know your enemy and have fun(long)

Hi all,
I have been a long time lurker ond this is my first post.

I would like to de-mystify the 'old debt' CA questions I frequently see here. Note that I am specifically addressing the issue of CA's attempting to collect on debt past the SOL. Beware of '1st placement' CA's that still have the power of the courts on their side - what I post here won't apply.

I know that many people think that some over-zealous sleazy CA is 'digging up old bones' when first notified of an old debt say DOLA over 8 years. This is not the case. In fact, you can have fun with it.

First we should begin by understanding the paper market and how these 2nd or 3rd placement CA's end up with your name.

These 'bottom feeding agencies' buy the debt at pennies on the dollar. In most cases the paper broker will offer warranty that the files bought - (usually a disk consisting only of name, last known address SSN, amount owed and OC) and warrant that the files are scrubbed of dead people and discharged BK. In other words the CA can come back to the broker and demand an eqaul-value replacement account if one is discoverd.

Most debt brokers do NOT warrant that the files are scrubbed for SOL. So when one comes up, the CA basically got ripped off by the broker. The sooner they realize it, the better as not to incur further cost trying to collect it.

There are 3rd party 'file scrubbers' out there can further analyze a portfolio before purchase, but the sleazier CA's won't pay for the service. Often you will find that the collection arm of subprime lenders (specifically Providian and Capital One) will purchase old debt portfolios scrubbed to include people with past credit problems with current good payment history in the attempt to place the debt pre-charged on a credit card issued by them.

Knowing this and knowing that the collection industry's 'nirvana' is -one call resolution. It's time to have fun.

For example, when you get that notice or call on from Sleaze CA for an 8 year old debt - they bought an unscrubbed file and the monkey on the other end of the phone only knows that you came up on the predictive dialer. Ask plenty of questions, sound like you will cooperate - BE SURE TO SEND THE CERTIFIED DISPUTE LETTER THOUGH FOR possible lawsuit, but keep in mind it is in the CA's interest to know you are disputing an unenforceable debt. CA's run on the typical call center efficiency models where they try to get results with the minimum amount of phone or rep time. Exploit this- that is why many times you never hear back - you did them a favor by pointing out they got ripped and now they will move on to someone else

Last year I rec'd a notice for a VISA account charged off in 1995. I sent the dispute letter, but followed up EVERY DAY - with a phone call to the 800 number. I asked if the letter was rec'd yet, Every time, I would say I don't have the notice and made the person look up the account the long way. I would ask for alternate addresses, etc. I never got rude or argumentative - I would ask stupid questions ask the rep waht the weather was like there, etc. I HAD FUN. I would also send faxes, emails, and letterd on a daily basis to follow up - knowing i had my CRR letter out, but knowing each one would have to be read and processed on their end

I never told them about the SOL until the very end. It was so much fun to know that they paid $10 for a $1500 visa charge -off and probably spent more in time and effort - just to 'break the bad news at the end' when I threatened to sue.

One final note on 'old debt' - most OC's DO have the necessary documentation in archiuve for a validation - the problem is that they charge anywhere between $10 and $25 per document for retrieval. What CA is going to pay $50 to prove your dispute that cost them $10 to purchase?

 

A letter stating that - 'the records could not be retrieived' due to the age and they were deleting my name from their records and the CRA

 

Re: know your enemy and have fun(lo

You too can bone up on the enemy, just as I see the accusations of 'plants' on this board, the industry has their own sites to 'plant' - here are some of my favorites:

http://www.watchtheweb.com/

http://www.debtbuyers.com/whoswho.php3

http://www.collectionsworld.com/

http://www.debtmarketplace.com/buyers-matrix.html

http://www.cfsi.net/Menu/for_sale.htm

http://www.chargeoffclearinghouse.com/

Knowledge is power!

I really like the last 2 sites - cfsi actaully quotes prices on portfolios and chargeoffclearinghouse has a great FAQ section:

Seventeen Frequently Asked Questions

Question: So many people are selling accounts now, what distinguishes the Charge-Off Clearinghouse from everyone else?

