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JDBs-Scam and Scum
12/7/08
When you buy a share for 100.00, then the market plummets and your share is worth half what you paid for it, what are your expectations when you put that share up to sell? You know you’re not going to get what you paid for it and your share will be sold for what’s current value is.
There is, what I consider a, a despicable scam being perpetuated and it is completely legal. I know because I’m currently trying to untangle the financial mess it’s created.
In August of 07, I had reached a financial point in my life where it was feasible to refinance my house and pay off all my debt. Every thing that was listed on my credit reports would be paid. There was an old Providian charge off not listed on my credit report and therefore the bank would not write a check for the balance unless they had something in writing from those that currently owned the debt.
In a phone conversation with the debt holders, I worked out a payoff amount with their promise I would have all necessary paperwork to present to the bank before closing. That paperwork, after several assurances, never came. I closed and paid off all my debt. Still wanting to pay off the remaining debt, I cut a deal that I would pay a thousand dollars up front and make monthly payments, which they accepted.
In January of 2008 I receive notice that a judgment had been entered against me and that the $1700.00 I had paid went to their legal fees. Talk about being pissed! I had thought here in Minnesota, I would have an opportunity to go before a Judge and show I was making good faith payments. That’s not how it works, and that’s sad. With that Judgment, they have since moved to garnish my paycheck and my bank accounts, and I’m setting here asking, How did it come to this? All I wanted to do was pay off my old debt in a responsible fashion.
Now, you’re probably thinking, hey, ‘You owe the debt and they have the right to be paid’. Under normal circumstances, yea, you’re right.
Let me explain the scam on their part. My understanding is that once Providian ‘charged off’ my account, they submitted their loss to their Insurance company. As far as Providian is concerned, they could have cared less after that.
Along comes a company that buys my account, along with thousands of others totaling millions and millions of dollars except they don’t pay millions and millions of dollars. They pay pennies on the dollar for each account. So to buy my account of $9,000.00 they maybe paid a thousand, but probably only a couple of hundred. This company then turns around and tells me, I have to pay the full nine grand.
These companies are known as Junk Debt Buyers and it’s a sweet deal for them as long as they can collect. That’s why they are extremely aggressive in their approach. Essentially, they make their money on people like me who have worked hard to repair their credit. They want the full amount, nothing less and they want it now! Why? Because they have to profit from all the debt they bought that they will never, ever be paid for.
What you can do to protect yourself.
First and foremost understand there are legitmate collection agencies out there. Know the difference between a Junk Debt Buyer and a legitmate agency and if you owe a debt, be responsible.
JDBs buy such huge amounts of debt, they often don’t have the necessary paperwork to validate the debt. This means when you ask them to prove they legally bought the debt, they can’t. What they hang their hat on is our ignorance of the law, especially the Fair Credit Reporting Act. Under the FCRA, you only have 30 days after initial contact to request debt validation and they must respond. After that, you can request, like I did, but they don’t have to respond (and they didn’t).
Other than that, you’re screwed! Now I have heard that there have been people who after paying off their debt to these scamscum artists, have hired a lawyer and sued to get their money back based on, 1: the companiy could not prove they owned the debt, or 2: they only had to pay the pennies on the dollar the company actually paid for the debt and since they bought bulk debt, they could not prove an actual amount paid.
The only other advice I can give is to have everything in writting and even better, hire a lwayer.
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