Friday, March 30, 2012

Bank of America Sold Card Debts to Collectors Despite Faulty Records - American Banker Article

Bank of America Sold Card Debts to Collectors Despite Faulty Records - American Banker Article
 Bank of America has sold collections agencies rights to sue over credit card debts that it has privately noted were potentially inaccurate or already repaid.
The biggest domestic problem this country faces is not the federal budget deficit or overall government debt.  It is the crushing debt burden that has been imposed on the middle class and the poor.  And nobody is doing anything about it.  The Obama administration is desperately concerned about the health of the big banks, the Republicans are shamelessly flacking for the rich and powerful, and the Democrats are floundering around trying to decide whether they should be Republican Lite or make a teensy-weensy move back from the moderate right to what used to be the center. In the meantime, home mortgage debt (secured by homes that aren't worth a damn), consumer debt, medical bills, and student loans leave most of us struggling and one layoff away from filing Chapter 13. 

1 comment:

Anonymous said...
"Debt Collectors Ask to Be Paid a Little Respect"
June 13, 2011, p. A1
"Third-party debt collectors are typically hired by a store, cellphone company or a bank, to collect a debt that has become delinquent. Often, huge portfolios of
delinquent debt are sold to a debt buyer for pennies on the dollar; the debt buyer, in turn, may hire a collection agency, or a law firm specializing in debt collection."

One of the readers had comment that is so brilliant that it ought to be a law:

"Why can't the primary debt holder, instead of selling the debt to a collection agency, allow the debtor the chance to purchase his/her debt at the same price and terms the collection agency is bidding?"
-Hank. June 13, 2011. 9:40 AM. Comment # 37.

Why not indeed, if the original creditor is already willing to sell the debt for "pennies on the dollar" and write-off the losses?

And/or, just prohibit the selling of debt to third parties, and require the original lender to assume all the risks?