What you Need to Know About Debt Buying

Debt buying is a strong industry in America. Every day, there are companies that sell their debts to third-party agencies and banks that continue to pursue the amount owed. Many citizens have received phone calls from agencies they have never heard from requesting an amount of money that is just as foreign. Oftentimes, debt buyers will pursue the wrong individual or request an amount owed that has already been paid off. There are even particular instances when an individual receives debt collection calls for finances that may be in dispute. A key example of that is in the unfortunate instance of a consumer who has had their identity stolen.

What is Debt Buying?

Debt buying refers to when banks, creditors, phone companies, utilities, lenders, and credit card companies sell old debts that they have not been able to collect. The information is packaged into a portfolio which is sold to debt buyers for close to nothing. It is not rare for a debt buyer to spend 3-10 cents on the dollar for the amount owed per consumer. This allows creditors to collect at least a portion of the total amount owed while also enabling third-party agencies to continue to pursue financial recovery.

What is actually purchased by the debt buyer is a data stream or electronic file about the debts in the portfolio. A large majority of debt buyers do not purchase the account information, statements, or contracts that support the listed debt. It is due to this lack of knowledge that many debt buyers simply cast a large net in an effort to find an individual who owes money.

This is what leads to many Americans receiving calls about outstanding debt that in many cases is not theirs. Many people have been contacted by third-party collection agencies who will accuse them of owing money on a car they never bought, a phone company they never used, and a loan they never took out. Even if they do contact the right person, there is still a possibility that the debt has been settled with the original creditor.

What are My Rights?

Ignoring collection calls is not enough to get them to stop. Calls will persist and any debt you may have will remain in the debt buying cycle until some action is taken. Rather than endure these calls, we recommend that you exercise your rights under the Fair Debt Collection Practices Act (FDCPA).

You have the right to gain access to the documents that support the claims debt collectors make. If you know the debt you’re being asked about is not yours, reach out to the debt buyer within 30 days of receiving the call. You should send a letter requesting:

  • The name and address of the original creditor
  • The date the debt was incurred
  • A breakdown of your debt (how much is interest, fees, etc.)
  • Your payment history
  • A copy of the contract for the debt
  • A copy of any other written validation and explanation of the debt

It may take some time to draft this letter, but it can be vital in the court of law if the debt buyer attempts to sue you.

Don’t wait for that to happen before you seek the counsel from an experienced FDCPA attorney at the Law Offices of Jibrael S. Hindi. We have produced many successful outcomes for our clients receiving unwanted phone calls and have recovered millions for consumers like you. Call (844)-JIBRAEL to speak with our team of Florida FDCPA attorneys. We do not get a dime until you get paid!