Answer: Glad you asked. Check us out. We are not a collection agency!


Question: I have never purchased charge-offs before, will you help me?

Answer: Yes we will. Many of our now regular customers were first time purchasers who we walked through the process their first time.


Question: How will you help me? I donâ??t even know the questions to ask?

Answer: No problem, we will share with you important questions to ask, and then we will answer them the best we can. You will find that the questions we provide you will serve as a good guide to walk you through a purchase with us or with anyone else. Of course, we hope we have something that you might be interested in purchasing.


Question: I am only licensed to practice in one state. Can you sell me just that state?

Answer: You bet.


Question: How will I know what I am buying?

Answer: You will see detailed account information when you register for OnLine Portfolio Review. Specifically, you will see account balance, last pay date, charge-off date, and the debtor's last known city, state and zip code. If you would rather have us fax you a report that shows all of the above, we would be happy to do so.


Question: What about social security numbers and telephone numbers?

Answer: The sanitized portfolio that we provide you has a "yes"or a "no" in the social security field and in the home telephone field. "Yes" means we have a number in that field and "no" means that we do not.


Question: So a "yes" means that it is a valid social security number or home telephone number?

Answer: No, it doesnâ??t. All it means is that the creditor has a number in that field. It could be a worthless number, like a string of sevens.


Question: Well if that "yes" or "no" doesnâ??t mean anything, what good is it?

Answer: Actually it is quite helpful. Especially when viewed within the context of the purchase agreement. For example, many of our purchase agreements specify that accounts sold will have 100% social security numbers. Be sure and ask what, if any, representations are made with regard to the quality of social security numbers.


Question: I am interested in buying paper on a regular basis from someone that I feel comfortable working with. Do you set up any "forward flow" arrangements with your customers?

Answer: We will be happy to work with you to arrange for a steady supply of charge-offs. As a matter of course, we make every effort to contact our customers to give them the "first shot" at a package before we advertise. We also encourage interested purchasers to feel free to contact usâ??we are always glad to hear from you. Regular contact also gives us the opportunity to tell you what packages you can expect to see for sale.


Question: How soon after I wire you funds, do I get my accounts?

Answer: We will email you the accounts as soon as our bank confirms that your funds have arrived.


Question: What do I get when I buy credit card accounts?

Answer: Everything that we get! And it varies. You will always get the information electronically, meaning on diskettes or by e-mail. If you need a hard-copy, we will be glad to print one out for you. If, when we buy the package, we get account agreements, billing statements, invoices, etc., we will forward them to you when we send you the account diskettes. Frequently we have to request "media" from the original creditor. Usually they charge us for that media. We pass along those costs to you directlyâ??we donâ??t make money on media requests. We have seen media charges ranging from $5.00 per document to $10.00 per account. Every creditor is different. This will be spelled out in the purchase agreement.


Question: What if I buy an account and the debtor is deceased or bankrupt?

Answer: All of our accounts have been cleansed of deceased and bankruptcies, but the process is imperfect. That means that you can expect to find some, but not nearly as many as we already removed. All of our purchase agreements provide for a "representation and warranty" period. That is, you have a specified time period to return any accounts wherein the debtor is deceased or bankrupt. In addition, during that warranty period you can also return accounts that were entered into fraudulently, and of course, accounts that were previously settled.


Question: What do I get when I return accounts during the warranty period?

Answer: A replacement of equal or greater valueâ??see the purchase agreement for details.


Question: When do I get to see the purchase agreementâ??If I donâ??t like it, I need to know before I commit to buying.

Answer: Anytime. We suggest that you request the document (before it is filled in with your information) if you are seriously considering purchasing. We will be happy to fax it to you. The purchase agreement is also on our web site.


Question: What kind of a return can I expect to make?

Answer: Who knows? Let your own experience be your guide. If someone tells you what you what kind of dollars you can expect to make on any given package, or even in general, we suggest you "turn tail and run". Your experience will depend on the quality of your operation, as well as the quality of the accounts. As one friend said, "if you buy these accounts and then go sit on sailboat, you probably wonâ??t do very well".



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