short run, "work" or pay off, the business grows by doing more of the same. We now live, however, in an Internet connected world, where even the least-sophisticated consumer can punch a company's name into Google and find a list of reports from people dealing with the same company, in full un-edited detail. Class action attorneys, and regulators, can do the same. The common thread of the pattern of illegal activity is visible to all. Although employing collection methods that produce FDCPA violations may produce an increase in revenue, if the business is grown by increasing dependence on such techniques, after a period of time the number of complaints will accumulate to the level of attracting regulatory attention. By this time, the operation is so dependent on the "easy money" of cheaply purchased debt collected by illegal methods that they don't appear to be able to stop even when facing severe penalties. (Kind of the same problem people in some other "activities" have.) Witness, for example, CAMCO, continuing to blatantly violate even after paying heavy fines and being under consent agreements. The business model may lead to a catastrophic implosion, with the principles so focused on the cash coming in that they forget to skip town before the chickens come home to roost. In effect the accumulating record of violations is a growing business liability not even showing on the balance sheets, just like Enron. Once those violations are forced to be recognized for the liabilities they are, such as by regulatory action, the company becomes instantly insolvent, without even the assets to pay the calculated consumer redress. This undermines the JDB argument that they are somehow performing a useful public service by collecting old debt, thus recovering part of the costs to the original creditor of the bad debt. The creditor recovers most of his costs by charges across the full base of customers, and risk management in choosing who to extend credit to, not by significant revenue from bad debt sale. In terms of cost/benefit to society, the pennies to the original creditor are insignificant compared to the unpaid damages to consumers for debts collected from the wrong party or when not owed, or the damage caused by harassment. This becomes clear when such companies have been shut down for failure to to comply with consent agreements, and are found to have assets amounting to only a fraction of the damages and consumer redress due. It will be interesting to see if this strategy, practiced by a large publicly traded corporation, will finally lead its Sarbanes-Oxley-bound officers into new legal terrain.
