Related Question: How is it legal for a collection Company to sue for a debt they didn’t pay for?
Question by Solya: How is it legal for a collection Company to sue for a debt they didn’t pay for?
Third party collection agency pay as little at $ 80 for $ 5,000 debts. How can it be legal for them to collect on money they are not owed?
Term List December
Ok maybe my question is not very clear; let me try to explain it better. The Company who originally was owed money has given up on getting the money-it is written off. Along comes collection agency 1 they “buy” the debt for say $ 80. They fail to get the money so now collection agency 2 and then 3 “buys” it. Well the only money they have put out is $ 80. Why would they be entitled to the full say $ 5,000 (or however much) they did not loan out the money and they are not giving the money back to the original loaner. The original loaner has already written it off and sold it. That’s like saying you buy a sweater for $ 5, and prmsie to pay latter but you don’t. Now the person you bought the sweater from gives the bill to someone else for $ .25 writes it off as a loss. Now the person who spent $ .25 to get the bill wants $ 100 (interest, fees, ect) it only cost him $ .25 how could he be entitled to any more then $ .25?
Steven F you said “In short, the money IS owed. It is NONE of the debtors business how much the collection agency paid.” But it IS the debtors business-yes you owe the money, but not to them! they didnt lend it out-and are not giving back to the company! Also they tend to tack on all kinda off addittion fees-look it up it is very profitable business! It is also very shady-what I don’t understand is how it could be legal?
“They actually buy these debts for pennies on the dollar, so it is legal” Say hun? so you buy lets say a CD on sale for $ 9 it is worth $ 20. do you really think you will be able to get someone to pay you $ 60 for it? You are only due what you spent.
Best answer:
Answer by justanotherone
They are “providing a service” to get the debt collected. They spend money on phone calls and postage to get communication going towards paying the bill.
Add your own answer in the comments!
October 7th, 2010 at 10:27 am
It isn’t in a fair and free society and it was illegal until the government passes lobbyist written laws to allow companies to do it.
America has turned into the biggest free for all scam a thon on the planet. And your government is opening the door to companies who rape and pillage whom ever they can get their greedy hands on. I know I was employed by a company that operated legally with no other interest than bilking huge chunks of cash from Americans with little to no service provided and I am far from alone, Banks, credit cards, auto dealers, insurance companies, etc, have free reign over legally ripping you off.
Take a look at a 401k, there are 17 legal charges that are assessed against your 401k without notice to you anywhere in your statement. These charges when compounded will rob you of up to 1/2 of your retirement.
October 7th, 2010 at 11:26 am
They actually buy these debts for pennies on the dollar, so it is legal
October 7th, 2010 at 11:34 am
Because they pay for them. It doesn’t matter how much they paid for them.
If you owe on your property taxes, someone can buy your tax lien. If you don’t pay off your debt in a certain time frame, they can take your home.
Try educating yourself on finances before you get upset. Ignorance is not an excuse.
October 7th, 2010 at 11:51 am
If they paid $ 80, they DID pay for the debt. If YOU owed the original creditor $ 5,000, why should you get off easy because they did not think it was worth the effort to chase you themselves?
In short, the money IS owed. It is NONE of the debtors business how much the collection agency paid.
October 7th, 2010 at 12:09 pm
Debts and contractual obligations are bought and sold all the time. I am not sure what you are asking, but if you want to buy a mortgage they are available on the open market.